Bargaining with a collections agency?

[Halfasianmomma]

Mamas,

I need some advice regarding an old unpaid debt that has gone to collections. I pulled my credit report recently and found a few items that needed correcting. Among them was a legitimate debt for a cell phone XH used but that was in my name (stupid, I know). The debt was originally for $1,700.00, but it is marked down as being $1,950.00.

I am in a position to pay it off completely but I wanted to know if anyone has ever tried to negotiate with a collection agency for a lower lump sum. I know for a fact that collection agencies buy debts for pennies to the dollar, so even if I paid them 25% of the original amount, they'd make a profit.

Also, I'm wondering if I should do this "bargaining" in writing, as in write a "pay for delete" letter...

Any input would be appreciated!

[Porcelain Interior]

How old is the debt?

[SunshineJ]

Ditto how old is it? If it's getting close to the drop off age I probably wouldn't even bother to be honest, but if it's something you need to clear up then the age of the debt will help determine how much they'll take for it.

[Halfasianmomma]

The original debt dates back to 2007, which is when I stopped being able to pay. It was sent to a first collection agency, whom I remember speaking to, but at the time, I was unable to make payments so they left me alone. That mention is marked "Account closed". It was then bought out by another collection agency in 2008 and is still unpaid as of today.

[Porcelain Interior]

In that case you've got years left until it drops off. I'd call and make a settlement offer.

[savannah smiles]

Totally bargain w/ them. Back when my 8 year old was a baby, we moved and had to cancel cable service. THe cable company insisted my dh pay an early cancellation fee and he refused. When they said they'd send it to collections, he told them to go ahead because he would pay the collection company but not them. Sure enough, a few weeks later the collection company called and he offered to pay 50%, they accepted, and that was that.
At this point, they really just want something for their efforts so it's ok to play hardball.

[Halfasianmomma]

So, if the initial debt was something near to $1,200, which ballooned to $1,732 with interest (and later to $1,950 with the collection agency's interest), would a proposal of 700-800$ be reasonable? I heard somewhere that the original creditor would have to be consulted for such a "low" offer...

[frugalmama]

does this work with student loans sent to collections too?

I have an alternative {private not federal} student loan that citibank sold when I was unable to pay, to the tune of $17k, that while I would love to pay it off just isn't happening.

[TanyaS]

You might find some good info on creditboards.com. Collections are only on the credit report for 4 years. There are only two years left, so they should be willing to negotiate with you. When you contact them, you need to get EVERYTHING in writing. Tell them you would like to settle your debt for the amount you want to pay. Make sure the deal includes the collection on your credit report being marked paid in full and GET IT IN WRITING!!!!

[nataliachick7]

Originally Posted by TanyaS

You might find some good info on creditboards.com. Collections are only on the credit report for 4 years. There are only two years left, so they should be willing to negotiate with you. When you contact them, you need to get EVERYTHING in writing. Tell them you would like to settle your debt for the amount you want to pay. Make sure the deal includes the collection on your credit report being marked paid in full and GET IT IN WRITING!!!!

If she is paying a lesser amount than what she owes (making a deal for less) then they wont put paid in full on her credit report. They will put something along the lines of debt was cleared, but for a lesser amount.

[MissinNYC]

Yeah, I always hear people say you should get collections agents to say "paid in full" but when I negotiated with them a while ago, they all said that didn't happen unless you actually pay in full.They say something like "settled" or something.

[HollyBaby]

You have nothing to lose by making an offer. BUT! Before you send the payment, demand a letter in writing to the agreement.

[Peepsqueak]

Absolutely get it in writing. Also make sure they clear the debt on your credit report. These companies sell debts to other companies and sometimes they will reopen the account again and try to get the money again.

Also, make sure you really can make the commitment to finally pay it. Becuase then the statue of limitations starts all over again for the debt and they can add on more and your report will not be cleared.