
try2help
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If the debt it is sold to a collection agency, the collection agency owns the debt......period. That is ok, they will be open to settlements. Even if they take judgement, they will settle that too.
Most important thing. Make sure the state you are in - what are the garnishee laws, if any, Pa., Tx. for instance prohibit garnishees. Also statute of limitations, how long w/o a payment does a debt become not enforceable by law, good to know if you have disappeared off the radar screen for a long time, the creditors don't know where you work, live, or maintain any bank accounts. If Statute of lims is 5 years, and you have not paid, in 4 yrs and 6 months, if you don't make a payment in the next 6 months--statute of lims has expired you can never again be sued for the debt. Be careful, agencies will try to trick you - give you a good deal, hey buddy ok, no more interest, pay it off at 40 bucks a month. Bingo send in that 40 bucks, and you have started the whole 6 year statute of lims over again.
Many people who live in states w/low years, 3, or 4, might be better off, disappearing off the map, for a few years, at least they will not be able to be sued for debt. It can however stay on your cr bur report for 7 years.
Collection agencies are cool though, they will make a settlement at 35-50% of what you owe, as pmt in full-get it in writing first, that it is acceptable as payment in full- then remit-then get letter that the acct has been settled. Ask them if they will be contacting credit bureau, and reporting it, even if they own the debt, they are notorius for not reporting it. Else you will have to take the letter and remit it to the three major cr bureaus yourself. If they own the debt it is their responsibility, but they are so busy collecting, think they care about you, even if you made a successful settlement. Good side of settling w/collection agencies, they are also bad on another of their responsibilities regarding settlements. Reporting them to the I.R.S. settlements are taxable usually at around 15%, so if you settle and have to report it yourself to cr. bureaus and they don't send 1099, oh well.
Now wanna increase credit score w/settlement. The settlement is ok for your cr. score, will show 0 bal and you did work something out, but will show was delinquent at one time, only moderately helping your credit score. Offer (if you can afford it) to settle high, like at 75%-in exchange for a complete deletion. Remember they purchased debt cheap will be making money, lots of it even on settlement. Again get it in writing, settle remit, make sure they keep their word, and bingo, no record in 3 months that you ever had a delinquent account. You might need assistance of a counselor if you don't understand the concept, try nfcc.org national foundation for credit counseling. E books, www.answersfordebt.com but there are others credit repair companies usually provide a self repair book you can buy separately, w/o their service, or purchase limited service till you understand the concepts, and buy their book usually has forms for deletions, pretty heavy.
Avoid debt settlement companies aka debt consolidation companies asking for upfront companies. They are controversial and many states are beginning to outlaw them completely. Technicly debt consolidation refers to a loan, paying off all your debts, cool if you can get it, usually need collateral. And if you use your home as collateratal now you have turned unsecured debt (no collateral) to collatrelized debt (a 2nd mortgage) and there is a tendency to get right back in debt.
Never, never let the collection agencies know where you are working, what you own, best to utilize fdcpa law, says if you write them a letter contact me by mail only no phone calls, they have to comply, warn family members, and neighbors, yes they are allowed to call neighbors for location , or asset info if they comply w/law, to not talk to them. Else w/assistance or coming into some $ - make settlements, agencies like settlements, one pmt, maybe two and goodbye. If the settlement is in two pmts make sure specified as such in letter verifying that a certain amount is acceptable as pmt in full in two pmts- else boom- no settlement and started the statute of lims again. Education is the key and knowing the law the main thing, and don't let those settlement companies enroll you into programs that will bury you........better to stay under the radar than those programs though the nfcc will reccomend only a few of them. But why pay all those fees to do what you can do yourself.
good luck, not the end of the world. |