How to settle with a debt collector |
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Jensen says Omnium doesn't sue most of the debtors
it deals with.
"The legal process takes time. Most of the accounts we get, we don't have the period of time to sue," she says. "We do occasionally file suit when somebody has the ability to pay, but refuses to pay."
She says the agency can determine the person's ability
to pay by seeing if he or she is employed. Or, the agency may review the person's
financial situation by looking at the person's credit report. Jamison
offers this reminder: Don't verbally agree with the collector on the phone or
send in a payment even for a dollar, because the statute of limitations will start
all over again.
True
or false:
Credit card charge-offs can't be deleted
from your credit report.
False. It's possible, but that doesn't mean it
will happen.
Jamison says
it's unlikely to be deleted if you are dealing with a big bank, which probably
won't give you a deletion letter. "Reason being, the
companies are too big and they have too much red tape that you have to circumvent
to be able to get somebody that can make a judgment call to give you a deletion
with payment."
Baird disagrees. "If the creditor has a reason
to delete a reported debt, then they are going to delete,"
she says. "Saying that creditors are not deleting because it
is not efficient is not accurate."
True
or false:
If you have a debt in collections over
$2,000, you won't be sued.
False. Jamison warns that when collections get over $2,000,
the collection agency is more likely to sue before the statute of
limitation expires because there's more money at stake.
Baird
agrees.
"Most creditors look at the dollar amount to
determine whether they will sue," she says. "They look
at whether the person is working or not, whether they own a home
or not, the cost of commencing a lawsuit and state-specific avenues
for collection-related lawsuits and collection."
Jamison
hypothetically uses the $2,000 amount because the extra money needed to pay the
debt in full may not benefit the consumer as much in return. "If
the person can afford to, I suggest paying in full in return for a deletion for
accounts that are $5,000," he says. If the account is
for a credit card, Jamison says the settlement will depend on how much the person
intends on using the card in the future. If the consumer uses it a lot, he advises
the consumer to be willing to pay a higher amount to delete. That's if the deletion
can be negotiated.
When it comes to collections less than $2,000, Jamison
suggests that getting a deletion is better than getting a deal.
Calling the collection agency to settle for 50 cents on the dollar
won't work, he says, because the agency won't agree to a deletion
with payment. Instead, he advises paying the full balance in return
for a deletion letter, especially if the consumer is concerned about
his or her credit report and credit score.
Baird warns that if you do pay in full for an account
that may have been charged-off, the creditor is under no obligation
to delete the account. However, the creditor must report that it
is "paid in full."
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