Negotiations with a collector
Date: Mon, 02/05/2007 - 06:02
I could really use some advice for dealing with a collection agency. Basically, in December, they intimidated me into a full payment via 2 bank withdrawals. After some reading and on the advice of good people here, I was able to cancel those withdrawals.
In order to do so, I have started dealing with someone in the Complaints/Compliance Dept of the Collector, rather than a typical collection agent. In some ways, this is a relief, since our interaction is not adversarial, it's actually quite civil, and there's some mutual trust (she cancelled the withdrawals and I have kept my word about returning calls, etc.).
SO, here's where we're at: last week, she ran my proposal of 50% of the debt to someone in Collections, and that person said OK, but has to be in 30 days - firm.
That's a good deal, but its not possible for me.
What's my next move?? Remember, she has no authority to negotiate, only to run proposals over to Collections. Should I:
1.) Keep fighting for 50%, over a span of 60-90 days, or is this going backwards?
2.) Counter-Offer 2/3 of the debt in 90-120 days??
3.) Buy time with a validation letter (even though I acknowledge the debt and the amount?) I don't really want to jeopardize what has been a fairly good working relationship with this contact and then start over with a rabid collector.
That's a little long, but maybe the specifics are useful. Thanks so much for any help and guidance you'r able to provide.
In order to buy yourself the additional time you need, send a de
In order to buy yourself the additional time you need, send a debt validation letter. The process should give you at minimum 30 days, and more realistically, closer to 40 days to stockpile cash.
Sending in a validation letter will not extend your settlement t
Sending in a validation letter will not extend your settlement time period.
Collections agencies clients, have rules and regulations they must abide by in order for them to continue to earn their business.
Why would you negotiate a 50% settlment if it isn't somehting you could do?
50% of the debt is the number I offered, without specifying any
50% of the debt is the number I offered, without specifying any time period. They said 30 days - firm. That's not possible. I'd need at least 60 days, probably 90 to make it work, but could do it in chunks.
I'm not entirely sure what you mean by "not extending the settelement time period." I presume that you mean the overall window for settlement.
I'm thinking that dv letter might conceivably buy time to get money together - which is useful (Things have just taken a financial turn for the better, and 60-90 days will make a big difference). But that's assuming that we'll start at negotiation ground zero after the validation. I don't know that 50% will ever be on the table again. So, it seems like a lot of trouble to go through just to start at the same place of ~60% of the debt, over 60-90 days.
Yes, they "might" not be able to validate.
But that's balanced by the likelihood of having to again deal with rabid collection agents (who are also more skilled negotiators), as opposed to the contact I've got now.
I don't know what recommendations you will get from others, but
I don't know what recommendations you will get from others, but I would say this...
Figure out how much of the 50% you CAN send in the next 30 days. Put that in a letter to the creditor, and explain your timeline for paying the rest of the 50%.
And no more phone stuff! Seriously, get everything in writing. I say send your letter like this (certified return receipt).
For example;
Dear Creditor,
This letter is to confirm your acceptance of my offer of $1000 for my account X. This was confirmed in a phone conversation with Ms. ABC on DATE.
My repayment schedule will be as follows:
2/20/07 $500
3/10/07 $250
3/30/07 $250
I will be mailing these payments via certified check to the following address: XX.
After my payment on 3/30/07 this account will be considered mutually settled, and my obligation for this debt will be complete.
Additionally, I am formally requesting future communication regarding this matter be via USPS mail to my address X.
Another thing to consider when being offered a settlement is whe
Another thing to consider when being offered a settlement is whether the remaining balance is charged off. If, for example, your debt is $1000.00 and you settle for $500.00, will the CA charge off the remaining $500.00? If that's the case, you'd be better off paying whatever amount you can over a period of time that would satisfy the whole debt. In a settlement situation, keep in mind that if the balance is shown as a charge off on your credit report, it will adversely effect your credit score.
If the CA is willing to accept a settlement where the account is shown as "paid in full" and reflected as such on your credit report, then I personally would be willing to do that.
What to do
Get the agreement in writing before you send any payment full or partial. Don't send a partial payment of the 50% unless you first have a written agreement as to the full amount to be paid and when it should be paid. Sending any amount without a written agreement of settlement is a good way to lose your money.
Negotiate the terms of settlement that work for you. If they will not accept the terms that you can afford, then walk away. In many cases they will accept the same offer a month or two down the road. They will want their money just as bad then as they do now. Remember, many collectors get a commission only. So they want you to pay now so their paycheck will be bigger.
Whatever you do, do not agree to terms you cannot meet.
Thank you all for the very good suggestions and advice. Very he
Thank you all for the very good suggestions and advice. Very helpful.