Generally, is it better to deal with the creditor or the ca?

It depends on who owns the debt at this point. If the original creditor still owns it you may be able to work out a deal with them but it will show up on your credit report if the payments are past due. In my case I settled an account for about $156 less and payed it off, they sent a letter to me stating this and also put on my credit report payed in settlement for less than balance.

Under federal law, accounts are charged off at 180 days, some time after that, it is sold to a collection agency and usually the original creditor is out of the picture. The collection agency pays very little for that debt, maby around .15 cents on the dollar and will tack on interest and bully you into paying. if they are not successful they will either sue you or sell it again for .05-.08 cents on the dollar and that is when a Junk debt buyer gets it. It is then that they usually sue and violate the fdcpa and FCRA not to mention if your state has debt collection laws.

What state do you live in?

Are any accounts owned by a collection agency?

This matters as the Statute of limitations could have gone past. If a debt is time barred you cannot get a judgment against you and if they take you to court you can get it dismissed based on that but you have to tell them or the court.

If a debt collector violates the FDCPA or FCRA you can sue them in court.

Hi guest,

thanks for your response. i am just starting this month not paying "officially", we have not been consistent paying on a regular basis, but are current until the end of the month. so I calculate I am not going to contact the original creditor until 120 days past + (late september, october). However, if I can get a less stressful and maybe better dealer w/ the original creditor, I want to make sure I try to settle before the 180 day mark right?

I live in CA, because I am just starting the program, I haven't had to deal w/ any collection agencies, right now I am just starting to save money instead of pay off debt. and try to get as much information as possible so I am prepared when I get calls, have to make offers, etc.

Have you tried working with your creditors up front? What's the absolute worst thing they can tell you? No sense trashing your CR with a slew of lates if you can avoid it.

Hi unclewulf. that is a good idea. from what I've heard though they won't really deal with you until you are late. I have called them in the past to take off late fees and got absolutely nothing. My CR is already pretty bad unfortunately. honestly, i like the idea of seeing an end to my debt instead of just seeing a fture of paying off minimum payments and barely touching the balance. i feel that is the wrong answer, but this method actually offers some hope to a really trapping situation for me.

Sometimes it is better to deal with the original creditor, they may be willing to work with you, but from what I hear and my own experience they usually don't want to hear about it. If you know that you can catch up your payments, or pay it off before the 180 mark, it might be better for you to do so and just have a few lates on your credit report rather then having a charge off THEN a collection account as well. Once you pay on time for a while you might be able to do a goodwill letter to the creditor and get those lates removed.

If you know that there is no way you can catch up, then you honestly don't have much choice but to deal with the CAs. Sometimes this is better in the long run, depending on your financial situation. CAs have to comply with laws, which makes it a bit easier on you. I have noticed a strange trend, when the OC sends an account to the CA and you DV the CA, many times the CA will close the account and send it back to the OC. Strange, but they do it, alot. I had one send me FULL validation, but in the same letter they stated the account will be closed and sent back to the OC...I thought that was very strange.

Once it gets to a debt buyer you actually have some more leverage if you know your rights and the law. Many junk debt buyers don't have the proper documentation, especially if an account is pretty old. It is actually pretty easy to get a CA account off your credit report if you are willing to be persistent and see it all the way to court (not to mention you may get some money out of it). Plus, once a OC sells off the debt, they don't care about it and you generally will get it removed from your reports eventually because they won't bother to take the time to verify the account.

I have also noticed that many CAs will be willing to work with you and accept a payment arrangement (the reputable ones at least). You just always want to get any agreements in writing! It is also easier to get a pay for delete from a CA. Then once you pay off the account, you can try a goodwill letter to the OC to remove it since it got paid...or just bug them constantly with disputes through the CRAs until they just don't respond and it gets wiped.

Make sure you find out who owns the debt. Request an account history; dispute anything that you might feel is remiss. ex. interest, late fees, finance charges.

Some can be over the top. Also, make certain, the CA isn't adding fees,interest on interest etc. Be very persistent.

Make sure you find out who owns the debt. Request an account history; dispute anything that you might feel is remiss. ex. interest, late fees, finance charges.

Some can be over the top. Also, make certain, the CA isn't adding fees,interest on interest etc. Be very persistent.