What's so bad about letting it go to collections?

Speaking personally, it's about stress for me. Getting collection calls at home, at my husbands place of employment, to my family members. Having a debt collector yell at you and call you a dead beat.

I've had so many collectors violate FDCPA it isn't even funny. If I could keep all my accounts with the OC and not have the stress of dealing with a collector I would.

As for being sued.... There is a reason that my debts are in collection, I can't afford to pay what they want. If I can't afford that, I sure can't afford someone garnishing my husbands wages or taking the vehicle I'm going to need to make sure I can get my baby (due in Dec.) to doctor's appointments.

because for alot of things you need credit.your point about the default judgement is the dumbest thing i've seen today.while in some cases it's good if a debt goes to collections or is sold.then getting a settlement is easier.if a creditor gets a default judgement they can garnish you.how's that going to effect things?yes unless you don't plan on buying a car,traveling,or buying a house in the future.then you don't need credit,but most of us want to do those things down the road.sowhile you don't get it.i don't get your post.

Well I can give you an ethical answer and a reality answer.

The ethical thing to do would be to pay the debts and avoid the hassle of creditors, collection agencies, attornys, etc.. That choice is soley up to the individual, hence your question about "What's so bad."

The reality of it is many people who are knee deep in debt cannot pay their debts. If you feel you are drowning in debt and overall it would be better just let it play out because you are unable to pay then that is your choice. Some people feel they have a better chance of appearing in court and pleading their case versus paying and get it over with. IMO, it is up to what you can AFFORD to do at the present moment.

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of course of cool,but getting default judgements,or leins.is not what most people want.the OP made it sound like it was no big deal.garnisments,and leins are a big deal,and difficult to negotiate once they are in place.

That is so true Paul. I am confused in what the OP posted. They just came across very nonchalant about the whole thing to me, I dont know..LOL!

well i get what they where trying to say,but i don't agree with it at all.

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As for my point -- I didn't have a point. I'm in an involuntary situation where I can't keep my promises to my creditors. I'm scared and trying to understand the process to an honorable way out someday. I was asking a question. It was twofold:

IF you are in a situation where you can't pay your unsecured debt, and you are not playing a game, or a strategery, or lying about your situation, what is the reason for drastic measure to avoid the debt being transferred to a collection agency? What changes for the worse when that happens? From my research in this (formerly) helpful forum, I understand there are three things that change:

1) Unlike the original creditor, you can tell the CA to not contact you anymore. I understand this may expedite court proceedings which I will address later. But if you want the letters and phone calls to stop, you really can now. With that said, none of my creditors with which I am delinquent calls me right now. None. Every month I send each one a letter updating them on my situation and thanking them for only responding in writing. I'm not saying it changes the end game, whatever that will be, but my phone does not ring. At. All. I'm 90-120 days late at this point.

2) Once the debt is sold to a CA, you now have to negotiate with the CA who has much, much less skin in the game (I've heard ten cents on the dollar but I don't really know). So anything over 10% is profit to them which sounds like primo negotiation territory to me. But I have never been in this situation before which is why I am asking the question.

3) The account now gets posted twice to your credit report, which is already trashed. My wife, a former banker, who could be wrong, says "settled for less" with the OC is nearly as bad as it being assigned to a CA and listed as "settled for less."

Finally, with regard to anybody taking you to court and getting a judgement, what changes at this point unless you were disputing the debt? I thank DebtCruncher for being helpful and giving me the information I requested. It makes perfect sense and I appreciate your time in generating a helpful response.

I agree with the OP to a degree. Sometimes your situation dictates your actions. In my case I had to try DIY debt settlement because I could not afford the monthly payments to a DS company. I have not settled any accounts at this time and most of them have just passed 180 days. I hope to settle in the future, but it is not looking good at this time.

I noticed there are a lot of people on this site that have thousands of dollars to settle with right away and that is good for them. I stopped paying my credit card bills because I had no choice.

Now when the collection agency calls saying they will take me to court if I don't pay, I say you have to do what you have to do. I still don't have the money. I don't want a judgement or a lien and I will fight back anyway I can, screw the ethics, I am talking about feeding my family. I am real sure Chase bank or Citibank is not going to lose a house or car over this debt.

For all the people that have the money to settle with on the same day you stop paying, you are clearly not playing the same game as I am so don't think you are.

i know where you are coming from.. i stopped paying credit cards because i did not have money so of course i did not have money to settle.
but we advocate being upfront with the original creditor. if i was honest before i stopped paying they could have worked something out for before the late fees gotten out of control.
the creditor tends to play more fair than a lot of collectors so it is often easier and less stressful if you can work out something directly with them.

I posted this in another thread and never got an an answer. Ill try again. I moved out of an apartment early. The collecter called me and said I owe $3000 and I set up a payment plan of a $150 a month and that I might be able to skip a car payment in Oct. The collections manger called me and wanted more money and for me to skip the car payment and pay him. I couldnt skip the payment so I offered him $200 a month and a lump sum of $600 within 3 months(My xmas bouns) I sent him a certifed letter telling him this and to stop calling my work phone unless it was to accept these terms. I told him he could contact me thru my email. He called any way. He said he wanted my banking info to take the money out every month. I told him no. He said that would be the only way he would do it. He said that I was refusing to pay and he is turning it over to his legal Dept. I told him I wanted to keep paying him.I was told by the Christian Debt Consolidation place not to give him the banking info to take money.They said let him take me to court and the judge would see that I have been paying. Not sure what to do or where to go. How long itwill take to go to court? Will I be offered a new plan by the judge or how much can they take. Please help

Try bumping your original thread. It's rude to hijack someone elses thread.

I am new to all this, so i am just trying everything. Sorry if I'm bother ing someone. I'm not doing this to pass the time.:D I have no idea about bumping someone's thread.

I appreciate the original poster's question. I think many of us are in the same boat. I stopped paying cc because I did not have the money to pay and still don't - all due to unemployment and a failed business.

I'd love to settle, but there is no extra money and I don;t see there being nearly enough anytime soon. I'd planned to do a bankruptcy but honestly can't even afford that. So, all but 3 accts went to charge off and collections. I just tried to settle with Neiman Marcus before it was charged off - my lowest balance at $1200 - and it was a nightmare - they were very nice and then told me they accepted my offer but would give me nothing in writing and would not take a money order - only a bank acct #. Horrible to deal with so now that will be charged off.

So, no point in doing a bankruptcy at this point. I live in TX so no wage garnishment (self-employed anyway for now), can't take my home, and I have nothing else in my name. Worst thing is if I seek employment, I'm sure I'd be turned down. They are trying to pass legislation to prevent companies from using credit reports in hiring decision. Let's hope that passes. Too many of us "good people" with formerly perfect credit got caught in this economy.

So, with everything in collections where do I stand? I may be sued. I am "judgement proof" given the above. I have nothing. Yes, once the collection agencies are in it, it becomes much easier to to hold their feet to the fire in following the law, and if you look at other credit sites, many will tell you that they will mess up and that you should start documenting violations and use them in court. Many successes doing this and we should be doing this when possible or they will just keep breaking the law.

Do I want to return to the stellar credit I had? Of course. I have one acct that's open that I continue to pay on and will add myself to my husband's accts soon. I am lucky in that we have a home and won't need another car for 6-7 years. Also, my husband's credit is okay and we are trying to keep it that way.

Advice: look at all the boards out there. Some have some hard core people who will cite case law etc. If you decide to take this route, a I have, you'll want to bone up on anything and everything possible.

Good luck.