It’s important to understand from the very beginning that
once an original creditor assigns or sells your bad debt to
a collection agency, that you can no longer negotiate with
the original creditor, and that any deal than can be made
must now be made with the collection agency.
Visit: http://free-from-debts.org
Secondly, and before going any further, we need to
understand what is meant by the term, Collection Agency,
and it is in essence one of these three things:
1) A company that has been assigned a debt, for collection.
2) A company that has purchased a debt, for collection.
3) A lawyer who has been hired to collect a debt.
And the third most important think to be clear about, is
which kind of debts can you settle and they are things like:
a) medical bills,
b) credit cards,
c) personal loans,
d) department store cards,
e) student loans,
f) bounced checks.
The debt first needs to be validated, which means making
sure that the person or company requesting payment has been
authorized to collect the debt, and is in fact who they say
they are, and if you do a quick search for Debt Validation,
you’ll find many good articles on the subject.
Don’t Be Confused.
This law applies to credit agencies though, and should not be confused with the statute of limitations on debts, so be
sure to check the laws for your state very carefully.
Some Important Dos And Don’ts
1) Try to handle all correspondence by mail so there’s a
paper trail, and use registered mail, receipt requested,
and make sure you keep a copy.
2) If you do have to speak on the phone, then make a note
of the date and time, the person that you spoke to, and
what was discussed.
3) Always believe that the agency will accept less than
they say they will.
4) Stay calm and remind yourself that the collection agency
wants to strike a deal and that time is on your side, and
never forget that the more time that passes, the less
you’ll have to pay.
5) Never ever say that you need to settle the debt.
6) Never agree to their first or even second offer.
7) If they really press hard, then threaten them with
bankruptcy, and if they believe you, then they’ll always
settle quickly, and for less.
A debt collection agency does have the right to take you
to court, but it’s a long process which costs money and
doesn’t guarantee results, so it’s the last thing that the
agency will want to do, so keep your cool.
So How Much Should You Offer?
To keep the arithmetic relatively simple, let’s look at a
debt of ,000 and note that if it’s a recent one that the
agency most likely paid around 0 (6 percent) for it, and
for an older one then maybe as little as (1 percent),
so I’d recommend offering them 20% of the original amount
for starters which comes to 0 for a fairly recent debt,
and 0 for an old debt and although you’ll most likely
have to up the figure by around 5%, you’ll be very much in
the ball park.
Be Very Wary Of Penalties And Padding.
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