Should I pay the settlement offer from the collection agency?
I received a settlement offer from a collection agency regarding a 4year old cable bill. They are asking me to pay 70% of my balance. While it seems like a good offer I worry about the damage it will do to my credit. I also worry about the agency itself, Convergent Outsourcing Inc(they have a lot of negative reviews with the bbb and other websites). What are the steps I should take? I don't dispute the debt. I really can't afford the offer they are making Should I just ignore them and wait for the debt to fall off in 3yrs?
Can a debt collector cancel a payment arrangement (settlement)?
If we’re speaking of a debt collector int he United States, no. Any agreement that you reach with a debt collecting agency is done on behalf of the company/bank/agency/credit union to whom you owe the debt. As such, they are allowed to strike repayment agreements with you, and pass along your settlement offers to the company to whom you owe the money. But they are not allowed to reach a settlement agreement, nor to cancel it.If you have had a debt collector renege on a previous agreement without due cause, please file a complaint against the agency and debt collector by name with the Federal Trade Commission and your state’s general attorney’s office.The matter is different, however, if you have broken the terms of the settlement agreement. If you stop payment, or pay less. In that case you are the one who broke the agreement and the collector is entitled to start from scratch and ask you for the full amount owed.
How do I negotiate a lower settlement with a collection agency?
Paying back a defaulted/charged-off credit card will not restore your credit rating..Your credit report will be updated to a "Paid Charge-Off," which, while slightly better, is still a seriously derogatory item. Per the Fair Credit Reporting Act, a charge-off, whether paid, settled for less or not paid at all, will remain on a consumer's credit reports for up to 7 years....so you'll be stuck with damaged credit regardless of what you do. If you're going to pay off old charged-off debt anyway, then you might as well negotiate the lowest, rock bottom settlement you can possibly get, being that the negative charge-off notation is going to stay for 7 years on your credit report, regardless of whether the charge-off is paid or unpaid. ... Offer to settle for $2,000...Never make the mistake of paying a debt collector without first getting a signed settlement agreement on their letterhead stating that the account will be paid in full upon receipt of the agreed-to amount. If you don’t, the debt collectors will come back demanding more money.
Need address for GE Money Bank/Old Navy for debt settlement letter?
Thank you everyone for all of your input, it has been very helpful so far. I thought it might help to add that my Old Navy card is a Visa card and my credit limit was $3,600. With late fees, etc it reached over the limit at one point, but it is currently down to $2,900. My monthly payments aren't bad- $100 interest free, but being injured and unemployed it is still very difficult to pay off. I have had to move back in with my parents and rely on my moms part-time job to support me. I have money left over from a student loan that adds up to about $1,900. I'm worried that the money will go too fast, and I was hoping to make things better for the long run. I'd really like to be able to have the credit to move back out in 2 years (or whenever I can return to work).
What are the tips for debt settlement?
If you're at the point of having to negotiate a settlement, then you should first create a doc that lists your:•assets - home, autos, investments, etc.•available money - in bank and on hand•monthly income - all sources•monthly living expenses - utilities, rent, basic necessities, et.Also, list who you else you owe money to. This way you can present a legitimate reason why they should offer you a settlement for less than what you owe. You need to be sincere in explaining your situation to them and that your debt to them is creating undo hardship and stress. They need to believe that getting the full amount owed is unlikely; that a settlement is the best way to prevent a complete loss.The age and type of your debt is crucial to your success. The longer the debt has been delinquent the more likely you'll get a settlement.If they offer you a payment plan to pay off the full amount, then take it only if you can follow through and maintain the monthly payments. If you default on the payment plan they will ask for the balance due in full.You can tell them that your monthly income is not steady and therefore can't agree to a payment plan. Tell them that you can pay "x" amount in one lump sum. Start lower than what you can actually afford. This will allow some room for negotiation.If you are not comfortable doing this yourself, then you can seek help from the many different services for settling debts. Some are fee based while others are free.Warning: Any settlements greater than $600USD will trigger a 1099 income filing for taxes. This means that since the creditor is taking a loss they will file a 1099 on amounts forgiven greater than $600. So if you owed $1000 and settled for $300, then the forgiven amount is $700. Conversely, this is treated as income to you. Now $600 of the $700 is not reported in regards to your taxes. However, you will be obligated to declare the difference ($100) when filing your yearly tax return. Publication 4681 (2015), Canceled Debts, Foreclosures, Repossessions, and AbandonmentsNote: You can declare insolvency to avoid paying taxes on the difference. Index of /pub/irs-pdf...
How do I get started with debt settlement?
Well, first and foremost, I think everyone should make good on their personal debts. We all should because it is our responsibility.That being said, if you are in dire straits and cannot breathe under the weight of debt then settlement is a step you can take to free yourself up.I have little respect for the banking institutions that give credit cards to people who do not deserve them. So I have no problem making them suffer as well….Ok, enough of me going off on a tangent.What I coach people to do in these situations is to reach out to the debtor and offer a settlement.Most will laugh and tell you no chance. I then coach them not to pay the minimum balances any longer and focus on survival. When you get where you cannot pay them any money and don’t for about a year, they will either try to turn it over to a debt collection agency or an attorney. Attorneys are extremely expensive so they will then either call you or have a third party collection company call you.It is at that point when you need to make an offer of about $.15 to $.20 cents in the dollar. In doing so you need to get an agreement in writing and do NOT give chess to your checking account no matter what.In making a settlement offer, you must have to have the funds in hand and pay them via cashiers check or money order.I have successfully helped several people do this so I know it works.Settlement of 15% to 35% is very possible but it will ding your credit report.If they decide to ignore any settlement options, they might try to take it to court. Again this gets expensive for the debt buyer and they refuse gambling putting it into the hands of the courts.Try again to settle and see if this will work. If not, they may get a judgment against you and garnish your wages.Last do NOT go to debt consolidation companies as they will make a bigger mess of your situation. Do not go this route. I am coaching another couple of people who did that and are in worse shape.I hope this helps!God Bless you!!!