Remember to ask the representative to sign and return it to you. You must hold out on its terms until the creditor gives you what you want. Once you’ve written that settlement check, your leverage is gone. So, get your terms in writing before you even open your checkbook.

Remember, you have the advantage, because you have something that the creditor wants. This letter is a legally binding contract that states:

1. With whom you reached this verbal agreement.

2. The date the agreement was made.

3. The amount of the agreement

4. How the item will be reported on your credit report

To further illustrate the importance of obtaining a written agreement, this is typical of our current medical billing system. “I had elective surgery and I told everyone involved that I had opted for this surgery because they were going to fire me (permanently) and I would have time to recover. The hospital, the doctors, the office and the medical laboratory assured me that My insurance cover the procedure 100%, I told them that it was imperative that it be so, since I would not have the funds once I was out of work.

The bottom line is that I am being sued for this money and I have received threats to garnish my wages. I hired an attorney and offered to pay to satisfy this “bad debt.” My attorney informed me that they had no legal right to present this as a “bad debt” when I was contesting the charges and I threatened them with a defamation lawsuit. I agreed to pay $ 300 if they accepted it as full payment and reported it. as a “disputed debt paid in full.

They agree. I haven’t heard from them since I cashed my check and I am still paying an attorney to fix this.

Third Party Collection Agencies – Once your account is 90 days or more past due, it is usually turned over to a collection agency. A collection agency is a company whose main purpose is to collect debts from its clients. You may be an attorney, but most of the time you are just an independent agent. You will be happy to know that you have more influence with a collection agency than with the original creditor. There are simple legal steps you can take to make contacting collection agencies illegal.

That’s right, you don’t have to be subjected to continuous harassment! The only time it is in your best interest to negotiate with a collection agency is when they reported the item on your credit file. So they have the power to eliminate it.

The good news is that collection agencies will almost always agree to remove the negative list more easily than banks or credit cards. The only case where you should have a real problem with collection agencies is when they represent a larger institutionalized creditor.

If the original creditor reported the item, the agency may not be able to change what they reported. In fact, some of the larger lending firms have agreements with the agencies not to agree to remove items from the files as an incentive for liquidation. However, as you will read in “Internal Methods to Change or Remove a Credit Item,” there are ways around this. The bottom line is that almost anything can be solved by offering the right solution to the right person.

On those occasions when it is in your best interest to negotiate with outside collection agents (that is, when they included a negative entry in your credit file), you will find that collection agencies are the easiest to find to agree to remove a negative item.

However, the key ingredient or concession that is part of any settlement with a collection agency should be the complete removal of any reference to a collection agency from your credit file. Any negotiated agreement that does not include the removal of the name of the collection agency and / or the fact that the account went to collect is virtually useless if your goal is to save your credit.

The fact that you “paid in full” to a collection agency (not the original creditor) is not impressive, except that it reflects the collection agency’s ability to collect a debt. You never want the name of a collection agency to appear on your credit file. Pay 100 percent if necessary, but negotiate your name on your report.

If you can’t come to an agreement, as a last-ditch attempt, you can let them know that you are invoking your rights under the law and prevent them from contacting you. Some states allow collection agencies to file a lawsuit on behalf of the original creditor. To determine how firm you will be in your negotiations if you live in one of those states, the same considerations that apply to the original creditor also apply to the agency: the dollar amount, type of debt, age, and laws of the debtor. of the states in which you live and work. A brief consultation with an attorney can clarify the position your state occupies.

Regis P Sauger

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