@unusuallyconfused wrote:Somebody else might be able to prove me wrong, but based upon what you've written, I'd wager that USAA sold the debt to the collection agency.
The clues from your post lead me to suspect that: you said USAA was trying to negotiate with you then suddenly stopped. Then your wife tried to talk to them about it and they wouldn't. Then the collection agency proposes a 50% settlement leading one to suspect that they purchased the debt for pennies on the dollar and even a 50% payment would be a hefy profit for them.
USAA probably reported the debt first to the credit bureaus and that's why it's still there. The collection agency hasn't reported it yet because they are trying to negotiate with you. From what I've seen, they threaten to report you unless you work them ASAP. I think if you ignore the CA's requests you will find shortly that they start reporting, too.
From what I read around here, collection accounts paid or unpaid read the same so the choice is yours if you can pay or work out a settlement.
The priority always has to be housing, utilities, food, other bills and then these debts. If you can settle without it really hurting you, attempt it. But try to stay away from payments unless they make it clear to you that they're not tacking on tons of fees and huge interest rates (which some scum agencies are known to do).
This is not necessarily true. The debt could simply be assigned to the CA. In a case like this, USAA can dictate the minimum payment they are willing to accept for settlement of the account; in this particular case, it is very possible that such a number could be 50%. One can't be sure until guinness' question is answered.
Also, the threat of reporting isn't usually used as a negotiating tool. If it's not being reported, they simply haven't gotten around to it yet or they're not going to do it at all. The only thing that would preclude them from reporting if they intend to do so would be a written payment agreement that specifically bars reporting of the tradeline. Obviously there can be exceptions, but I've found this to be the norm.
What's the name of the company?
@unusuallyconfused wrote:I brought up the threat to report thing because when I was doing research online about CMI Group (Credit Management LP) I found a form letter that they sent to people. Check this quote out from them:
"Credit Management, LP (CMI) has the option of reporrting information regarding your account to all major credit reporting agencies. If we cannot get this matter resolved quickly, we may excercise that option."
That sounds like a negotiating strategy to me? They're pretty much saying, pay and we dont' report. Don't pay and we will.
That's why I think the whole "we don't do PFD" is bogus on their part because according to that quote in the letter, they are perfectly willing to NOT report under certain circumstances so why won't they UN-report under certain circumstances either?
"Obviously there can be exceptions, but I've found this to be the norm."