How to settle payment for collections?

[Anonymous]

I am a newbie to rebuilding my credit. I would like to thank all of you for the advice and post I have already read. It's a blessing to have found this site.
I have 3 accounts in collections. 1-apartment balance for breaking the lease 3989.00. 2-security deposit for breaking that lease 500.00. 3- medical bill 500.00. How would I settle these debts for a lower amount? What amount should I offer?
I also have a credit union charge off/bad debt of 185.00. How do I tackle this as well?
Any advice is welcomed. I need to get started to see an increase in my scores so I can get a secured credit card. I would like to work on these bad items so I can get a score boost and get approved. I don't have any credit cards at all as of now. Thanks in advance for your input and advice.

[newstart2010]

You need to send a Debt Validation (DV) letter to all of them, including the charge off, and then once you have them validated you need to send a Pay For Deletion letter (PFD) in combination with a settlement offer.  The charge off I would offer 25% of the original debt.  The collections I would offer 45%-55% and see if they counter the offer.  You want to make sure you have an agreement back from them in writing that states the amount you need to pay and that they will delete the trade lines before sending them the PFD offers.

Also make sure you have the money for the settlements you offer before sending them.  That way you don't renig on your offer to them.

Good luck!  and welcome to the boards!

[Anonymous]

Thanks newstart! I will search to see if I can get an example DV letter. I will send those off tomorrow.

[gdale6]

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@Anonymous wrote:
Thanks newstart! I will search to see if I can get an example DV letter. I will send those off tomorrow.

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Welcome to My Fico

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/Debt-Validation/m-p/7133

[RobertEG]

The charge-off was taken by the creditor, and is not subject to debt validation.

The DV process applies only to debt collectors.

It is common for creditors to either sell or refer debt to a debt collector after having taken a CO.

There is thus a high probability that a collection could be added to your CR.  I would thus place priority on discharge of that bad debt.

Additionally, if the creditor sells the bad debt, you cn no longer offer a PFD to them, and would only have recourse to asking for their GW deletion.

I would make an informal call to the credit union, making a PFD offer.  If they declined, I would make a payment in full to immediately terminate the debt.

A low settlement offer would not, in my opinion, be worth the chance of there refusal, with chance of addition of a collection.

[SunriseEarth]

I agree that the CO for $185 should be prioritized, since it may be updating regularly and affects your UTIL.   I'd see if the CU would accept a PFD.   If not, paid and then send GW letters asking for removal.

As for the collections, DV is an option.   Are these within the SOL for your state?

[Anonymous]

Thanks guys! I am really loving the support from everyone. The credit union still has the account and just charged it off. It reports on my CR under accounts but as closed. I will call them to have an informal talk about the 185.00.
Now as for the collections being SOL I need to do some research and see. I live in Mississippi. This is all new to me so I'm still learning as I figure my way through this. Off to research SOL... Thanks again!

[Anonymous]

The statue of limitations in my state is 3 years. The two apartment collections are dated May 2011. The medical collection account is dated Feb 2013.

[gdale6]

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@Anonymous wrote:
The statue of limitations in my state is 3 years. The two apartment collections are dated May 2011. The medical collection account is dated Feb 2013.

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Since you are in MS the debt is officially dead at SOL as well meaning they cannot sue nor attempt to collect past the SOL, so you are in a pretty good position for anything that is past SOL. I would negotiate for no more than 50% on those, if they wont play ball let them age some more. For the CAs still inside SOL I would try the PFD for the full amounts owed if you cant get the OC to recall them in exchange for PIF directly with them. Here you will find some examples of PFD letters:

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Q-amp-A-Examples-and-PFD-Success-Stories/td-p/2031275

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/PFD-Example-Letter/td-p/4519

For the medical collections you can also Google the HIPAA Process and contact its creator for help with those.