Old Collection

[Anonymous]

I have an old collection that will age off of my credit report at the end of next year and it is past the SOL. It has recently been reported by an OCA. The original creditor has not reported the debt on my credit report at all.  I disuputed the debt becaue  I did not recognize the debt. The original creditor has been sold to another company (this information is from my own research). I just received a response from the collection agency stating that the debt is now double the amount orginally owed. They are charging me 23.9% interest per year. This new amount is not being reported on my credit report by the collection agency only the original debt. The letter also states that the collection agency is giving me 30 days to dispute the validity of the debt. I intend to send another letter disputing the debt and the interest. My questions are:

1. Can I be charged interest and if so how can I determine if 23.9% is excessive or against GA law?

2. If the results from the dispute come back valid, should I try to work out a reduced pay off with the original creditor?

3. How do I go about negotiating a lower pay off? What percent of the debt should I offer?

4. I know that once a pay off is agreed to and the OCA gets the money the debt will show that only a portion of the debt has been paid. What effect will this have on my score opposed to paying the debt in full?

Thanks.

[JoeBJay20]

1. You can check the state resources thread to see if there's information in there that may help you, or you could contact your state's attorney general or collection board office. But chances are, the interest rate they're charging is legal, they're often written in the fine print of contracts you sign. However, with any new debt, your first step should always be DV, even if you know without question that the debt is legitimate. This forces the CA to establish that they have legal authority to collect on this account.

2. If it's past SOL, then there's no need to dispute it. Simply send them a letter stating that the account is past SOL.  I'm a bit confused about whether this account is reporting or not based on what you said.

3. Technically, if it's past SOL, you have no legal obligation to pay.  If you want to pay it and it's reporting, you should attempt to negotiate a PFD. There is no set amount to offer, it varies greatly by the CA and the individual circumstances. That being said, you could offer a lower amount since this account is past SOL. However, you should review your state's statutes to be sure that the PFD won't be viewed as an offer to pay, which could reset your SOL.  Unless you're really desperate to get this off your account, I personally would let sleeping dogs lie.

4. Not necessarily true. You can make a settlement offer and make one of the conditions that the account will be considered paid in full and that the remaining portion will not be sold to another CA or attempted to be collected by the CA you're working with. But if you do close the account as settled, it won't affect your score so much as it will hurt you in a manual review of your file.