Pay more for PFD

[-NewGuy-]

So I called a CA today to discuss a PFD, and was told that I have to pay the amount in full (in full being amount PLUS interest and fees) for PFD. She then said that if I wanted to pay less money, I could take a settlement amount for much less, but that would remain on my report as Paid - Settled.  She said with PFD her supervisor would draw up the documents outlining the deletion, and they would process near the end of the month when they do their reporting. Granted I am very new at this, but I haven't heard someone talk like this. Most people I have talked to have been very secretive about the PFS process, or call it a courtesy deletion or something. Weird. Anyway, just thought I'd mention it.

[FixMyCredit1992]

Keep in mind collectors buy debt for 10 cents on the dollar, so it appears they want as much money out of you as possible.

I would settle, then wait a while and send a good will letter.

[-NewGuy-]

I just thought that it was weird to blatantly be selling PFDs... it kind of caught me off guard really. Sounds like it will cost me more than double to PFD

[RobertEG]

You are correct that it is not the norm, as deletion based on payment of the debt is directly contrary to the wirtten policy of the CRAs, and is included in their standard credit reporting manual, and in their reporting agreements.  Thus, most debt collectors will not place in writing something that can be interpreted as a standard policy on their part, as it could possible jeopardize their credit reporting agreements.  Couching as individual deletions based on the facts of individual cases is more the norm.

That being said, I would not be concerned with their potential issues, but rather with my own.  If they choose to agree to a PFD, it is legal, and becomes a binding contract once you submit pament.  If paing the full amount is worth getting CR deletion, I would jump on it.  However, if saving money at the expense of both their reporting remaining in your CR and affecting your score, AND the placing of a comment in your file that you did not pay your entire debt is more important, then I would take the settlement.

Unless the debt is high, most will opt for CR deletion.

If you do obtain a hefty settlement, then if the amount saved is $600 or more, the debt collector must also send a form 1099c to both you and the IRS, as cancelled debt is considered as taxable "income" by the IRS, so part of your savings will go to Unclw Sam.

[-NewGuy-]

Robert, I'm with you on that one. I am going to do the PFD when I am able later this month. Evevn though Ihave multiple collections that I am trying to remove, these are two of the newer ones. Honestly, it's worth it to me to get them off my report. Maybe if we were talking five figures and they were going to drop off in six months would I consider a settlement, but not when they would remain for another six years and we're only talking a couple hundred bucks. Honestly, I was just surprised at their method. I was also told to contact that specific person again since they made me the offer (despite the fact that another agent of theirs made the same offer three days before, LOL). Do collections agents get paid on a commission structure normally? 

[RobertEG]

If the debt collector owns the debt, then tthey get every penny, and I would presume their employees would be on a direct percentage basis.

Howver, if they are simply an assigned debt collector, their fees are determined based on whatever is in their contract with the OC, and the OC gets the total payment.

In that situation, their commisission may be calculated differently.