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I'm brand new to the forum and hope I'm posting this in the right category. Thank you in advance for reading and posting to my question!
I'm in the process of rebuilding my financial life after completing a Dave Ramsey "Financial Peace" seminar. I've done well with all the steps, and am now on the last item of paying off debts. That's why I'm here.
I just received a notice from a Collection Attorney asking for a $1,164.87 full payment on an account I owe. I'm terrified to contact them, but I'm more terrifed of going to court! I want to pay the debt, but I can't make a full payment right away (more like two installments). In addition, the letter states that I owe $1,164.87 but "because of interest, late charges and other charges that may vary from day to day, the amount due on the day you pay may be greater." Is that legal in Missouri? I don't know what to do or how to go about making this right.
My questions:
1. Should I send a notice asking for credit verification?
2. Can I still make payments (with money order of course!) when the account is at a collection attorney?
3. Do I really have to pay interest and other fees?
Thanks again for any advice you can offer! It's so appreciated!!!!
First off....do you know who this from and that it legit? Secondly....have you pulled your credit reports yet? You can get all 3 for free here:
http://www.annualcreditreport.com
Once you view your reports, you need to determine if this collection has actually reported anything yet. If not (and you know the debt is legit), I would contact the original creditor (OC) immediately and setup a payment plan directly with them. Doing so will cripple the collection agency's (CA) ability to collect the debt and keep it off your credit report! Even if the CA has reported, if you can pay the OC directly, the CA will have to remove this from your credit report. The problem is, most the time once an OC turns it over to a CA, they usually won't take payments directly, but it occassionally happens. Be persistent and hope for a little good luck.
If the OC won't play ball, then I would mail a debt validation (DV) letter via certified mail return receipt requested (CMRRR). Even if you know who the OC is, this is necessary because if the CA can't produce the validation documentation, then they can't report it on your credit report which is important.
If they do validate and this is already on your report, then I would move into a negotiation strategy. And by this I mean I would offer full payment (or a settled amount) in return for the CA deleting the collection from your credit reports. Most the time CA's don't want to do this, and you usually have to ask several times and/or different people. Some simply won't do it, in which case you have to decide rather you want to pay or not. My opinion is you should pay if it's your debt, but I would always ALWAYS negotiate for a total deletion first! And by the way, make sure you get all this in WRITING as many times the CA will take your money and then simply slap "paid" on your collection record which does nothing for your credit score. It has to be DELETED to help you!
Side note: When you pull your credit report, and have linked the OC to the CA then you can determine the date of first delinquency (DOFD). This is important as this date is what starts your statue of limitations (SOL). Each state's SOL is different. But it's important because if you are within SOL then the CA or OC can sue you, if you are outside SOL then they cannot!
PS - There are DV & PFD letters on this site you can find by searching...
Just dont do what I use to do put them on speaker and hit a stopwatch and see how long they would stay on hold LOL... 2min 45 sec is my record
I just pulled my Experian report and the original credit is on there, but not any collection agencies. It states "transferred, closed."
Thanks for the advice! I'm going to try to pay the OC first and see what happens.
Thanks again!
Just because you pay an OC does not stop the CA from reporting. In this case the OC has sold the debt and legally can not work with the OP. And, no, by paying the OC, the CA will not have to remove the account, it would only need to be marked as paid.
Is this account still within SOL? Sending a DV is not recommended if an account is within SOL unless you can pay in full.
DOFD determines the date an item will be removed from your CR. It is the initial date to determine SOL for suing purposes. Any payments after that can restart the SOL.