What if a collection agency doesn’t honor a ‘pay for deletion’ letter?
Is it true that if a collection agency doesn’t honor a ‘pay for deletion’ letter after you’ve paid it, you can then send a letter to the original credit grantor (the bank who gave you the loan or credit card) telling them that you are no longer responsible for this debt or you do not agree with the debt and that they are to remove it? How does that work? Thanks!!
Pay for Deletes only work for non credit card debts like defaulted cell phone or utility bills. For charged-off credit card debts, even if the collection agency that has your account follows up on their promise to delete their notation from your credit report, the original creditor/credit card company will still continue to report the charge-off notation separately. A charge-off stays on your credit report for 7 years from the date of default…whether it’s paid or not.
- There are two reasons that you may want to consider paying back a charged-off account:
1) You are applying for a new mortgage, loan or apartment and the creditor is insisting that all defaulted items be paid off
2) There is a confirmed lawsuit pending on the debt
If neither of these apply, then it’s often best to take a "Don’t Ask/Don’t Tell" approach…just sit tight and let the charge-off fall off your credit report naturally in 7 years. The main damage of the charge-off to your credit should be over in 2-3 years.
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If you’re going to pay off old-charged-off debt anyway, then you might as well negotiate the lowest, rock bottom settlement you can possibly get, being that the negative charge-off notation is going to stay for 7 years on your credit report, regardless of whether the charge-off is paid or unpaid. …Offer 25%. Mail them a vaguely worded statement like:
I am willing to settle this matter for 25% of the original amount. This is in no way an admission of this debt, but rather an attempt to settle this matter. Your firm must send me a written agreement on your company’s letterhead that you will accept this amount as "payment in full" and that this issue will be settled. Upon receipt of this agreement, I will mail you a money order for this amount.
Once the debt is sold to a collection agency, the bank or the original creditor is no longer involved.
A collection agency has not agreed to your demand for "pay for deletion" unless you get it in writing from the collection agency that they are willing to delete in exchange for payment.
Unilateral contracts are not enforceable.
Keep in mind that a collection agency can only delete entries that they placed in your credit files. They cannot remove the original creditor’s entry.
I’ve never heard about this loophole, but I would venture to say that *most* collection agencies don’t really care if you send a letter or not. There are too many ways for them to get around that. I would imagine you need to keep airtight records to use this tactic, if it works.
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well, all i can say is it’s all up to the negotiation and the written agreement.
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I think If you already paid it the bank who gave you the loan or credit card is not involved anymore. In the first place you should talk to the agency with full details before you made some transaction with them.
You can always ask to the higher ups about that. But for my personal policy, if a collection agency doesn’t agree for delete agreement, I’ll contact the original creditor and propose the same idea.
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Did you have a written agreement for “pay for deletion” before you paid or did you request it after? As I understand it, once you have validated the debt it is much harder to negotiate with the collection agency, and they can still list it on your credit report until it is paid.
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It would be better if you get help from lawyers on that field, they might solve or give you solution about your problem.
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The key here is never negotiate the collection agency through the phone because it is more likely to fail. Talk to the original creditor if the agency doesn’t approve your proposal.
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You could talk directly to the original credit grantor to verify that you already paid it and they didn’t honor your “pay for deletion”
My suggestion would be always be aware of credit cards, generally bank tends to delay sending the bills, which affects the customers.
In sence, you should could go directy to original credit bank and verify that you have paid it. Anyway, in order to get more information in detail, you could seek help from a layer.
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You would have thought that would be the case but I am sure that the original company would fight against this as they would still be out of pocket…
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Yah it is 100% true that every collection agency or banks needs to give deletion letter after we paid all our debt. Because some time banks or collection agency forget that our whole debt has been paid and they send notice again and again that your debt is still remaining which is very bad.
Isn’t that a protocol for these agencies such as banks?
If they didn’t want to give it, then force them. Deletion letter is very important.
I think the bank is0 not involved anymore if it already passed to collection agency..
The bank isn’t involved but they can be re-engaged. A deletion letter to both the bank and the collection agency will help in some cases.
Never negotiate over the phone. You must get everything in writing so you don’t get burned in the long run.
I suggest that you to review the agreement you signed prior to the purchase of that credit card. Surely, you can find an answer there.
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Very informative, good content. This is very helpful to everyone especially to those people who are not aware of this. Actually it is good to have a credit but sometimes we might never know where and when thus our limitation is.
The key to dealing with a collection agency is to act quickly. Once an actual collection agency is involved, banks cannot help(and probably don’t want to anyway) you anymore. Always always talk to the agency before making any transaction with them, get to know them, their terms and conditions, everything.
Getting things formally documented will help you fix this case. Do check the written negotiation and talk to experts in this field.
Well, it’s much difficult situation because the scenario which you are saying is stating that the payment has been already made hence the probability to get the returns is much less!!!
This concern is about written documents and the legality of the negotiation. I guess you’ll be needing to consult a pro on financial assistance.
I don’t think this is possible, it’s up to you if you want to get assistance of a financial adviser but it depends on the amount. If the amount is worth it,then go find someone who could help you. I’ve read previous comments and I think you could take the advice from CatDad.
Hii.. I’ve not faced such difficult situation in my life still I like your tips and I’m totally agree here if any collection agency is not doing good behave with you, you can consult a good lawyer.
I like this kind of the blog,thanks and keep going.
Thanks very much for the info, CatDad! That’s genuinely helpful. Possibly even more helpful than the post itself, although that definitely provided a grounding for your idea & letter template.