A Time to Settle?
by Barry Noret
CreditMania.com, Inc.
Your heart is telling you to settle your bad debts and
you’re not sure the best way to do it. We recommend that you not deal with the
collection agency if one handles your debt. These are middlemen and they are in
the business of harassing, threatening, and scaring you into paying your debt,
plus interest and service charges on that debt. If you really feel compelled to
make good on your debt, then you need to approach the original creditor and make
the arrangements to pay off that account.
You should realize that by the time your debt was sent to a collection agency,
it has already been written off by the creditor as an uncollectible debt. In
other words they took a write-off on their tax returns... so when you approach
them, they consider your offer to pay them back as windfall. If you are able to
pay the full amount, do so. But if you are still in a bind, you can negotiate a
lower payment. In fact you can start as low as 40 cents on a dollar and work
your way up. But your real goal should be payment in return for the removal of
the negative item on your credit bureau reports. The creditor may seek all or
most of the amount owed for this option, but that’s for you to work out.
We feel the best possible result on your credit reports is to have the item
totally removed, or at the least marked as "Paid". Also request any
mention of this item by a collection agency be removed at the same time. This is
part of the deal. "Paid" is a neutral entry and will not affect your
credit score at all. If you can’t get them to agree this, second choice is
"Settled". This is negative, but it’s much better than
"collection charge off". Here is the list of terms that you do not
want to agree upon: "Paid Charge-Off" -Charge-Off"- "Paid
Collection"- "Repo". These are all still very much negative and
should never be accepted.
We live in a society that is inherently forgiving and most companies are willing
to work with you. On the other hand, most collection agencies are in the
business of collecting debts, and they have never heard "...forgive us
our debts, as we also have forgiven our debtors. Mt 6:12". We hope
you'll consider taking control of your past by repaying your debts as best you
can. Use the tools provided by the CreditMania portal to accomplish this. The
first step is just getting on the phone making the call to the original
creditor. Try negotiating a pay-off agreement on the phone, then
get
it in writing. And do yourself a favor,
fire
the collection company pronto, this will stop the harassment.
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