The old unpaid credit card debt is like a ghost that haunts the consumer in the form of a debt collection letter and the creditor/lender’s refusal to extend him/her credit or loan. When the collection agencies start calling the consumer may feel confused, harassed, and inconvenienced.
What can the consumer do about it?
Even if the consumer’s debt has been passed on to a collection agency there may still be some hope for it to be removed from his/her credit report. The consumer can try to negotiate with the collection agency either personally or verbally. The consumer can also write the agency a letter. Whichever mode of communication the consumer chooses to employ he/she has to make sure that he/she receives the collection agency’s written response.
The consumer should always try and negotiate for a discount instead of paying the debt in full. It may sound a little bit confusing or unfair to do that but the consumer should know and understand that these collection agencies paid pennies on the dollar to get the rights for this particular collection and in doing so they placed themselves in a winning situation—they stand to earn from something that they acquired for almost nothing.
How should the negotiation with the collection agency go?
The consumer should ask the collection agency the following:
1.) If he/she may be allowed to pay off this debt for less than the original amount (or what is called “pay for delete”), if that request is refused, then the consumer should just take the more acceptable route of paying for the full amount.
2.) The removal of that debt from his/her credit report completely.
3.) If that is refused, ask for the next best thing which is to get them to put “Paid Satisfied” on the report. It may not be as good as getting it completely removed from the credit score but it is a whole lot better than getting the “unpaid” mark.
The consumer should remember that he/she needs to get something out of paying the debt and to not make any payments yet or promises until he/she has seen or has received a letter or document in writing from the collection agency containing the exact agreed upon terms.
He/she should also check his/her state’s Statute of Limitations.
Debt collection agencies
How do collection agencies work?
How debt collection accounts affect your credit report
Dealing with debt collectors for old accounts on your credit