Question:
I have two credit cards that I have let become very overdue. I maxed out both
cards before I stopped paying for them. I fell on hard times and I could not
pay for either of them. One of the limits was 500 dollars and the other was
250 dollars. By the time I got back on my feet, they were up to 1200 dollars
and 865 dollars. They both had been turned over to collector. The collector
with the larger debt let me work out a payment plan where I pay 50 dollars a
month for 12 months and they will charge off my account. The other collector
does not want to hear that. When I said that I have a rough time paying 865
dollars for a 250 dollar account they ask me if I am refusing to make payment.
One time they said they know where I work and they would enjoy just taking it
out of my pay. I know that I should pay off my debts and believe me I want to
but does anyone have any advice how to talk a collection agency down? Does
anyone know how they work? How much they pay to collect on my debt?
Answer:
Q: I have two credit cards that I have let become very overdue. I maxed out both
cards before I stopped paying for them. I fell on hard times and I could not
pay for either of them. One of the limits was 500 dollars and the other was
250 dollars. By the time I got back on my feet, they were up to 1200 dollars
and 865 dollars. They both had been turned over to collector. The collector
with the larger debt let me work out a payment plan where I pay 50 dollars a
month for 12 months and they will charge off my account. The other collector
does not want to hear that. When I said that I have a rough time paying 865
dollars for a 250 dollar account they ask me if I am refusing to make payment.
A: And your answer should have been: "No, just trying to negotiate a fair
and
equitable repayment". Nothing wrong with being a tough negotiator. But
if push comes to shove you can tell the judge | credit reporting agency
| etc that they negotiated in bad faith.
Q: One time they said they know where I work and they would enjoy just taking it
out of my pay. I know that I should pay off my debts and believe me I want to
but does anyone have any advice how to talk a collection agency down? Does
anyone know how they work? How much they pay to collect on my debt?
A: And they could garnish your wages too. But that takes a bunch of
work on their part. Typicly these guys try to collect the full
amount. But they are happy to get $0.50 on the dollar.
Credit cards can use one of two forms of collection (that I am
aware of). First one is a typical collection agency. They
turn the amount over to the agency, who then try to collect the
amount. The agency will typicly keep 50% of the amount. So
if they feel that they can make a quick repayment, they may
settle for less than the full amount and take it out of their
margin. Unless they are greedy.
The second will buy inactive acounts for 10 cents on the
dollar. Hoping to collect 12 cents. Usualy these agencys
buy up blocks of millions of dollars at a time. Many of these
accounts are uncollectable (death, bankruptcy, etc) The ones
that can be collected usualy can only pay off a fraction.
These guys you can negotiate with even more. If they collect
25 cents on the dollar, they have made a killing.
