Advisement

[K7Kate]

What is the name of your state?What is the name of your state?What is the name of your state?What is the name of your state? PA

I have had a phone bill in collections for well over a year now. I originally, in good faith, worked with a CA and was paying so much a month until they told me that was no longer acceptable and they refused to accept any payment from me unless it was in full, which I was and still am unable to do. I have since left the debt alone and the upaid balance seems to be going thru it's CA process, which brings me to this forum today. I received a letter in the mail stating that this agency has agreed to accept a settlement on this account on behalf of their client (the phone company). Of course it tells me to contact the agency for further details. I do know and have learned the hard way to stay off the phone with these CAs! I'm just wondering how I should respond to this. I do owe the debt and do not dispute that. I just cannot give them $400 up front. This is being reflected on my credit report and is hurting me. This is the first time I've ever received anything regarding a 'settlement' and I'm curious as to what they mean by this.
Does anyone have any advice?

Thanks a bunch!!!!

Kate in PA

[Debt Guy]

Personally, I think that talking to a CA on the phone is OK -- but there are many on this board who will strongly disagree.

If you have a concern about being talking into something, there are a couple of things you can try.

One is to just develop an internal discipline that says: OK, I will talk and listen but will just say 'I need a couple of days to think this over and I'll call you back'. That gives you a cooling off period to think about it calmly and decide what you want to do instead of what they want to do.

Another idea is to write them a letter back and make a propsal for what you are willing to do and ask that they respond in writing. They won't like this much because they would much rather push your emotional buttons because it obviously works.

If you do decide to talk on the phone, do not under any circumstance give them your checking account number. Do not send them any money until you have your deal in writing. Just ask for a settlement letter to be faxed or mailed to you. Again, they won't like it but you should be able to get your agreement in writing.

The settlement agreement should says words to the effect that you are paying X dollars and they are releasing you of all claims. That is the only way to insure that your get this behind you cleanly.

PS -- a DV makes no sense since you have acknowledged the debt as truly yours -- also, I take it that this is fairly recent (in the last couple of years) so you are still within the statute of limitations (four years in PA). If either of these assumptions are false, then the above advice makes no sense at all.

[K7Kate]

I forgot to ask this in my original post. What I'm really wondering about this letter is: Is this an invitation for me to make an offer on a settlement, or do they call the shots with a settlement? If they want to settle, I may be willing to do something here. Also, how does a settlement appear on a credit report? Is a settlement a bad thing?

Thanks!

Kate in PA

[Debt Guy]

Q. forgot to ask this in my original post. What I'm really wondering about this letter is: Is this an invitation for me to make an offer on a settlement, or do they call the shots with a settlement?

A. Typically, they have a number in mind. What they are trying to do is accelerate the cash flow so they should be willing to give up something for that. If you don't like what they offer, propose something back and see what they say.

Q. If they want to settle, I may be willing to do something here. Also, how does a settlement appear on a credit report? Is a settlement a bad thing?

A. A settlement can show a couple of different ways -- "paid" or "paid-settlment" or "paid-settled for less than full balance". Your credit is already hurt by the fact the account is delinquent.

An idea. Assume they make an offer that you think is attractive. Say, "fine but I want you to delete the debt from my credit report". Sometimes they will and sometimes they won't. Deleting it entirely would be the absolute best in terms of how your credit appears.

Whatever you do, get it in writing before you send money. Ask them to fax or mail you a settlement letter and then read it to make sure it says what you expected it to say.