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How To Pay Off Collection Debt

Ask This Company To Pay Off Your Late Tax Debt

When Do We Pay Off Debts That Are In Collections?

Each year, the IRS forgives millions in unpaid taxes. If you have more than $10,000 in tax debt, or have 3+ years of unfiled taxes, you could get forgiveness too. You might be eligible to lower the amount you owe, or eliminate your tax debt completely.

Easy Tax Relief could help you lower or get out of your tax debt for good. Theyre well respected in the industry, hold an A+ BBB rating, and have been recognized for their ethical standards when dealing with tax debt.While most tax companies just put you on a payment plan and file your taxes for you, Easy Tax Relief talks to the IRS directly. They can help you pay off your tax debt faster while potentially reducing what you owe.

Important: Not everyone will qualify. To take advantage of this special program you must owe more than $10,000 in past-due taxes.

  • One-on-one evaluation with a debt counseling expert
  • For people with $10,000 in unsecured debts and up

Dispute The Debt With Resurgent Capital

Sometimes, consumers have valid complaints to dispute a debt. The debt may not be theirs, or they may have paid off the amount and Resurgent Capital isnt aware of it. Many reasons can lead to a dismissal of the debt if you have the evidence to support them.

Individuals who are victims of identity theft should assemble the documentation they have concerning their case. Complaints to the FTC, credit reporting bureaus, and local law enforcement can all help support a case of identity theft.

If you have previously paid the debt, you can provide a copy of your canceled check or statement showing the payment.

Whatever your dispute is concerning the debt, outline the circumstances and provide the requisite evidence clearly. The better the support you provide, the more likely that Resurgent Capital will stop collection activities against you and dismiss your debt.

Get Out Of $10000 Or More In Debt

If you have a lot of debt, getting out of it can feel stressful . Heres the problem: the longer you put off tackling it, the harder it gets to fix. If you dont take control of it early on, it can add undue stress to your life for years. But what if there was a way to get out of debt once and for all?

National Debt Relief could help. If you have more than $10,000 in debt from credit cards, medical bills, collections, or personal loans, their representatives might be able to assist you in consolidating your debt into one low monthly payment.

Best of all? There are zero fees until your debt is resolved, and you could be debt-free in 24-48 months. To get started, just answer a few simple questions. It only takes 30 seconds to see if you qualify!

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Negotiate A Payment Plan

If you cant pay in full, youll want to contact the collection agency and negotiate a monthly payment plan. Let the agency know how much you can afford to pay and let them determine how many payments you must make to pay off the past-due account. Some debt collectors have fixed payment options that youll have to adjust your budget to match.

You can also ask if the company is willing to delete the account after youve paid in full, just like above. Its unlikely the company will but its worth trying.

Pay It Off In One Lump Sum

Collections and Debts to be Paid

If you come into money through a tax refund or inheritance, or if you just hustle to earn the money, paying off the debt in full with a single payment can quickly resolve your debt collection woes.

First, make sure this fits your financial situation. Weigh the pros and cons of funneling money into wiping out debt versus the loss of money for other expenses.

Paying in full can get the debt off your back for good, but make sure you get the agreement in writing first. Keep this proof in case the payment isnt recorded correctly or the debt somehow gets resold to another collector.

Readers also ask

Your first debt-payoff priority should be addressing the types of debts most likely to be toxic. Debt is toxic when it costs you too much in money or lost opportunity or carries too much risk. That would include such things as payday loans, high-rate credit cards, rent-to-own contracts or extended car loans. More

Negotiating a settlement takes persuasion and caution. Explain to the creditor why you cant make full payment. The greater the debt and the longer its been in collections the more likely the creditor is to accept a settlement. As with any negotiation, start lower than your target. If you want to settle for 50% of what you owe, for example, try starting at 30%. More

Ignoring a lawsuit over a delinquent debt puts your wages, bank account or property at risk. Worse, you can also lose the ability to dispute that you owe the debt. More

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How Long Do Debt Collectors Have To Collect A Debt

Unpaid debts are considered time-barred, which means that if a debt collector doesnt collect a debt you owe by a certain number of years , you cant be sued over the debt.Ethically, of course, you still owe the debt, and a debt collector can, pretty much until the end of time, still send letters and make phone calls, entreating you to pay up.

Pay Off Debt Even In Collections

Catching up on old bills is not easy. Sometimes you are aware of bills that are past due and the creditor is attempting to collect on them. Other times, just when you decide to purchase a new car, or a new house, or refinance your mortgage, you decide to take out your credit report and you find a new collection item. Collection items are a drag on your financial health. At the best, accounts in collection lower your credit score, and make it impossible to get new credit or improve the credit you have. Even worse, you have to deal with collection calls, letters, threats of lawsuits, and sometimes harassment by collection agencies. If it is a struggle to pay your monthly bills, then collection items are a big straw on your financial back.

It is important to deal with delinquent accounts, because if collection items end up in court and a judgment is issued against you, then you may be subject to wage garnishments, bank levies and liens on your personal property.

No matter which stage you are in the collection process, it is important that you learn your rights. There are different ways to handle your accounts, and the right way will depend on your circumstances. Here are the steps that you need to take to pay off debt even in collections:

Step I: Decide if you should pay the debt.

  • Verify that the debt is belongs to you.
  • Verify that the debt is collectible.

Step II: Choose a method to pay the debt.

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Errors Happen Dont Let Them Happen To You

To offer some eye-popping context: Since 2015, through the , more than $10.2 billion in erroneous debt has been removed from TransUnion® credit reports.

See an error? Make sure you reach out to both the lender that issued the inaccurate information and the credit bureau thats reporting it. Its also good practice to notify all three major consumer credit bureaus to make sure the mistake isnt repeated.

If you have questions about whether youre liable for a debt, it can be helpful crucial, even to consult with a and a lawyer.

You may also want to review the rights afforded to you by the Fair Debt Collection Practices Act, which aims to end abusive debt collection practices by debt collectors.

Settle The Debt For Less Than The Total Amount

Pay Off Collections or My Deferred Student Loans?

Often when a debt has gone into collections it means that the individual is experiencing some type of hardship and cannot keep up with their monthly payments. In situations such as this, negotiating a settlement for less than the amount owed can make paying off the debt easier. This can be done yourself or by having a professional debt relief company handle the negotiations for you.

Trying to negotiate a settlement on your own will require time and in many cases, persistence, as some creditors may not have any motivations to forgive part of the debt. Youll want to explain in detail the hardship youre experiencing and the reason youre making the request. In negotiating, ask for more to be forgiven than you think is even possible. For example, if youd like 40% of the debt to be forgiven, then begin by asking for 60%. Make sure as well to get the agreement, along with the terms in writing, and do not make a payment until you have the agreement in writing.

If you go the settlement route, keep in mind that if more than $600 of your debt is forgiven, the IRS considers that taxable income, and youll likely receive a form 1099-C to report any amount over $600 on your tax returns. Make sure to consult a tax expert.

Once a debt is paid off via the debt settlement method, the creditor will then report the debt on your credit report as a partial payment. While not as ideal as payment in full, it certainly is better than having a delinquent, unpaid account on your credit.

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How To Negotiate With Collection Agencies And Win

Most people would rather have a root canal without anesthetic than talk to a collection agency. Believe it or not, though, its possible to negotiate with a collection agent and end up paying less than you owe.

Why is that? Because the collection agency bought the original debt from your creditor, most likely for a substantial discount. That means they dont have to recover the entire amount to make a profit. By proposing a settlement, you can pay off the debt quickly, usually for less than the original amount.

The collection agent is incentivized to get you to pay as much money as possible with the least amount of effort on their part. The agent works on commission and gets a portion of whatever you pay.

The best outcome is to get this debt off your back by paying a lump sum and getting a receipt and a commitment from the agency to update the status of your account on your credit report to reflect payment.

Heres how to do itFirst, figure out how much you can afford to pay before you make the call. It will only make matters worse if you promise to pay more than you can. Be prepared to get a refusal for whatever you suggest in the beginning the agent will almost always say no at first, and it isnt necessarily final.

On the phone with the agentHeres one way to start off: This is Jane Doe. Ive been notified of a collection on Account #XXXXX. I can pay you $2,000 as payment in full on the account.

Old Debts Can Cause Problems Whether You Pay Or Not

At first glance, it might make sense to just pay off a debt collection agency. After all, that’s the easiest way to make them leave you alone, right?

Not exactly. Sure, paying a debt collection agency may get them off your back. But that’s all it’ll do. Evidence of the unpaid debt will remain on your credit report for another seven years. The actual amount of the debt doesn’t matter. Collections raise the same red flag on your credit report, regardless of whether the debt is for $100 or $100,000. This can affect your ability to secure loans in the future.

What’s worse, intent doesn’t matter in debt collection cases. Many debtors aren’t trying to dodge their creditors. They just don’t know they owe money. This happens all the time. A creditor may send an unpaid debt notice to a borrower’s old address. The borrower never receives it and goes on with their lives, unaware of the debt following them.

This lingering debt can have some surprising effects. It’ll make getting new loans more difficult. Securing financing for a car, mortgage, student loans, or home improvement is significantly more difficult with bad credit. But that’s not all. Bad credit can also make it difficult to rent a home or even open an online streaming account.

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Do You Have To Pay Zombie Debt

Maybe. If your states statute of limitations has run out and the debt collector cant sue you, you may be able to avoid paying. Creditors may be able to still hound you about old debt without suing you. Most dont, though, because they sell the debt or write it off. Also, the priority for most creditors is fresh debt.

If you acknowledge over the phone that the debt is yours or pay even a portion of it, however, that action may revive the debt and its 7-year lifespan on your credit report. If that happens, you may want to settle or pay the debt so that it doesnt affect your credit report.

If you pay a medical debt, the from your credit report. Paid medical debt no longer stays on your credit report for 7 years.

If You Dispute A Debt

Excel Debt Payoff Template Collection

If you dispute the legitimacy of something in your debt collector’s file, you must give the collector written notice. Simply calling the collector won’t cease collection activities.

If possible, send your dispute letter by certified mail so you know it was officially received by the collector. The collector then has 30 days to determine whether or not the disputed item is correct.

If the disputed item is correct… The debt collector can continue collection activities.

If the disputed item is incorrect… It must be corrected. The debt collector must notify anyone who has already received a report containing the incorrect item. If, at the end of 30 days, the debt collector has not been able to determine whether the item is correct or not, they must make the change you requested and notify anyone who received a report containing the incorrect item.

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Calculate How Much You Can Afford To Pay

Say youve determined that you do, in fact, need to repay your debt. Next, youll want to start thinking about what it will cost you to do so.

Before having a conversation with a debt collector, review your budget to see how much you can realistically afford to pay.

Its crucial to do this first, since failing to uphold your repayment agreement could restart your seven-year period of credit reporting and restart your period of legal liability.

The best payment option depends on your personal circumstances. Generally speaking, you have two payment options.

  • Lump sum payment, or paying off all your debt at once, is the fastest way to resolve a collection. Its typically the most cost-effective, too, since it could give you leverage to negotiate a lower payment amount. But be warned that settling an account for less than the full balance owed may not be ideal in terms of your credit. Since you didnt pay off the entire debt as agreed upon originally, your lump sum payment may not have as positive an impact on your credit scores as paying the original account in full.
  • Installment payments can help you manage the financial burden of repaying a large debt by spreading it out into monthly installments. But this option can put you at risk of restarting the statute of limitations on a debt and restarting the time period for how long the negative information continues on your credit reports.

How Long Can A Debt Collector Legally Pursue An Old Debt

A debt collector can legally pursue an old debt if:

  • The debt belongs to you

  • The amount is correct

  • The collector is entitled to pursue payment

Even if all this is true, your states statute of limitations may prevent collections agencies from successfully suing you. So, a creditor can continue to hound you about a debt even if they can no longer sue you.

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How Many Points Will My Credit Score Increase If I Pay Off Collections

On your credit report, it will show up as Paid, but it wont have a positive effect on your score from the more popular ranking systems because it doesnt remove the information from the credit report.

There are some more recent scoring systems from VantageScore and FICO, so if a lender uses either of these it might impact your score. This is information worth investigating further if taking out another loan or debt in the future might be needed.

What Happens If You Dont Repay Time

Paying Off Old Debt and Collections on Your Credit Report

There is no real way to get out of collections without paying up. While you have no legal obligation to repay time-barred debt, its still an unpaid debt that stays in your credit history and can lower your credit score for years. That, in turn, might affect your ability to receive a loan or mortgage, buy insurance or get access to a new line of credit like a credit card.

Its illegal for debt collectors to sue for time-barred debt, so if this happens to you, inform the judge that the debt is time-barred and provide documents to confirm the date of your last payment.

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The Truth: Should You Never Pay A Debt Collection Agency

George Simons | July 21, 2022

Summary: When a collector contacts you, respond with a debt validation letter. You may not want to pay a collector if you will never have any income or assets, if you don’t owe the debt, if you want to settle for less, if the statute of limitations has expired, or if the collector doesn’t own the debt.

You’ve heard that you should never pay a debt collection agency, and now you want the truth. What happens if you never pay collections? Should you pay the debt collector or the original creditor?

Debt collection agencies can employ a variety of shifty tactics. They may start with harassing phone calls and escalate from there. But depending on your situation, you may never need to pay a debt collector. Not sure where to begin? SoloSuit can help.

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