Settling credit card debt already in collection with original creditor
What about settling credit card debt which is already in collection, with original creditor? Or any type of debt like payday loan, unpaid medical bill, etc? Some borrowers look at this as a way of getting that dreaded collection record of their credit reports.
While it is possible, it requires quite a bit of work. First you have to convince the original creditor to recall what is likely an already charged off debt from a third party collection agency. Before doing anything, the creditor is likely to ask you what kind of settlement you have in mind. Settling credit card debt with you at this stage should bring some sound financial benefit to the creditor. And that means bad news for the debt ridden borrower, especially if you are dealing with a small payday loan company or private medical office.
If the debt was transferred to the internal collection department of some main credit card lender, it may sounds easier since it is an internal matter, but with large lenders you have to deal with much more bureaucracy. Regardless, if this is the way you want to go then,
contact your creditor and request to pull the debt account from the collection agency. If the creditor complies, try to negotiate a settlement. Again, settling here could be more expensive. Your goal is to negotiate a pay for delete settlement for less than the debt balance. In pay for delete agreement, the creditor promises to instruct credit agencies to delete the derogatory record from your credit report in exchange for receiving the agreed upon payment.
If the creditor doesn't agree to recall the charged off debt from the collection agency, try settling with the debt collectors in exchange for deletion of their record from credit report. Start with 25% settlement offer. Here is the pay for delete settlement letter. The negative record with original creditor will stay on your credit report for 7 years. More details on this are under bad credit time limits.
Regardless of whom you are settling your debt with, if you reach a settlement, check your credit report after 30 days or so, to make sure the negative information is removed.
Thu Jan 13, 2011 10:01AM | Copyright: www.bad-credit-advisor.com | More in Credit Card Debt | Comments (0)
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