How to Negotiate a Collection

How to *Effectively* Negotiate with a Collection Agency

Before you pay a dime, first check the statute of limitations in your state.



If you have any older collections, typically 3+ years old, they may have exceeded your state’s statute of limitations. A creditor will often keep your debt listed in case you pay, rather than remove it at the proper time.

If the proper time has elapsed, simply contest the validity of the debt, giving the statute of limitations for the reason and you’re home free! Once the statute of limitations has elapsed, you no longer have a legal obligation to pay anything towards the debt! Of course, unscrupulous bill collectors will try to convince you otherwise!



(There are some exceptions to this rule of course, but you should know that making a payment on an expired debt - or even offering to pay an expired debt may nullify your statute of limitations defense. Proceed with caution!)




Next you need to set a budget. Just how much you are willing to pay to settle the debt?

As a starting point for your negotiation, it’s best to learn exactly how these collection agencies obtain your debts.
In the industry, these companies also known as JDB’s, or Junk-Debt Buyers, buy your debt for pennies on the dollar (this terminology should give you a big hint on what they expect you to pay!).



These companies buy many millions of dollars in debt for a small fraction of their original net worth.



At a maximum of just 0.07c per dollar, these agencies only have to recoup a small percentage of your debt to see a profit. Accounts which are older are sold (and re-sold) for far less. A prominent credit attorney recommends you begin your negotiations at around 20-25% of your original debt.

Finally, we suggest you mail or fax a copy of your offer so the collection agency knows what you’re willing to do. If they reject your initial offer - then wait! Often just waiting a week or two will be enough to get them to change their mind. If you’ve asked them not to call you, be sure to provide an alternate method of getting in touch.



Resist the urge to nudge things along! Looking in any way anxious to settle or otherwise close your debts with a collector is a signal for them to demand full payment. If the collector suspects you’re attempting to make a large purchase (like a home, for instance) you can forget about any discounts!

Remember! A collection mark on your credit report severely damages your credit score. Complete removal of the charge-off and/or collection marks from your credit reports is the ideal scenario, along with payment for a reduced percentage of your debt. Remember to include this stipulation in your settlement offer!

How Will a Collection Affect my Credit Score?

Once this debt has been sold, the way it is reported on your credit report goes from bad (late bill) to worse (collection). Collections are one of the main reasons that a lender will reject you for new credit. In fact, just one collection on your credit report may prevent you from being approved for a new home!

Collections may be listed on your credit reports as either a...

• unpaid collection
• paid collection
• collection - paid or settled for less

Any type of collection is severly debilitating to your credit history. We encourage you to make it priority to begin disputing any questionable negative item.



Below is an image of what a collection looks like on a credit report. This balance on this particular collection item is already inflated from $16,409 to $21,438 from the interest and fees.

Credit bureaus list negative information such as: (a) the name of the collection agency (b) the balance owed (c) the original collection amount (d) original creditor and (e) the date that the item was sent to collections.

The bottom line is that a collection like the one in the picture above can single handedly destroy an otherwise good credit rating!



To delete collections and other bad credit, you may consider hiring an affordable credit repair attorney such as The Lexington Law Firm (73,827 Collections deleted from July - September 2008).

Help for your credit report judgment may be a simple phone call away!. A credit specialist is available by dialing:

1-888-585-3999

(free case analysis provided by The Lexington Law Firm)

"Lexington Law Removed my Collections & Raised my Credit Score From 530 to 707!"

I just want to share with you my story about how my credit situation. If you
are someone struggling with bad credit, then I was walking in your exact same shoes...

And today - if you look behind me - this is the house that I bought.

So, obviously my credit situation has changed.

Basically, while I was
in college I ran up my credit cards and acquired a lot of unmanageable debt which destroyed
my credit rating.

About a-year-and-a-half ago when I went to try to buy a house, the banks
laughed at me and made me feel bad about what happened in college.

I knew that I had to fix my credit, but didn't know how to do it
myself so I went to Lexington Law.

Now, literally within several months, I was able to purchase a $300,000 new home without any trouble at all obtaining a mortgage.

So instead of going into banks with bad credit and being looked at
as a scumbag, the banks were more than willing to help.

In fact, when I applied for my mortgage and the banker ran my credit, he came back and was saying...

"Wow! Sure thing sir. We'd love to help you out."

Lexington Law literally changed my life.

I went from being the person who has bad credit to being the person
who is living in what I consider my dream home at age 29.

Some examples of the things that were on my report that are now gone were:

sorts of

charge offs, collections, and I even had judgments listed against me (which I heard is one of the worst things you can have on your credit.)

I had basically every kind of negative listing shy of a bankruptcy.

Lexington Law has raised my credit score at least 237 points.



I just checked my which is now a 737. When I started with Lexington Law, it was below 500!"

I encourage anyone struggling with bad credit to pick up the phone and give Lexington Law a call.

It was super-encouraging to see my credit score improve each month as the negative items were deleted from my credit reports. I thought some of the bad credit was permanent since creditors misled me into believing that delinquent information would stay on my credit report for the next seven years.

However, through their dispute process and "goodwill interventions," Lexington Law proved it is possible to remove any questionable negative item. (it is the same as pleading 'not guilty' in a court of law).

Additionally, the paralegal assigned to my case showed me other credit rebuilding techniques such as:

• How to add up to three years of positive payment history to your credit with your regular phone or utility bills (these are things I pay each month anyway so it was a real "no-brainer)
  
  
  
• How boost your credit score by optimizing your 'Utilization Ratio' - this involves transferring balances and there is a Right Way and Wrong Way to do this
  
  
  
• How Lexington Law can erase your damaging credit inquiries (applying for credit puts a small "ding" on your credit. Inquiry Investigation helps you remove these "dings")

Deleting the negative credit items like charge offs and the credit card judgment, combined with the credit rebuilding techniques, rapidly improved my credit score. In fact, in month two my score went up 74 points!

After living with bad credit for so long, it was really encouraging to see that I was making progress in the right direction.

Not only did the attorneys at Lexington Law show me results, they also provided excellent customer service along the way. If you are someone who enjoys that "personal touch", then you may like how Lexington Law assigns a paralegal to your case.

My paralegal (Stephanie) was always available to discuss the status of my case over the phone and email. Even though I didn't expect or ask for it, my attorney would also periodically give me a call to check in.

Here are some strategies Lexington Law used to delete the really stubborn bad credit - such as the credit card judgment:

• Unlimited dispute & delete
• Goodwill interventions
• Escalated information requests
• Debt validation
• Inquiry assist

You can also access you case online anytime you like. (I enjoyed logging in just to see all the deletions!)

If you are struggling with a bad credit score because of negative credit items, then I truly hope that you start repairing your credit today. I know how humiliating bad credit is and I know how easy it is just to 'sweep it under the rug' and pretend it will go away on its own.

I realize that your situation is probably a little different than mine, however, Lexington Law has already deleted questionable charge offs, a credit card judgment, late payments, collection items, and inquiries from my credit report and raised my credit score to a 737!

Here is a shot of my credit score online last month:

To get starting repairing your credit, call Lexington Law today direct at:

1-888-585-3999 (toll-free)

www.LexingtonLaw.com

Or, Click Here if you prefer to receive a call from a Lexington Law paralegal