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Question By
anbm2222

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5 People Helped
What is the best way to handle accounts in collections?
I am slowly rebuilding my credit and I have 3 accounts in collections and I cant find definite information on the best way to handle them. CreditKarma says it has a low impact on my score. But my credit score in a year has only improved by 45 pts. Most of that is because I took out a secured credit card and my on time payments have reflected there. So should I wait for the debt to fall off (in about 1 year and a half) or set up payments? Also if I set up a monthly payment plans, would these accounts upgrade or will they continue to reflect as in collections until I pay them off in full?

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Helpful to 60 out of 66 people

I have learned that depending on when the collections will fall off your report, it is ok to leave it alone and wait. Althought, if you want to buy a house soon like me, and you collections are getting in the way, this is what I am doing. Pay the bill and request a receipt. Or find a way to have proof of payment. Then submit the receipt and a letter requesting for the debt to be removed to all 3 bureaus. To ensure it gets done, send the letter at the same time each month for 3 months. I've done this and it worked in the past. Good Luck

Reply by
amackey5

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6 People Helped
Helpful to 6 out of 9 people

Who do you send the letter to?

I have 3 collections accounts, that I have been paying on but have recently decided to settle (less than full balance) because my husband and I want to purchase a home. The mortgage guy I spoke with had me under the impression that these 3 accounts are killing my scores, but I've been reading other things about this.

Thanks!

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61 Contributions
171 People Helped

Helpful to 29 out of 39 people

Any collection is going to show as a negative on your report. I am working through the same situation myself. I want to buy a house but I have limited credit history and a low score. I do know it is best to communicate everything in writing verses via phone. There is no paper trail if you negotiate via the phone.  You need to ask for someone with the authority to remove durogitory remarks on your credit first off. Not everyone in a company will have the power to do so. If someone tells you NO they cannot remove a collection or durogatory remark if you agree to pay the balance then ask for a supervisor. Best practice is to send a good will letter and explain your terms to the agency, ie. I will pay off the debt in full in exchange for the removal off my credit report. Most debt is purchased for pennies on the dollar and often times you can even negotiate the amount down too, if you can pay a lump sum. If you can pay through the origional creditor then do so, make sure they agree (in writing to provide you with a copy of reciept of payment or something saying it is paid in full). If you pay the origional creditor the balance make copies of the payment info and send to the three major reporting agencies and they can remove the collection since the debt was paid. I have had luck with disputes that were paid but still showing collections on my report. I removed over 6 last year and all I said was this was paid in full. Transunion took it off no problem. If you are close to a collection dropping off you can let it go. Although I have had several debts sold over and over to different collection agencies when they neared the drop off date, thus creating an all new delinquent account. I have managed to take care of most my issues this way, now the hard part is getting that number back up and taking care of a repo. Best of luck again try doing things via mail or email. If you use mail send things signature required!

Reply by
singram284

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13 People Helped
Helpful to 12 out of 20 people

you wouldn't happen to know how to deal with the ones who sell your debt right before they are supposed to drop off, do you? I have a few accounts that should have dropped off but they keep getting sold to other debt collection companies.  I want these items gone for good but don't know where to start.....any help is much appreciated! thanks =)

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Helpful to 27 out of 34 people

if you have a yr and a half left for them to come off just let them ride out. Once you pay the collection and payment its going to start over and look like a new loan with late payments. Unless u can get a pay for delete from the collection companies.  Remember a collection stays on your report 7 years.  Paying it off couod lower your score

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Reply by
Floridabiker777

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505 People Helped
Helpful to 3 out of 8 people

it will start all over again only if you make payments.  Otherwise it's still going to fall off in 1 1/2 yrs.  Mortgage companies will want all of that paid in full before they give you a loan.  

Reply by
jeanmarie2

4 Contributions
5 People Helped
Helpful to 4 out of 4 people

thats what i think too worst thing i did once was pay off a card i had sitting in collections several years once you make any payment or change it will hit your credit like a anchor & be on there far longer for everyone to see

2 Contributions
25 People Helped

Have them removed!

Helpful to 23 out of 31 people

I used Lexington Law firm for 6 months...my score went from a 560 to 780 once all negative collection were removed off. And believe me, they dropped off!! Dont sit with bad credit! It costs you THOUSANDS in interest every year. Use Lexington Law firm, they are awesome! I bought my first house and got a great interest rate, I've bought 3 brand new vehicles and got good interest rates... and i have credit offers from every possible bank. Blessings!

Reply by
Jaxby27

2 Contributions
5 People Helped
Helpful to 5 out of 7 people

If you dont mind, what was the price you paid though to use this law firm? Only asking because I literally have less then $1000 left to pay on deliquent credit but when I paid off $750 worth of it, my credit score dropped instead of going the other way.

Reply by
coloredbright9

1 Contribution
1 Person Helped
Helpful to 1 out of 5 people

did you pay off what was in collections or did you just get the negative remarks removed from your score. (probably a domb question but Im VERY new to this stuff lol) thanks

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11 Contributions
42 People Helped

Helpful to 8 out of 10 people

Wish I could link a jpeg.

Do not call collections agancy, send a letter with a proof of reciept (think its called that, thepost office will know)

Send debt validation letter

wait 30 days

if debt is valid, try to settle

if not send follow up letter to collections agency

wait 15 days

if agency validates, try to settle

if not send another letter demanding agency removes info in 5 days or you will sue

wait 5 days

if agency removes from your credit report, you are done

if not, file a lawsuit.

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Reply by
kgmckinley

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42 People Helped
Helpful to 9 out of 12 people

you need a paper trail, thus the letters.

do not admit to debt. the debt validation is their job.

if the debt is past the statute of limitations, send a FOAD letter (F-Off and Die)

I had one agency claim I owed over $15K. the alleged debt was 14yrs old (did not show on credit report)

agency sent me a "friendly" reminder letter and that I could pay off the debt with "3 easy payments"

I sent a FOAD letter

they replied with a 1099-C (debt cancellation tax form) which if I recognized it would have totally screwed my tax filing (I would have owed state & fed taxes a rather large sum)

I replied with a letter to the BBB, IRS, my state DA, their state DA and of course CC'ed the agency.

They replied with a "corrected" 1099-C showing debt of $0

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Reply by
kgmckinley

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42 People Helped
Helpful to 9 out of 11 people

Forgot to mention:

The FOAD letter is only for alleged debt that is outside the SOL (statute of limitations, every state varies, check yours)

in your letter to collections, DO NOT SIGN IT! In fact, do not have your handwriting in any form on that letter.

People have been sued by collections and found out in court their signature on documents they have never seen before.

3 Contributions
6 People Helped

Contact, Get in Writing, or wait!!

Helpful to 5 out of 6 people

Get an arrangement or settlement IN WRITING and REVIEW IT before making any payments by first contacting the ORIGINAL creditor first to see if they are willing to work something out, if not then the collection company. Be sure to keep any copies of paperwork for your records.  Also IN WRITING, have them agree to remove the derogatory item once agreed settlement or payment arrangement has been met. If neither will assist you, then wait it out and work on securing your financial furture.  Best wishes!!   

Reply by
Jackhermiz2013

6 Contributions
1 Person Helped
Helpful to 1 out of 1 people

Original creditor will tell you it's too late to settle with them . Only the collection agency will accept a settlement usually percentage gets the deal closed .they want the high amounts to hire attorneys and get judgments to take money from bank accounts . Collections agency should be put out of business this will be the miracle of all debtees . Chase has this way of business $25k credit cArd he just waived it off like donating a few dollars in church on a Sunday afternoon Chase bank thank you 

1 Contribution
11 People Helped

Collections

Helpful to 11 out of 17 people

While you are paying them off, they are going to continue from that time show as a new loan and your time of seven years will still remain from your last payment. So with that being said, you are effecting your credit score negatively and also fighting an up hill battle.

1 Contribution
12 People Helped

Credit Scores

Helpful to 12 out of 19 people

I recently had an account go into collections, when I called to ask if it would be removed from my credit upon payment they said no. Legally they don't have to remove anything unless the information reported is inaccurate. Of course with good communication you could probably work something out and if you do make sure you get it in writing... Good Luck!!

1 Contribution
1 Person Helped

Recent Collections

Helpful to 1 out of 1 people

Hello,

Due to recent expensive car repairs and moving to a more expensive state I now have 3 credit cards that will go into collection within the next 30 days.  I have tried to contact the companies but they won't go a little as I can afford at the moment, I still need a roof over my head after all.  My question is, once they hit collections, what is the best method of getting them off my report quickly.

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Reply by
FICOGrowth

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10 People Helped
Helpful to 1 out of 1 people

Try not to concede here.  Don't see collections as the only way and, liberating.  Call them again, and see if they will work with you.  (If you can reach out to the creditors and work on a schedule of payments in lieu of collections that could go a long way for you.)

Once the accounts go into collections it counts as a derogatory mark; it is better to work out something and explain that you don't want it to go into collections. I have had collections, and it was a complete hassle fighting with these people - even after I paid them!  Often times, the collection accounts get sold to another collector and another, and it creates a mess. 

If you have no options, and the result is collections, then they could remain on your credit file for 7 yrs. You will then have to work with the collections department at the creditor's offices, or worse, a collection agency. Work with them all, but at the very least, try to keep them out of collections or some of them. Good luck.

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4 People Helped

Similar Question

Helpful to 4 out of 5 people

I just found a $60 dollar debt from back in 2008. It will fall off in December of next year. It shows up on my report as negative, of course. It was even cause for Discover to call me for explanation....actually this is how i became aware of it. My question is: will paying this off make a positive affect on my credit score? Thank you in advance for any advice/suggestions in this matter.

Reply by
jeanmarie2

4 Contributions
5 People Helped
Helpful to 1 out of 1 people

DO NOT PAY IT IF YOU DO IT WILL NOT FALL OFF IT WILL BE BACK ON THERE 7 MORE YEARS AND STILL SHOWING AS A BAD DEBT 

LET IT DIE A NATURAL DEATH 

Reply by
Jackhermiz2013

6 Contributions
1 Person Helped

Paying it is a solution you can settle that with $10 dollars . If they will not accept a quick swift settlement just pay their $60 it's a very low amount .

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