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alycedunlap · Joined: 01 Mar 2010 Posts: 8 3.21 Dollars($)

Good Morning,

I'm new to the forums so I apologize if this has been answered before.

I've read about negotiating a "pay for delete" with a collection agency. If I were to do that, how is that reflected with the original creditor? Do they update it as paid or will it always show as a charge off or transferred to collection?

Thanks!

adonis · Posted: Wed Mar 03, 2010 11:31 pm Post subject:

Hi alycedunlap,

While you sign the "pay for delete" agreement, you actually agree to pay off your debt in full or negotiate to settle your debt with the creditor or the collection agency. In return, your creditor or the collection agency with whom you are dealing with, promises you to erase all the negative information regarding the account from your credit report.

Once your debt is charged off to the collection agency, the creditor won't deal with it. It is your collection agency who will deal with your account. As far as I know, the creditor will report it as charged off but the collection agency may report it as paid in full.

joshuaheckathorn · Posted: Thu Mar 04, 2010 6:44 pm Post subject:

Adonis is right. The original creditor will likely keep reporting a charge-off even if your negotiation with the collection agency is successful.

gmakerley · Posted: Fri Mar 05, 2010 10:50 am Post subject:

under those circumstances, what's the real benefit? down the road, for most borrowers, that original chargeoff is going to stick out like a sore thumb, and the borrower would be burdened with the proof of payment of the collection account that would have to be tied in with that original debt.

given the level of cooperation that collection agencies and original lenders ordinarily render, it would seem that a pay for delete in a case like that would be counter-productive.

what's your experience here, josh? i'm lacking in expertise in this area, but occasionally the queries come.

joshuaheckathorn · Posted: Fri Mar 05, 2010 7:46 pm Post subject:

This situation exemplifies why it's so important to do everything possible to take care of debts with the original creditor (OC) before they are sold or handed off to a collection agency (CA). Once you're dealing with CAs, you will most likely encounter multiple negative marks on your credit reports, and cleaning them all up will take quite a bit more time and effort.

The benefit here is that you at least get rid of one negative entry. That's the first step in the process, since you'll need to deal directly with the CA to pay what you owe. Some consumers are then able to contact the OC and get them to update how they report the account as well. The OC has the right to keep reporting a charge-off because that's exactly what it was for them, but I've seen successful examples here in this forum, at Creditnet and in others.

gmakerley · Posted: Mon Mar 08, 2010 2:51 pm Post subject:

well put, josh. we consumers spend more groaning about the outcomes of our unfortunate circumstances than we do trying to iron out the problems - especially post-payment of the debts. advice such as yours is valuable, particularly for those who haven't figured out that their charged off accounts, are, indeed, a part of their credit record for life in most cases.

gmakerley · Posted: Mon Mar 08, 2010 2:52 pm Post subject:

sorry for the rambling...i got started and didn't pick up on where i was going with that until after i actually hit "submit."

alycedunlap · Joined: 01 Mar 2010 Posts: 8 3.21 Dollars($)

Thanks guys! I appreciate the information. I've been in denial over my credit for years. I fell for one of those debt consolidation scams a few years ago... signed up with them with 3 accounts, 2 credit cards, and a personal loan. I understood they would negotiate lower payments and less interest for me to pay stuff off faster... when I got late notices they assured me that I needed to be a little behind for them to get the better rates... the letters stopped, they kept taking my money each month... I thought it was all good... one day I finally pulled my head out and called them to ask for a statement of who has received how much money and they said that's not how it works..... They keep all the money in an account until they can pay them all off in full... at that point everything had been charged off. I told them to send me my money back.... I got about $800 back after they keep their "fee" of about $3000. So, now I have 3 charge offs and 3 collections. The whole thing just makes me sick. I don't know how I could have been so stupid. So, now that I'm done groaning about my unfortunate circumstances, I'm ready to start cleaning things up.... as much as I can. It's just so overwhelming.

banker0679 · Posted: Tue Mar 09, 2010 3:33 pm Post subject:

It happens a lot. Sorry to hear this has happened to you as this happens a lot.

Credit repair..debt consolidation can be done by the consumer just like most stuff in the finance industry... but you gotta make sure you know what you're doing or it can cost you big.

joshuaheckathorn · Posted: Wed Mar 10, 2010 8:46 am Post subject:

I'm really sorry to hear this happened to you too. Unfortunately, there are a lot of shady characters that love doing business in the debt consolidation/credit repair world.

I know everything can be quite overwhelming when you set out to clean things up on your own, but just stick with it and be patient. You'll make it through!

gmakerley · Posted: Wed Mar 10, 2010 2:02 pm Post subject:

i agree that the best method to clean things up is by yourself, although debt management services is a legitimate and upright firm. i've worked with their affiliate (subsidiary) consumer credit counseling for many years and found them to be most beneficial to their clientele. check out their website at creditcounseling(dot)org and see if they might be worth your further checking into.

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