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| *Ostroff, Fair and Company>>>Personal Finance |
Is it better to pay a collection agency in monthly payments or in one lump sum? |
I have just over $3,000 owed to a credit card that went to collections. I was wondering if they are more likely to reduce the amount of debt that you owe, if you agree to pay in one lump sum. I'd also like to negotiate payment for the item to be stricken from my credit report. How likely are they to comply with my request? Definitely, paying it all in one shot will get you the lowest negotiated payoff allowed. They might tell you they can't remove it after paying it off, but they can. The credit card itself though, that payment history will remain. With the stricter bankruptcy laws, collectors are getting tougher about negotiating. 3-5 years ago, it wasn't hard to get balances knocked down to 35%. Now, 50-60% is tough, but doable. Don't even attempt to negotiate unless you have money to pay in full within the next day. Otherwise, they'll just push you around constantly. Source(s): 10 years in mortgage banking if you can pay it off, do it all at one time, but do not accept a "settlement offer" because it will go on your credit report as such and it looks worse than if you continued to make payments or pay the full amount. If you do not want it on your report, you need to pay in full. This will go on your credit :if you tell them that you have $1200 to pay in one lump sum, if they call the total paid off, then one lump sum. if you want to pay over time, you will pay closer to the amount you owe (3000) Whatever you do, DO get everything you agree to in writing and do NOT lose this. do NOT give them electronic access to your bank account(s) as no matter what you agreed to, they will clean them out up to the full (original) amount . It depends on the company, if they will not remove it from your credit the best thing to do is go through a third party credit repair agency. I used Lexington Law Firm, in one year my credit score went from 502 to 698, I of course had more than one account in collection. You ran up the bills, you are responsible for them though, bite the bullet and pay them what you owe them and chalk it up to experience. If you can pay it off in a lump sum you should do it. That way you avoid the collection and interest fees charged by the collection agency. You need to get all your finances in order. For this to have made it to collections you must be having problems. Make out a budget and see how much you can afford to pay them each month. Then get out of debt and don't get back in to it. |
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