What is the next step to take when you try to settle a debt with a collection agency and they do not respond?

Question

I have a phone bill with BellSouth of TN that is in collections with CBCS. The bill is from 2002 and showed up on my credit report in 2005. I sent CBCS a settlement letter offering 25% of what I owed. They did not respond so I sent another letter offering the same a few months later. Again no response. I sent a third and final letter trying to settle and no response. I hunted their # down on the internet and called and they guy was very rude and said "No, were not gonna settle. CBCS does not settle!" Has any one else dealt with these people? Any suggestions? I really want this taken care of and off my credit report before next year because I'm going to puchase a home.

Answer 1

CBCS has purchased this debt. They own it. It will not help to contact the telephone company. The reason they will not settle with you is because this is considered a utility bill. Collection companies, even though they could, will not accept partial payments for old accounts. Occassionally, when the bill is very, very old they will accept a lesser amount. Your's is not terribly old. You could contact a supervisor and offer a larger amount, but I doubt that they will accept anything other than full payment or a payment plan. If you are purchasing a home next year, you need to get this resolved quickly. It can take 12 months for your credit score to get anywhere near normal after something like this. If your FICO score is too low, you'll end up paying a higher interest rate on your mortgage; that'll cost a heck of a lot more than an old phone bill. The paid in full will need to season on your credit report to get this off your back. Don't waste time disputing the debt if the account was in your name, regardless of the circumstances. If it was incorrect, it should have been disputed with the phone company back then, not now with someone who could care less. Be sure to get a paid in full receipt from CBCS. If they don't report it correctly, at least you'll have the receipt to show the underwriter when it was paid. They can manually underwrite your loan and adjust your FICO score appropriately, if needed, when the time comes. It is smart of you to think about this now. Next year is not the time to deal with this issue. Good luck, and happy house hunting.

Answer 2

A creditor has the right to refuse to settle for less than the full amount due, you owe the money. Pay it. Paying the bill in full will not remove the derogatory history from your credit report. It will only reflect it as "paid in full". The derogatory report will continue to impact your credit score although, once it is paid in full, your score will increase each month that there are not new delinquencies. If, for some reason, your non-payment was justified (i.e. a roommate stiffed you on their portion of the bill) you should submit a "consumer letter" to be included as a part of your credit report so that prospective lenders will understand the circumstances. In a borderline decision case sometimes it can make a difference. Underwriters are people too and they understand that sometimes we get into situations through circumstances that may be beyond our control.

You might try asking CBCS to delete their report to the bureaus (all three of them!) in consideration of your payment in full. They may not, but it doesn't hurt to ask.

Answer 3

To begin with, do you actually owe this debt? And where did you ever get the impression that a creditor (especially a collection agency) would accept such a low offer?

If you main goal is to get this off your credit report, here is what you need to do:

Remember that just because you paid off a past due debt, it will still remain on your credit report, and still reflect poorly on your credit score. You need to either get the status changed to "paid as agreed" or deleted completely from you report.

Once the creditor has your money, you will find it extremely difficult to get them to cooperate in cleaning up your report. The only leverage you have over them is your money!

First, try to work directly with BellSouth and see if they will negotiate a settlement with you. Tell them that in exchange for paying off your debt, they must IN WRITING agree to remove all negative information from your report.

If you have to deal the the collection agent, do the same thing. If they tell you they can't do it, they are lying. I've helped people do it all the time. It is legal. They are just being jerks and like playing GOD over your life.

If they won't agree, then it's up to you if you want to trust them. Unless the bill is huge they most likely won't sue you, so the only damage is a bad credit history. The report will disappear in 7 years. but that's not going to help you if you need this cleaned by next year.

But don't offer only 25% unless you can demonstrate that your finances are so bad you couldn't afford it. Most collectors will hang up on you just out of principle.

Answer 4

Stay off of the phone with people. Paper trail, paper trail !!

Have you sent a debt validation letter to the collection agency?
If not, I would suggest that you do. Many people think that when they get a letter from a collection agency that the bill must be theirs, and the amount is the correct amount. That is not always true.

In many (if not all) states, a telephone bill falls under utilities for SOL, you need to check your state statutes since you may be out of SOL or close to it.

If this is the first collection agency to handle the account, they have probably purchased it for around .50 cents on the dollar, and that may be why they are refusing your offer. If it is the second or third collection agency (or junk debt buyer), they have probably paid less.

I would suggest that you send a debt validation, send it certified mail, return reciept. When you recieve the green card back, send a dispute to the credit bureaus. It is a violation if the collection agency verifies before sending you validation.

"If" they do properly validate the debt and you want to pay, you might try sending another pay for delete (PFD) letter. If they are the first collection agency, try for 60% of the "orginal amount". Include in the PFD that you are requesting that they will delete from your reports after payment. That they will not continue to collect. That they will not sell the debt or sell the remainder of the debt. (collection agency's have been know to sell a debt after payment if there is nothing in writing)

If you find that you are out of SOL on the debt, after sending your first debt validation, it's within your rights to send them a SOL letter and tell them to pound sand.

You might want to click on the links I have provided.
The second link is a self help credit repair site which has some fantastic info that will help you in handling your repairing credit.

Answer 5

Always contact the collection service toward the end of the month. They work on commission, at the end of the month you are more likely to get a better settlement becasue they want to reach their quotas. I have a bill that was over 1300, they settled for 300. Not bad, saved me money and its not on my credit.
As far as the company you referred to no I have not dealt with them. Ask to speak to a supervisor then go from there. You were right to try using letters, did you send them certified? Sorry I am sure I did not help much witht his situation but maybe for a later time if this should arise again.

Answer 6

If you owe the money, you should pay it in full. If your goal is to improve your credit, then you must work with the collection agency. If you pay less than the amount owed, the agency can and will leave the account on your credit report showing a $200 original balance, $0 current balance and "settled for less than the full amount" on the trade line. If you pay the account in full, the collection agency may still leave the account on your credit report showing the $0 balance.

While you have a moral obligation to pay the account in full, if the agency is not willing to totally remove the account from your credit report, there isn't a whole lot to be gained by paying them.

Good luck!

Answer 7

CBCS is a major pain in the ... well.. you know what...

You have rights - know them - http://www.ftc.gov/os/statutes/031224fcra.pdf

Sure that's a lot of reading, but it could help you. Also, my suggestion since there are many ways of attacking this problem. Check out creditnet.com and creditboards.com. They have lots of good articles and a forum for discussion.

Your first step however though, before even offering to pay is to have them validate the debt by sending a debt validation letter. Never assume that this is your debt. Make them proove it is your debt. Check out the links above to get more info on what a DV letter is and some direction on where to go with this.

Good Luck!

Answer 8

The collection agency can refuse to set up a payment program; however, most the time if you are making an effort to pay the debt they will not pursue legal actions. In your sister's case I would recommend a medical bankruptcy. It will hurt her credit but no more than $40,000 worth of medical bills that she will most likely not pay off. Note: usually medical collections do not hinder you credit as much as a "regular" collection. In addition, collection agencies usually do not take you to court for medical expenses- It is a scare tactic!

Answer 9

25%.. so if the bill is 100.00, your only gonna pay 25.00. Don't you think you could come up with something a little more tangible. However if the bill is less than 50.00 just pay the 50.00.. Probably what I would do is contact Bellsouth and let them know what you have said. See if there is something you could work out with them. Or contact the credit bureau to dispute the claim. However, since you have sent them letters trying to resolve this matter... they have the evidence.

Answer 10

Send a certifide letter stating to them you would like a letter back from them saying the bill is settled. At least you will have a signature stating they did receive a letter from you. You could try talking to a supervisor and asked them to fax you the settlement payment. I helped my fiance with this. He had an outstanding bill, but the company had been trying to get him for many years until they came up with a better settlement. He received a letter this week. Hope this help.


LC