do law firms settle?

Question

Hopefully someone can help me out. I have an old (about 5 years old) credit card debt of $4309.00 which I am trying to settle for $2500. In April the account went to a collection agency who offered to settle for $2200. At that time I was in financial hardship and (divorce, single mom, unemployment, overextended) I did not have the money and could not accept. Now the account has went to a law firm. I called them and asked them to settle - they seem more interested in finding out how much money I make and my job than trying to settle. Of course I got upset and told them I would I would call the credit card company and they said the credit card company would refer me back to them. Shouldn't they (the law firm) be working with me to try and settle this debt? What should I do? I also told them them that I would like my credit reported as "paid" after I gave them the money - they said they had nothing to do with the credit bureau. Help!!!

Answer 1

I agree you need to find out what the statute of limitations (SOL) is for your state. (if you are having problems locating the correct SOL, list your state and I'll check back from time to time and tell you what it is for your state)

How you handle them depends on if you are still within SOL or out of it.

Basically, there are two types of collecting SOL's. One starts from the last time you became 30 days late and never brought the account current. The other is a "last action" SOL. It starts from the last time you either made a charge or a payment.
Which SOL time you would go by depends on your states statutes.

If you are out of SOL, you are not legally bound to pay.

If you are out of SOL, I would suggest sending the collection agency a debt validation letter (cc the law firm) and send everything certified mail return receipt - paper trail.

After you receive a response, or 35 days after the collection agency signed for the letter (which ever comes first) send a SOL letter. It will basically tell them that the debt is no longer legally collectable (and to go away).

If you are still within SOL and will be for quite some time, I would still recommend sending the collection agency (and lawyer) the debt validation letter. (keep them busy and also give them rope to hang themselves with should they try to sue)

You can then send the original creditor a letter asking them to recall the debt from the collection agency and let you settle directly with them. Though I don't know if they will if the collection agency was not assigned the debt but had purchased it.

Also, you should request total deletion, not ask for it to report as paid. Having a paid negative is just as bad as having an unpaid negative on your reports.

You might also check out the site I've listed. Do some reading in the newbie forum and then in the credit forum.

There are others on that site are or have gone through what you are going through. There is a great deal of info on there that can help you.
Everything on that site is free to read and use. And there is a lot of people on there that would be happy to try and answer any questions you may have.


+++++++++++++++++++
oleurud - where in the world do you get your info from? If you claim that some of the advice is off base - you have managed to find a way to be totally out of the ballpark.

First off, they already "have" the OP's credit report and KNOW what is or is not on it.

Second, it is quite possible that the OP is out of the SOL for collections on the debt.

Third, if the OP speaks to them instead of dealing with this by mail, she may inadvertantly say something she will regret later on.

Fourth, since the collection agency and law firm has her credit report, and also knows the bankruptcy laws, they will probably know that it is a bluff or lie or whatever you would want to call it. If that would be the case, that could push them into filing right then and there.

Fifth, paying a collection agency or their lawyer should "never" be done by personal check!!! It should be done by cashiers check or money order!!!!! Paying by personal check may result in the OP suddenly finding her bank account frozen.

Sixth: Never, ever, ever make a deal to pay that debt without FIRST having it "in writing" that they will "DELETE" any and all tradelines on the credit reports. Waiting until after they are paid gives them the upper hand and the chances of having it deleted are slim to none.


Extra information:

Did I mention that the OP may be out of the legal SOL for collecting???

Answer 2

Having a collection agency/law firm report your debt is paid is just as bad as being unpaid. I know this may sound crazy, but it's true. Creditors still look and see that it went to a collection/law firm and that looks very bad.

Plus, if you pay now, I promise that it will show on your credit for another 7 years.

Next, the best thing to do is dispute. Credit card companies rarely keep info on customers past 3-5 years. It's too expensive for them. They have to hire an outside database to keep the information. That's why the law firm said that you would be referred back to them is because the credit card company has no info on you. Chances are the law firm doesn't have much more.

Do not call this law firm anymore. You are admitting guilt. You need to write to them and have them validate your debt with a few questions. You should also request to see the contract that you signed all those years ago. This may not even be your debt, and if it is, it is up to them to prove it not you.

If you need help writing to them, contact me.

If for some reason you should decide to settle, send a cashier's check that you purchase from a different bank. Do not send a personal check or even a cashier's check from your bank. If you do, you have given too much info. Do not give them any info about you (where you work, live, phone number, relatives, friends, SSN, DL #, Date of Birth--give them NOTHING).

If nothing else, I would just wait out the remaining 2 years that it will show on my credit report. That's better than having negative credit for 7 more years from the date you pay it.

Answer 3

My thinking is that if this debt is 5 years old, and it's now in the hands of a law firm (assuming they are not lying about their identity) then they are serious about suing you. It's very likely for a debt of $4300.

You need to find out exactly hold old this debt is, and if it's past the statute of limitations. Many states are around 6 years, some are less. See the link below on this.


So playing the "game" that Christian93 suggest is very dangerous. You could end up with a judgement on your hands.

Contact the credit card company. They may send you back to the collection agency, but at least you tried.

As for his comment about the credit bureau....stick to your guns. If he was hired by the collection agency then you need to be negotiating with them and not the attorney.

Answer 4

In today's litigious society, more often than not cases end up being settled before going to court and getting a judgment. Settling means both parties resolve the issues outside of court without a trial.

Typically one offers a payment or award of some sort to the other, possibly less than the initial amount asked. Why do so many people choose to settle their cases instead of leaving their fate in the hands of a jury or judge? Is settling a case more beneficial?
Benefits of Settling a Case

There are many benefits to settlement rather than undergoing a full trial, for instance:

Expense. Trials involve attorneys, expert witnesses, extensive depositions during discovery, travel and time. If a case settles before going to trial, then most of these expenses can be reduced or eliminated
Stress. Settlement may reduce some stress that a trial creates. Sometimes it's hard for people to undergo the process of trial. They fear getting on the witness stand and telling their story to a judge and jury, then cross-examined
Privacy. Details of the case can be kept private when settled. When you take a case to trial, the court documents become a public record and anyone can look at them. When you settle a case, most of the details are kept out of the court documents, and aren't a public record. Many settlement agreements also have confidentiality agreements as part of the settlement, so the case won't be talked about in public
Predictability. A jury decision is very uncertain. A settlement is much more predictable than having to wait for a jury to reach a decision
Time. Many trials can last from 1-3 years, sometimes even longer if there's an appeal. Settlement shortens the time frame
Finality. The losing party can appeal a court (judge or jury) decision, dragging out the process even longer. Settlements can't be appealed and ensure the dispute is over
Flexibility. During trials, there are strict guidelines and rules about what can be said in court (for example, rules of evidence and procedural rules). When you settle a case, there's more flexibility during discussions and how topics are tackled. Furthermore, in a settlement, one party can even ask for an apology, which wouldn't be possible in court
No "Guilty" Verdict. In a trial, there's usually a "guilty" or "not guilty" verdict, but in a settlement the defendant, person or party on the defensive, may not want a record of guilt. Settling a case is a way to pay for a mistake, but not admit wrongdoing

When It Doesn't Make Sense to Settle

Sometimes lawsuits are filed to make an important point that affects society. For cases challenging Constitutional limitations or other rights, settling wouldn't be a good option because it doesn't create precedent and won't affect public policy.

Also, sometimes the settlement terms are so unfair to one side that settling isn't the better option.

Who Decides?

When considering a settlement, lawyers need to examine if the settlement is actually in the client's best interest. Many times, a side offers settlement terms which don't fully compensate the other side's injuries and damages. However, lawyers seeking a quick finality to the case may pressure the client to accept it. The decision whether to settle or not belongs to the client.
Current Affairs: The Outback Settlement

You may have heard some talk of settlements in recent news. Outback Steakhouse has recently agreed to pay $19 million to settle a sex discrimination suit against it.

The US Equal Employment Opportunity Commission (EEOC) brought this suit against the restaurant chain back in 2006. They claimed female workers were denied favorable jobs which prevented them from advancing to profit-sharing management positions.

While refusing to acknowledge any wrongdoing, The Outback justified its settlement decision because the company decided it was better to settle than to spend time and money on litigation. The company also agreed to institute an online application system for managerial positions and hire a human resources executive.

It also agreed to hire a consultant to monitor its compliance with the settlement and report back to the EEOC on how it's doing every six months. The settlement terms offered the women both money and better working conditions.

Settling a case isn't always advantageous for both parties, and it may seem like an easy way out. However, it is an acceptable way to resolve a dispute. ..................Divorce attorney in Rockford IL

Answer 5

Hi Single Mom..........

I have been down the very same road as you. Most of what the other answers told you have been pretty far off base. Here's what you do.

1. Double check that this law firm is on one or all three major credit reporting companies. (Experian-Equifax-Transunion)

2. If it's still on the reports contact law firm. Do not get upset. When humans get upset we say things we regret. Law firms count on this.

3. Tell law firm you are $30,000.00 or more in debt and have 20 creditors hounding you and you have a terrible credit report.

4. Tell law firm your Aunt Rose (a lie of course) from San Francisco is going to lend you X amount of money. If they ask how much Aunt Rose is giving you tell them it's way less then half of what you owe in bad credit.

5. Speak clearly, speak with confidence. Have a plan of exactly what you will say to them. Tell them nothing more then what I told you above and below.

6. They will ask you what you can pay. Tell them 30 cents on the dollar. Remember, 30 cents on the dollar. Not $2000 bucks.....not $2,200.....30 cents on the dollar.

7. They will say they can't accept that amount. After they tell you they cannot accept 30 cents on dollar, say nothing for at least 5-10 seconds. If they say nothing, after 10 secs ask them how much can they accept. They may hem n haw some. They will come back with an offer of 70 cents on the dollar. Maybe somewhat less or more.

8. If they refuse to settle with you, tell them that bankruptcy is your only other option because Aunt Rosy is ONLY giving you X amount of money to settle on X amount of bad credit and you have 20 other creditors to deal with.

9. Speak nice-nice with these people. Very important to make them feel for you, yet all the while you are being firm with your offer.

10. I am almost certain they will settle for 50 cents on the dollar or less. The lowest most go is 40-45 cents on dollar. However, what really matters is how long money has been owed. The shorter the time the more they will want and the longer you owed the less they will take.

11. If they agree to settle, tell them you need a letter with ACCOUNT NUMBER, on law firm LETTERHEAD paper (use the word letterhead when you speak to them) within 30 days stating you are willing to settle for the X cents on the dollar. Make sure it is SIGNED by law firm.

12. After getting letter send a check to them with debt ACCOUNT NUMBER, and PAID IN FULL on your check. DO NOT use a money order for they are hard to track if you should lose receipt and/or have a problem. Use ONLY a checking account. If you don't have a checking account, find someone that does. Very important you have the money to settle when you make this phone call.

13. AFTER they agree to settle and before they send your letter ask nice-nice if they would EXCLUDE the word settled on the account when it comes time to notify credit reporting companies. They may or may not say yes.

Extra information:
Legally the law firm can keep this "paid" bad debt on account from last payment made for 7 years When you contact credit reporting companies tell them it's been paid in full and send copy of check you sent to verify (DO NOT send settlement letter). With any luck they will not include settled on trade line in reports. It may come off report in a couple years. Either way, if you pay on time, every time and pay account in full each month and NEVER use more then 30% of your available credit on a credit card that's reported to credit bureaus it will boast your credit quite well after two years.

Answer 6

The squeaky wheel gets the grease.

Call them and call them and call them. Lawyer time is money. Send them a little (say $500) to show you are serious. Then wait until you send another five hundred, but just keep calling.