How to Get Rid of Past Due Debt From Collection Agencies
When it comes to dealing with collection agencies, you should know that you have several options available to you. If the debt isn't legitimate, you can get it completely removed. Even if it is correct, you can negotiate with the collection agency to pay a discounted amount, and that could potentially mean paying pennies on the dollar. You also always have the option of getting onto a reasonable payment plan. If you're worried about the negative impact on your credit score, in some cases, you may even be able to negotiate and have the collection removed from your record completely.
Obtain a copy of your credit report to verify your accounts in collections. It's best to obtain a copy from each of the three credit bureaus as information can vary from one report to another. The three credit bureaus are Experian, TransUnion and Equifax.
Dispute any collection accounts that are over 7 years old, contain inaccuracies, or are not valid debts of yours. You can dispute claims by calling the credit bureau's directly, filling out a dispute form on their websites, or following the instructions included when you obtained the copies of your credit reports. After you submit a dispute, the collection agencies will be required to prove the debt is valid. If they fail to do so, it will be completely removed from your record.
Call the collection agencies to negotiate paid-in-full discounts for your valid debts. If you're willing to pay a lump sum to pay off the debt, collection agents will often offer a discounted amount. It's not uncommon to be offered a deal to pay a lump sum of under 25 to 50 per cent of the original debt, if not less. While negotiating, ask if they will remove the collection from your credit report if you pay it off. Some agencies will agree to this for people who agree to pay off the debt in a lump sum. Make sure to get this agreement in writing before you pay them so you have a record of what they agreed to in case they don't follow through on their end.
Set up payment arrangements to pay any debts you're unable to pay in full. This approach is only recommended as a last resort. Make sure that you can reasonably afford the payments you agree to because if you miss a payment, the collection agency can legally change the date on your credit reports so your seven-year drop-off clock restarts itself and also shows that you are behind again on the same debt. This can make your credit report much worse than it was to begin with. The collection agency can also make the payment agreement null and void because you failed to uphold your end of the bargain. This means you may end up owing more money than what you negotiated.