When possible pay the original creditor and bypass the collection agency. If your creditor has ‘assigned’ your defaulted debt over to a collection agency for collection… call the creditor and ask if you can just pay them directly. If they agree to accept payments then pay them and eliminate the third party. See also, How to deal with collection agencies.
Dear Debt Prison,
Here is my situation. We are overdue on a fairly large American Express bill. We owe the money but can’t pay it off right away. We are not disputing the fact that we owe the money.
We have been sent over to a collections agency, NCO Financial Systems. I do not yet know if they have purchased the bad debt or if AMEX has just assigned the case to them. If I call the AMEX number on the back of my card, I get an automated message that I need to talk with NCO Financial.
Of course, NCO Financial wants all of the money and they want to setup a payment plan of something like 30% down and some other payments. None of this has been in writing, just phone conversations.
I was able to talk with someone at AMEX. They said that they could NOT accept any payment plans since NCO was handling the account now but they will still accept any payments that we make to them. So, while they can’t officially agree to any sort of payment plan, they will accept any payments that we send them.
This is interesting! I basically said to AMEX, “Well, if I just keep sending you money, I will eventually payoff my account and I won’t owe anyone any more money, right” “Yes”. I can still login to the AMEX site and see all of my account information.
So I wonder if it’s in our own best interest to just keep stringing along NCO while continuing to make payments to AMEX for the next 6 months until the debt is paid? I am sending NCO a debt validation letter. We know we have to pay AMEX, but I don’t have to pay NCO until they can prove to me that I need to pay THEM, not AMEX. It will probably only take 6 months or less to pay off the debt.
Steve
Debt Prison response…
Good question. Yes NCO has been ‘assigned’ the debt by Amex. I would continue to make scheduled monthly payments to Amex and no longer speak with or have any correspondence with NCO. You owe the money to Amex, and if possible, I would pay them. Have you still been receiving monthly statements from Amex?
I would try and avoid dealing with a third party if at all possible. By ignoring NCO Financial you eliminate the need for a third party and any corresponding paperwork they’ll bring to the table. However, you should keep all correspondence from both NCO Financial and American Express just in case there is a problem on down the road.
NCO Financial may ‘accidently’ place negative strikes on your credit report. If so, you’ll need all paperwork to correct your credit report - if the negative strikes are inaccurate!
Discuss this article and meet new people at Debt Prison Forums.
If you have found this information to be useful, please leave a donation for Barry.
Related Articles
* Will Debt Follow you Abroad?
* Restrictions on Wage Garnishment for Debt Collection.
* The Fair Debt Collection Practices Act
* Reasons not to file Bankruptcy or Settle Your Debts
* Can you go to jail for not paying your debts?
* How to settle your debts on your own
If my creditor sold my debt (which was just recent; the debt is within the SOL period), to a collection attorney service (???), and they are now coming after me to pay the debt in a lump sum payment, can I send a letter to the orginal creditor, certified ofcourse & request paying them instead & making minimal payments instead ? The debt is a year & 1/2 old.
Hey yaz-bri,
Well if the creditor sold (not assigned) the debt to a collection agency, then you can no longer deal with the original creditor. The collection agency now owns the debt. However, this lump sum business is a joke. They always request a lump sum when they first talk with you because they’ll often get the lump sum.
First off, you need to request validation of the debt, read the following:
http://debtprison.net/wordpress/49/sample-debt-validation-letter/
They should validate the debt by sending you a document stating who the original creditor was and the amount of the debt. Anywho, you can continue simply offering the collection agency (or law firm) a monthly payment amount. However, before making any payments to the collection agency I’d do the following:
1. Only commit to a monthly payment amount that I could actually afford now and later.
2. Explain to the collection agency that you need a written agreement with them explaining how much the monthly payment is and the total number of months to be paid so that this debt is paid in full.
Tell them to sign the agreement and fax it to you. After getting a written agreement with this ‘new creditor’ I would begin the repayments.
However, I think you should know that they will lie to you and come up with every excuse under the sun why they cannot give you such a letter. They are lying and simply trying to scare you into a payment.
After watching an MSNBC report about Debt Collection Services and their unruly practices I had to find out more about the Debt Collection Services I was dealing with. I found out that 3 out of the 5 Collection Agencies I am dealing with have poor ratings with the BBB. Poor tactics in collecting debt, not correcting bill errors, not responding to customers inquiries properly, the list went on and on….
During the MSNBC special I was especially shocked to see that one Debt Collection Agency wasn’t even a REAL Debt Collection Agency and the money they received never went to paying the debt–they pocketed the money!
My concern is by paying these Debt Collection Agency’s: how do I know the debt is really being paid? Some debts are over $1000, how do I know when I am done paying the debt is really paid?
Footnote: With all the Debt Collection Agency’s I am dealing with I devised my own payment plan. I merly sent them a note and told them I’d pay $20/bi-weekly. I never called any of these Agency’s or conversed with them at any time. The reason? As with all Debt Collection Agency’s and my experience in the past, they would try to get me to pay the full amount ASAP. Well, if I had that money I would’ve paid the bill. So “no”, I do not talk to these people directly. I just mail payments bi-weekly with a note when the next payment will be sent. So far it is working because all my checks have been cashed. However, I have not received updated bills from some of the Collection agency’s.
FYI: I owe around $2500 total in collection debt.