How To Pay Debt In Collection
If you want to know how to pay a debt in collection, you can pay a collection agency and improve your credit score. It is vital, however, that you ensure that the debt in collection is legally valid. In addition, you must negotiate with the collection agency prior to submitting a payment lest your credit score not improve.
- Request a debt validation before you pay debt in collection. The Fair Debt Collection Practices Act allows all debtors to request a debt validation from a collection agency. A debt validation request forces the collection agency to provide you with proof that the debt in collection is valid. This helps prevent you from falling victim to collection scams in which fake collection agencies attempt to collect nonexistent debts.
- Compare your state’s statute of limitations for debt in collection to the age of the debt. Your state statute of limitations outlines how long your debts are legally valid. Once the statute of limitations in your state expires, you aren’t legally required to pay a debt in collection-even if you legitimately owe the debt.
- Evaluate your chances of a settlement before you pay a debt in collection. The older the debt is, the less likely it is that a debtor will pay. Thus, you can often negotiate a debt settlement on old debt in collection and pay a collection agency much less than you actually owe.
- Pay a debt in collection only if the creditor agrees to remove derogatory credit information. Unless the company agrees to remove its collection account from your credit report, paying the debt won’t improve your credit score. Refuse to pay the debt in collection until the creditor agrees to remove any negative information it supplied to the credit bureaus.
- Request a copy, in writing, of your agreement to pay the debt in collection and the creditor’s agreement to settle the debt or modify your credit information. Without an agreement in writing, you cannot prove that the debt collector agreed to anything. This could result in you paying a debt settlement in full only to discover that the company refuses to acknowledge the settlement it previously agreed on.
- Pay the debt in collection with a money order. Providing a collection agency with a personal check or permission to debit funds from your checking account gives the company access to your bank account. In the event the collection agency decides to sue you in the future, it won’t have any trouble tracking down your bank accounts in order to garnish them.
The Fair Debt Collection Practices Act