If you are paying off old collection accounts you need to be cautious when sending in a negotiated balance. A negotiated balance means that you are sending in less than you originally owed per an agreement made with the collection company. In making a negotiated payment to pay off your collection account you run the risk of having a collector come back later and request more money.
Get A Signed Release When Settling A Debt With A Creditor
One old collection agency trick is to say that the money that you sent was applied to the wrong account, or what you sent them wasn’t the full amount. Beware for other methods they might use to try to get money out of you. Remember, the more you pay them the more money they make. To protect yourself, you need to get a signed release for the amount of the uncollected debt owed. See the sample letter below that you can use to give you a record that a debt has been satisfied in full.
Protect Yourself With Your Cancelled Check - A Backup Release
ONe technique of protecting yourself against age old collection company trickery, is to add wording to back of your check. You should write on the back of the check something to that goes like this: “By endorsing this check the debt associated with account # _______ with (Collection Company name) is now satisfied and no additional money is owed.” Make sure that you put the account number on the back of the check.
This technique is another level of protection for you. You do not want the collection company to come back and say that the money was applied to a different account, or that they never got it etc.
If after all the negotiations and agreements to mail letters etc. from the collector and the collector does not live up to their side of the bargain to where they don’t get a signed copy of the check back to you, or their signed release, you will have proof that you satisfied the debt owed if your check is cashed.
The canceled check is now a release. Keep the cancelled check in a safe place once you get it back from your bank. This is evidence that the debt has been paid and you owe nothing additional to the creditor. This will not have the account removed, but keep reading.
Get Letter From Collector To Remove Account From Credit Record
To get the collector to remove their account from your credit report you will need to make that request of them as well. I would also do this in writing. Get them to send you a letter stating the terms of the payment agreement you made with them and then their agreement to remove their account from your credit report.
No one else can remove this account other than the collection company unless they don’t respond to a dispute you file with the credit bureau or after 7 years when it is supposed to come off due to Federal law.
Once they send you a letter, send them your payment certified mail (keep your receipts) so that you get their signature for having received your signed letter and payment. Make sure that you make copies of everything before you send it to them.
If the collector does not take the item off your credit report and they did not send back the signed release to you, you will need to send the credit bureaus a copy of your signed and endorsed check to them as well as a letter stating what happened. You will also want to dispute this account with the bureaus as well.
The information that you send in the cancelled check, your copies of everything should be enough information for the credit bureaus to at least zero the item on your credit report.
If you file a dispute letter challenging the debt once you have paid the account you may even be able to get the debt removed. Chances are the collection company won’t respond as they know that they did not keep their agreement with you and might choose to remain silent to keep you silent. If this is the case, the credit bureaus have 30 days to get a response from the collection company before they have to delete the account from your records. So stick with it until the very end. You may just prevail.
Sample Letter Of A Creditor Release Of An Unpaid Debt
Copy and paste the following letter into a word processing program and complete your personal data. Once complete, review for errors, print, sign, copy and mail. (This sample release is not for use in California.)
- Date: ______________
(Name)
(Address)
Attn: Customer Service
Name(s) on account: ____________________
Account #: _______________________
To Whom It May Concern:
Enclosed is a check for $___________ to pay off the balance of the account noted above. Cashing this check constitutes payment in full and release of the debt.
Regards,
________________________________________
Signature
Name: ____________________
Address: ____________________
____________________
Home phone#: ____________________
Email address: ____________________
The only person who will look out for you is you. Information like this is important if you plan on being an informed consumer. If you are feeling that your rights as a consumer have been compromised you do not have to take it. Do your research and fight back. If you have to contact the FTC or your state's Attorney General. You work hard for your money and your credit. There is no sense in just letting it go.
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