Sunday, August 9, 2009

What is the best way to handle paying off a credit card debt that has gone to a "law firm"

I have heard that I should not even deal with these people, and can still deal directly with the collections agency.



What is the best way to handle paying off a credit card debt that has gone to a %26quot;law firm%26quot;?

I would %26quot;settle in full%26quot; if you have funds available. You%26#039;ll get a better %26quot;deal.%26quot; You can haggle with them. If the debt is $3,000 tell them you%26#039;ll pay $1200 to settle in full...they%26#039;ll say no, $2500, then you come back and say I%26#039;ll give you $1800 to take care of the debt right now and you close the case...that%26#039;s all I can offer. If they say no, you can say, well you won%26#039;t get your money then. You can sue me, but I have no assets so it will be a waste of your time. You can do that either with the collection agency or law firm. Often collection agencies have their own in house %26quot;law firm%26quot; that they use before sending the claim to an outside agency.



What is the best way to handle paying off a credit card debt that has gone to a %26quot;law firm%26quot;?

Careful with the previous answer. If you %26quot;settle%26quot; your debt, it can hurt you for many years, because it shows up on your credit report as a very bad thing. It basically says that you couldn%26#039;t pay your bills in full. Also, you may be able to work directly with the company, but you need to call them ASAP. The law firm may start charging you.



What is the best way to handle paying off a credit card debt that has gone to a %26quot;law firm%26quot;?

First you have to realize that anyone attempting to collect a debt is considered a collection agent. It does not matter if they are a lawyer or not. As such they either have purchased or assigned the debt from the original creditor. So there is no other collection agency you can deal with.



The next thing is how old is the debt. You have to check the Statute of Limitations for your state. The SOL starts from the date of the delinquency and once they are past this they can no longer sue you for the debt. Depending on your state this is anywhere from 2-6 years. After the SOL is the credit reporting time. This is 7 years from the date of the first delinqency(and does not vary by state), once it is past 7 years it can no longer be reported on your credit report. So if you are past the SOL and can wait out the 7 years you can basically ignore it and wait them out.



If it is within the SOL you first need to send a debt validation letter. If this company can not validate the debt they can no longer take any action against you. If they do validate the debt, then you need to work with them. Never talk to them by phone, but instead send a certified letter stating your offer. In the letter state the total amount you will pay, the date(s) of the payments, and that they must remove the collection account from your credit report once paid. Most companies will only accept full payment to remove the collection account, but you can always try to settle for less and see if they return a counter offer.



Only when they send a written agreement to you do you send them any money.



What is the best way to handle paying off a credit card debt that has gone to a %26quot;law firm%26quot;?

If you don%26#039;t have the money to settle and you are backed up into a corner there are options... Go to google.com and type in legalhelpers and good luck!

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