Pay for Deletion Agreement
A well known fact of collection agencies is that they care so
much about getting paid that they will do almost anything to
collect on the debt. This frequently includes trampling your
rights and violating the Fair Debt Collection Practices Act. One
little known fact is that debt collectors are often willing to
forgive any negative credit reporting as long as they get paid.
What is a pay for deletion agreement?
Many debt collectors are willing to delete your negative
entry with the three main credit bureaus (Equifax, Experian and
TransUnion) if they receive satisfactory payment to resolve the
debt. Satisfactory payment means payment in full of the balance
due, or in many cases, an offer in compromise (also known as
debt settlement agreement) can close the item with a lesser
payment.
What this means is in addition to negotiating a lesser amount
to pay off the debt, you may be able to convince the debt
collector to eliminate any negative information from your credit
reports regarding that account. This can delete the collection
account information, but it will not affect the original
creditor listing which likely would still remain.
If you are considering this approach, then you should seek
enough information on how to follow through with it. Get
qualified legal advice if you need it.
If you are attempting to write your own pay for deletion
agreement, your legal advisor may suggest some of these items to
be considered in your agreement:
- statement indicating that you are disputing the debt (if
you feel you do not owe it)
- an offer to settle the debt for a lesser amount (debt
collectors frequently approve settlements for less than 50%
of the balance)
- a condition that the debt collector remove all negative
information from your credit report with the three main
credit bureaus (Experian, Equifax and TransUnion)
Your legal advisor can help you put together a proposed
agreement to send to your debt collector, as this is only an
informational list. There are other considerations that are
important also, such as avoiding any acknowledgement of owing a
debt.
Credit bureaus hate this practice, as it serves as a way to
artificially change your credit history. Nonetheless, they
depend on debt collectors to report the information. If the debt
collector decides that deleting the negative record is worth
getting a full or partial payment, then they reserve the right
to do so.
See
Articles: Handling Collection Agencies and Old Accounts
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