settlement on a credit card

[midwestkc]

I've got a credit card that I've fallen behind on. It has gone to collections, and I know that there are options for settlements usually on these. When I asked the lady at the collections company about this, she basically told me that if I did this that it would hurt much worse than a payment in full. She also informed me to ignore the CC bills, and to pay them, as I would not be hit with interest or late charges now dealing with them, even though the CC bills will still show these things. I'm kind of confused...why would she not want to settle and be done with it, etc.? How bad would it look? I have really good credit, with the exception of this CC and another that I recently paid off in full (never been late on a car payment or my mortgage, or anything else, really until these items). Would trying to settle still be in my best interest, or would it be better to make payments to the collections company and pay it in full over the next 6-8 months as opposed to settling on something now?

[SossMan]

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I've got a credit card that I've fallen behind on. It has gone to collections, and I know that there are options for settlements usually on these. When I asked the lady at the collections company about this, she basically told me that if I did this that it would hurt much worse than a payment in full. She also informed me to ignore the CC bills, and to pay them, as I would not be hit with interest or late charges now dealing with them, even though the CC bills will still show these things. I'm kind of confused...why would she not want to settle and be done with it, etc.? How bad would it look? I have really good credit, with the exception of this CC and another that I recently paid off in full (never been late on a car payment or my mortgage, or anything else, really until these items). Would trying to settle still be in my best interest, or would it be better to make payments to the collections company and pay it in full over the next 6-8 months as opposed to settling on something now?

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settling for less than the full balance is really bad for your credit. it's bad enough that it has gone to collections. Whatever you do, my advice would be to make copies of every payment that you make and ask for some sort of written correspondence from the Collection company for each payment. They are notorious for claiming to have not received payment and the will continue to report on your credit if you don't have everything in writing.

Just pay it off in full if you can. Even if it takes you a few months. Don't take the settlement.

[midwestkc]

Ok, thanks. I figured that must be the case if she basically said that she would rather me make small payments and pay in full, as opposed to make one larger lump sum. It's not a horrible amount, just more than I can afford right now. Thanks for your help.

[BradleyT]

First off you should only deal with collection agencies via mail - never talk to them on the phone. They can do all kinds of illegal crap on the phone and get away with it if you aren't recording the conversations. They have to follow fair debt collection laws set forth by congress - http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm (804 - 810 are the important sections). You can send them a letter stating any future contact with you must be in writing and only to notify you of any action they plan on taking.

Questions -
How large is the debt?
When did you last pay on the debt?

[midwestkc]

it's about $8k, not world changing, but still, more than I have.