How to settle credit card debt with discover site ficoforums.myfico.com
Hello everyone, needing some advice. I received a dunning notice from a collection agency/law firm regarding a charged off Discover card account. It’s around $5k+. From what I’ve read around, Discover is litigation happy and this lawfirm isn’t shy about suing/garnishment.
The account is well within my state’s SOL and only Discover is showing reporting monthly CO my reports far as I can tell.
I don’t have a lot to offer them, maybe $2000 at best.
Has anyone had success settling with Discover for a reasonable amount? If so how did you go about it? I’m worried sending a debt validation letter will make them not want to negotiate as much. Any advice is appreciated!
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09-02-2022 07:52 AM
09-02-2022 07:52 AM
Re: How to negotiate Discover collections account?
In all reality being still inside SOL the most they will typically reduce it by is 25%. You can arrange monthly payments if you cant pay the entire settlement at once. If you know you owe it skip the validation as this might not make them pliable for a settlement. I would make the offer to the CA by phone and if they accept it you want the deal in writing. I would offer 50% to start.
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09-02-2022 08:08 AM
09-02-2022 08:08 AM
Re: How to negotiate Discover collections account?
@gdale6 wrote:
In all reality being still inside SOL the most they will typically reduce it by is 25%. You can arrange monthly payments if you cant pay the entire settlement at once. If you know you owe it skip the validation as this might not make them pliable for a settlement. I would make the offer to the CA by phone and if they accept it you want the deal in writing. I would offer 50% to start.
Thank you for your response! I was thinking the same, the only thing is they seem difficult to reach by phone. But I will try. Hopefully they can do settlement payment plans. Do you have any advice on what I should say to begin negotiating without admission to the debt which could bite me later? I get nervous on the phone and have never negotiated before. I expect them to try and trip me up, ask for employment and banking info etc but I don’t know how to answer them.
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09-03-2022 09:01 AM
09-03-2022 09:01 AM
Re: How to negotiate Discover collections account?
I had a lawsuit from discover for 4k – a law firm came afte me in court i never showed up and never made payments (at that time i didnt care and they weren’t garnishing my wages luckily) a couple years later i got a call saying they are willing to settle the 4k for more than half the amount – i immeditaely agreed paid my debt for way less than i owed and got the collection deleted from my credit reports . fast foward a year later and im already back in with discover
my advice – dont be afraid to ask for a settlement offer with the law firm thats contacting you
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How to Pay Off Debt in Collections
If you have an unpaid bill that’s overdue by several months to your creditor (for example, your credit card bill), they may move the outstanding debt to an in-house collections team or a third-party debt collector (a separate organization that your creditor works with to try to get you to pay an outstanding balance). This means your debt is now “in collections.”
Having a debt in collections can be a difficult time for anybody, but it’s important to remember that you still have protections, and there are many ways to pay off a debt in collections. Depending on how much debt you have and the types of debt, some options may work better than others. Here are some things to keep in mind if you’re wondering how to pay off debt in collections:
You’re entitled to information about the debt
Debt collection practices can be aggressive. But when a third-party debt collector contacts you about your debt, there are rules and regulations they have to abide by, according to the Consumer Financial Protection Bureau (CFPB).
First, they’ll have to tell you the original creditor that turned the account over to them and the amount owed, either in their initial conversation with you or in writing within five days of contacting you. If you don’t recognize the creditor, submit a written request to the third-party collector within 30 days, asking them to provide the name and contact information of the original and current creditor.
When you request information about your creditor, the third-party debt collection agency must cease efforts to collect the unpaid bill in your name until they’ve given you this information. This is true of a creditor as well. Remember, always keep a copy of your letter for your records.
You can dispute a debt on a credit report
The Fair Credit Reporting Act (FCRA) gives you the right to dispute any reported debt. It’s best to do so by registered mail and be sure to send it certified so you can get a notice of receipt.
You can submit your dispute online, but registered mail gives you a paper trail if you need to refer to it. Under federal law, credit bureaus must investigate disputes to be compliant. You can also dispute the debt directly with the creditor, which must investigate and respond to your dispute.
There are also other options to help with credit card debt relief. If you have credit card debt on multiple cards, you could see if you qualify for a balance transfer credit card to consolidate your debts to a new credit card account with a lower interest rate. You should compare offers to find the best credit cards for a balance transfer.
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There are limits to how and when you can be contacted about a debt in collections
The Fair Debt Collections Practice Act (FDCPA) states that creditors or debt collection agencies may contact you. Creditors and third-party collectors may use U.S. mail, phone, text messages, or email to contact you.
A few things creditors are legally prohibited to do when they contact you:
- Call you before 8 a.m. or after 9 p.m. (in your time zone).
- Contact you at work if you tell them not to
- Contact you at work if they know that your employer does not allow such calls
- Send postcards
- Publicly announce that you have an account in collections
In addition, under the CFPB’s Debt Collection Rule:
- Debt collectors can’t call you more than seven times within a seven-day period
- Debt collectors can’t call you within seven days after engaging in a phone conversation with you about a particular debt
You can tell a creditor or third-party collector not to contact you
You can write a letter to your creditor or collection agency saying they must cease further contact. Creditors must honor your request once they receive your letter, but the FDCPA does allow them to contact you with specific communication about your collection account (like notification of legal action).
You may be able to negotiate to pay off the debt
A creditor may agree to a debt settlement and accept less than the total amount you owe. It’s best practice to secure a written agreement of any negotiated amount or monthly payment plan you make with a collector before you make a payment. If you have multiple debts in collections, you can specify which account your payment should go to.
Did you know?
There can be tax implications of settling a debt for less than the amount you originally owed, so it’s a good idea to check with a tax professional before filing your taxes.
In addition, settled debt may appear on your credit report and reflect in your credit score.
If you can’t settle your debt for a lower amount, ask about a repayment plan to pay the entire amount owed. A credit counseling service may be able to help you with a debt management plan, or you can try to negotiate directly with the debt collector. This could allow you to pay what you can comfortably afford and allow the creditors to collect fully on what you owe them. Remember to keep a record of all your communications.
Once your debt is paid, make sure your creditor or collections agency reports this to each credit bureau so it no longer appears on your credit report.
Creditors can take legal action
Third-party collectors cannot make empty threats about seizing property or suing you to get you to pay your debt, but your creditors can take legal action to collect from you.
How long a creditor can sue to collect a debt varies by state
States have different statutes of limitations for how long a creditor can sue you to collect debts. Once the statute of limitations expires, a creditor cannot sue you. Note that some creditors or collection agencies may still try to contact you, so you’ll want to be familiar with your local laws.
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