Legal Question in Credit and Debt Law in North Carolina

NO! NO! NO! You are making a HUGE mistake by paying any money to a collection agency without the benefit of a settlement agreement.

This is not how you resolve debts. Moreover, the collection agency will not remove anything from your credit file. First, if you settle a debt for less than the amount owed, the collection agency or creditor will report that the debt was settled for less than the amount owed. Anything less would not be correct. Depending on the facts, some collection agencies and creditors will agree to remove negative information but usually they require payment of the debt in full. Most will not remove it even if you paid the full sum - instead, your credit file would reflect that the debt was paid in full.

By paying less than the full amount of the debt, you are also running the risk of reviving the statute of limitations if it has expired or extending the statute of limitations. Again, the way to do this is to get a settlement letter before you send in any money. You also have to get the creditor or collector to agree upon a sum. You just cannot dictate terms and pay any amount you feel like and expect the collection agency or creditor to be bound by terms which you write on a check. At worst, the collector or creditor will not accept your payment. More likely they will take your money and happily sell the balance of the debt to somebody else who is not bound by language on a check and you will be liable for the balance.

You can proceed with your plan and run the risk of any bad consequences. Or you can do yourself a favor and hire an attorney to oversee the settlement process for you. The settlement amount ultimately depends on the particular creditor (orginal creditor versus junk debt buyer), the amount owed and the collection agency. It also depends on whether this is pre- or post judgment.

Please let me or another attorney help you before you make a big mistake. I give free email consults, charge $50 for a 30 minute phone consult and can settle your debt for a reasonable fee. I have relationships with many collectors and can make sure that this is done right. Please contact me at [email protected] if interested.

What you propose will not work. Seek legal advice. Rachel's answer was excellent.