Legal Question in Credit and Debt Law in Pennsylvania

David,

Since you are out of work, your priority has got to be your living expenses - food, mortgage/rent, keeping your car payments (if any) and medical expenses. While an unpaid cell phone bill will affect your credit, it will have to wait.

The cell phone companies are horrendous to deal with. The problem is that you signed a contract and as long as the contract was in effect you legally are bound to pay the fees, including any early termination fee and possibly a collection fee. You will have to read your contract to see what it says about the costs of collection. $400 sounds a bit excessive to me.

However, cell phone bills are like any other unsecured debt. They can be settled. They will not make a deal with you if you want to do a payment plan of $50 a month or something like that. They will want the whole sum in that case. Don't make that deal.

If you had the funds and could pay in a lump sum, they may be willing to settle for less than the full amount. You never know until you ask. However, as I said, the cell phone bill is not a priority if funds are tight.

If you have at least 50% of the total amount of the bill, contact the debt collector and offer to resolve the debt for at least what you owed plus the termination fee, if any. See what they say. Maybe they will make a counter-offer, to which you can counter. Offer no more than 50% of the debt. If they say no, tell them to eat dirt.

The debt will move on to another debt collector eventually and you can try again. I have learned that sometimes offers get better on the second or third try. Also, debt collectors like to clear their books at the end of the month and at the end of the year, so that is a good time to try. During tax season when people get tax refunds is another good time.

Before you pay out a dime, make sure that you get a settlement letter outlining the terms 0 the amount of debt, the account number, the amount of settlement and that payment of the settlement will reflect that the debt has been paid and that no further money is owed. After payment is made, make sure also that you get a letter stating that your payment was received and that no further money is owed. Keep these letters FOREVER.

If you have most but not all of the money, see if you can pay some money down and the rest over a period of 1-6 added pays,

If you have the funds and don't want to deal with the debt collector, I can help resolve the debt for a reasonable fee. Please contact me at [email protected] if interested.

PS - I call AT&T the "Death Star" (because of their logo which reminds me of the Death Star from Star Wars) for a reason! They are the worst in terms of service. The others are equally bad, There are much cheaper cell providers out there which do not require contracts.