Wheeling And Dealing: Why Debt Portfolio Buyers Are More Flexible Than Other Financial Institutions

If you have a debt that has gone into collections, the debt has most likely ended up with a debt portfolio company. A debt purchasing business purchases debts from a number of companies, including credit card companies and other collection companies. If you find yourself dealing with a debt that has been sold to a debt buyer, there are some facts and tips that you should take into account before making that call.

The debt was purchased for less

If you had a previous debt with a company that has gone into collections, the accounts are usually sold to a debt buyer. Debt buyers will buy a portfolio of debts, typically for pennies on the dollar. For instance, a $1000 past due credit card debt may have been sold for $50 or less.

Fees are added on to each debt

Ever wondered why the debt has grown out of control? Most collection companies will tack on a large amount of fees, some of them may be legal, while others may skirt debt collection territory in your state. If you want to pay off an old debt bought by an agency, ask for a breakdown of the fees. Make sure the interest and fees that are listed are reasonable.

Portfolio buyers are looking to settle

A large number of the debts that are sold to collection companies are debts that will be difficult to collect. If you are curious about a settlement, make an offer to the company. Many debt portfolio companies will settle for half or less of the original amount that they were asking for. Settling the debt will help your credit score and your ability to use other forms of credit.

They must follow the Fair Debt Collection Practices Act

All debt collection agencies must follow the rules of the Fair Debt Collection Act. Some of these rules include, not making false claims of legal action and not calling after 9pm. The agency also must verify the debt, if asked by the consumer, in order to continue to collect. If this act is violated, the agency could actually owe you money.

Debt collection agencies can be more flexible

Oddly enough, debt portfolio buyers can be flexible about closing out a debt. While a credit card company may be bound by the rules of the company, debt portfolio buyers may be willing to settle for less and report as paid on your credit report. Some will even delete the collection lines after it is paid. Make sure that you make a deal in your favor, and get everything in writing through certified mail to make your collection close out official. To find out more, contact someone like Vion Investments.