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
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.
Ever wondered why the debt has grown out of control? Most collection companies will tack on a large amount of
Portfolio buyers are looking to settle
A large number of the debts that
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