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    Better to go to collections?

    If I keep paying on the CC even though it's not the minium will that keep it from going to collections? Wouldn't it be better to go to collections and deal with them?

    Also, I've read that when you agree to settle that part of the agreement is the company or collections mark the debt as "PAID IN FULL" rather then "SATISFIED". Is this information correct?

    #2
    Originally posted by cbaxter View Post
    If I keep paying on the CC even though it's not the minium will that keep it from going to collections? Wouldn't it be better to go to collections and deal with them?
    It's hard to say without knowing the details. If you continue to pay late/less than the minimum, the credit card company will keep racking up fees and finance charges indefinitely, until they turn the account over to collections. It's up to them when to do that, and they may choose not to if you are paying anything on the account. Once it goes to collections, your account will be closed and fees/charges will no longer accumulate.

    It's probably best to talk with your creditor and try to strike a deal with them where they close your account and freeze the fees, while negotiating a monthly amount you can afford until the account is paid in full. This is the same thing a collection agency would do, but it will look better on your credit report. The benefit to the creditor is that they recoup more money than if they sold your debt off to a collection agency, so they may be willing to make a deal. If they do not agree to a deal, it may be best to stop paying and let it fall into collections where the amount owed will stop growing.

    Make sure you get any deal you agree upon in writing, whether it is with the creditor or collectors.

    Originally posted by cbaxter View Post
    Also, I've read that when you agree to settle that part of the agreement is the company or collections mark the debt as "PAID IN FULL" rather then "SATISFIED". Is this information correct?
    SATISFIED normally means you negotiated to pay a lesser amount. PAID IN FULL means you payed without settling. The latter has a better effect on your credit, thought any collections on your report are a huge negative on your credit score.

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      #3
      The only major benefit to it going to collections is that if you let it be in collections for 6 months, the collection agency will settle for 50 cents on the dollar, but the flip-side is its a big ding on your credit score. Up to you.

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        #4
        If you settle for less than the amount that's exactly what your report will say "settled for less than original amount" I did this with one account however I have not found it to hurt me at all thus far. I would not recommend anyone goto collections. I must admit collections can accept a lower payment if it all you can afford but if at all possible I would do anything in my power to stay away from them. If you do goto collection know your rights as stated in the FTC's Fair Debt Collection practices Act and do NOT let them push you around.
        FTC's FDCPA


        Originally posted by cbaxter View Post
        If I keep paying on the CC even though it's not the minium will that keep it from going to collections? Wouldn't it be better to go to collections and deal with them?

        Also, I've read that when you agree to settle that part of the agreement is the company or collections mark the debt as "PAID IN FULL" rather then "SATISFIED". Is this information correct?

        Comment

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