I owe a school some money. I have the money with which to repay the debt, and would like to do so. I have received mail from both the university and collections in the past regarding this debt.
My question is, who do I pay? I can only afford to pay the debt once, and I’m sure each organization would tell me I ought to give the money to it.
Does anyone else have experience in this kind of thing? I don’t want to pay off the debt and then have one or the other of the interested parties still thinking I owe them the money.
When I send a debt to collections I never wanna hear from the debtor again. If they give me the money owed to me, I then have to notify the collection agency and find out what their cut is, then send it to them. I’d rather let the collection agency do the math and send me my fraction.
My understanding is that once it’s gone to collections, you don’t owe the original organization the money anymore–the collections agency bought the loan from them.
However if I were you I’d call billing at the original organization and get clarification from them–and maybe push for paying them directly if you can because the collections agency will tack on fees etc.
Make sure you get proof in writing that whoever you pay is the current legal owner of the debt.
It sometimes happens that debts are resold many times over, and there are fraudulent collections agents who will resell the same debt to many others, all of whom will try to collect on it.
Right, you owe money to the school. You have no relationship with the debt collector. You don’t know they own the debt, or that paying them will erase your debt with the school. In my experience, they can never establish these things. I’d contact the school and make arrangements to pay. If they tell you (in writing) to pay the debt collector, then you’re good to go.
So does a debt collector buys the debt at less than face value from the original creditor? If so, can you get them to take less than face value on the debt they purchased?
There are many different set-ups. I send a couple of people to collections each year. The company I use sends me a percentage of whatever they collect, with that percentage decreasing with the age of the debt.
Depends on the age of the debt at the time it is collected. My business currently does no billing, so if services are rendered and payment isn’t made it gets sent immediately. I think I get 80% if it is collected immediately. That drops rapidly to 60% then 40% over the course of ?a few months.
I’ve had people pay a debt that was many years old (people often do this when applying for a mortgage) and I’ve received 10% of the original debt.
So they just call you up and be like, “I feel terrible for stiffing you. Here’s 10% of what I owed you. BTW, can I have a letter for the credit company to say we’re square?”
Once I assign them a debt, part of my written agreement with them is that I will not collect it directly from the original debtor. They have to pay the collections company. The collections company pays me a variable rate; usually they keep 30-40%. I’d have to re-read the fine print to know exactly what the full range is.
If someone offers the collection company less than the full value of the debt, they need my approval to cancel the rest. Otherwise, they will accept partial payments, but will continue asking for the balance until it is paid. I guess I’m a hard-ass, but if you need to clear your credit to buy a house, that’s all the more reason I should be paid in full. I sometimes write off interest or finance charges, though.
Anyway, the OP should definitely make sure the collections agency is authorized. If there’s a judgment entered, that is basically public information and so it is possible for someone to find out and scam you on it. Scammers are often very happy to offer you deals - “Pay us just 10%, but it has to be by the end of the week!”
I sometimes see ads on TV that say that “Such-and-Such Debt Company” has helped someone settle a debt for a fraction of what they originally owed… is it possible that this can be done, or are these companies conning folks?
It can be both. It costs money to collect debts and businesses will settle to get the debts off their books. However I have seen reports that many of these companies don’t deliver anything and some of them have taken people’s money meant to pay off debts and kept it.
Depending on the age of the debt, you may have no legal need to pay.
Ethically is another matter.
I’d make sure your credit report is appropriately updated after you pay, and that if it’s an old debt, payment doesn’t make it show up on the credit report!
as far as I’m concerned, debt collections agencies can all die in a fire. ~10 years ago, shortly after I moved and got a new phone number (land line) I started getting harassed by a debt collection agency asking for someone who was not me (and didn’t know.) This went on for a while because obviously I was lying just to cover this person’s ass.
Debt collectors and the people who work for them are truly the most vile, rotten scum of the earth.