When Do We Pay Off Debts That Are In Collections?

When Do We Pay Off Debts That Are In Collections?

Starting off this hour is she’ll be in tennessee merry christmas shelby how can we help today merry christmas day thank you so much for taking my call sure so my husband and i are in the middle of our debt snowball on our active debt he also has a handful of credit collections from about 2014 at 2015 and about a month ago we’ve received in the mail three separate

Letters from some bankruptcy lawyer stating there was a court case against him so i did a little digging to see if it was valid i called the county clerk and she said that the court case was valid but there’s been no activity on it and nothing has been served yet so my predicament in question is should we pause our debt snowball so to speak on our active debt to

Pay this collection or should we take action only if and when something has actually served who was it by and how much was it for i don’t even know the original creditor it’s been passed around so long but it’s in the hands of a law firm right now was it was it a credit card or medical bill what was it do you know i believe it was some sort of personal loan from i

Think they were called the lending club at first and it’s for about $3,000 which is what kind of makes me nervous because that’s going to take us at least three months to pay that full amount and kind of pause everything else we’ve been doing i’m really conflicted about what to do because i don’t know whether we should leave if lending club has a three thousand

Dollar unsecured loan that is five years old they don’t own it anymore they sold it mm-hmm they sold it for probably around six or seven cents on the dollar so they probably paid under two hundred dollars for this okay mm-hmm and so if you were to contact the law firm and offer them a thousand dollars they’ll probably settle it you’ll probably have to argue with

Them listening listen to some whining and troughing around and all that kind of stuff that’s part of a negotiation with any collections and by the way this law firm is no more of a law firm than fly the moon except that they technically have a law office what they are is a widget a factory that prints off lawsuits on small collections in mass mm-hmm okay and they

Probably are not going to do much with this if they ever did actually sue you even when they win then the only way they would get anything is to execute on the judgment and that would take months more on top of it the chances of them spending a thousand dollars in addition to the 800 ition to the 200 they paid for the debt to try to collect the three thousand dollar

Debt that’s five years old is about zero okay so what they do is they throw paper around to try to intimidate people to get them to pay the bill and you need to pay the bill so but your the thousand dollars in your emergency fund baby step one right yes okay if this comes up if it comes to a head call them and offer them the thousand dollars and tell them that’s

All you have because that would by the way be the truth mm-hmm and second settlement in full i can’t give you any more than that i don’t have any more than that you’ll just have to sue us okay and then then then they’ll they will show you and then they would win because you’re the money and then you go back you settle the ludd the judgment later because it’s gonna

Take all of this takes way too long and generally what they do is they play the odds they buy bad debt and they play the odds and they and so they they go in down there where they like if you can imagine going in with two wheelers full of cases of lawsuits and they file them all at once it’s like a factory doing a shipment mm-hmm and then they just hope a few of

Them hit and all they got to do is hit about one in ten and their money comes back mm-hmm and so that’s how it’s a game they took odds they’re playing the odds and debt buyers are real slimy and the law firms that they work with or real slimy by and large there’s a few exceptions but 90% of them are slimy so just deal with it like you’re dealing with slimy people

When they get everything in writing and don’t give them any access to your checking account do not give them any employment information do not give them anything except a cash offer in return for a in writing settlement offer okay then i’ll send you a cashier’s check or a i’ll wire some money or i’ll do a prepaid debit card that you turn on long enough to put

That money in there and then you turn it back off something like that where they do not have access to your job they don’t have access to your current address well we need to verify your information before we can have this conversation well do you want the conversation to end or do you want to get some money because you’re not verifying spit with me because all

The information they get on you is going to help them file a garnishment against your wages or something and don’t give them anything so you got to play hard at all hardball be real cagey wise as serpents harmless as doves and try to get this settled when it comes up but right now it really hasn’t come up yet okay helpful perfect yes that was exactly what i

Needed to know thank you very careful and very wise okay don’t trust anything you hear only trust what you see okay okay thanks for the call open phones a triple eight eight two five five two two five let me help you guys with this because occasionally i get a question about this there are basically three or four types of collectors out there there’s a collector

That calls you on your home mortgage if you have a traditional home mortgage in your behind they will call you from the mortgage company say we want our money they can be believed they don’t have a lot of power but they have a precise system that they have to go through in order for the fha insurance to kick in the va insurance to kick in or the fannie mae pmi to

Kick in okay and so for them to get the coverages in the event of foreclosure that they need they have to go through a very precise procedure and they generally are not going to bluster and create a bunch of emotion and all that kind of stuff so your mortgage collector is probably the top of the heap the best collect out there in terms of telling the truth and

They’re gonna be tough on you they you own money they’re trying to get their money but in terms of telling the truth the bottom of the barrel is a debt buyer that buys it for a nickel on the dollar and they’re working the odds and they’re really really really slimy right above them are the credit card collectors with the national companies like discover and chase

And wells fargo and so on if you get a collections call from a credit card collector in one of those companies be aware you are dealing with some of the worst human beings on the planet their trash they’re slimy and if you don’t like me calling you that and you’re one of those collectors then go get a job you can be proud of because you’re slimy okay and navient

Is just right there just above them they will lie to you and they’re incompetent when it comes to your student loans so you have to be careful your local collection agency in your local town usually pretty good folks but not always so you can’t be sure but some of those are pretty good folks too there’s a gradient than the quality of human you’re dealing with in

These collections processes and just be aware of that if you’re getting behind on your bills because you got to work through this mess

Transcribed from video
When Do We Pay Off Debts That Are In Collections? By The Ramsey Show – Highlights