How do I pay off deliquent accounts on my credit report?

I found something on my credit report for an old phone bill. It is with the collection agency AAC. How do I find this company to settle my debt?

How do I pay off deliquent accounts on my credit report?
Do NOT pay them off unless you get a written agreement from the collection agency AND the phone company that they will remove the delinquency from all three of your credit reports.





The collection agencies will gladly take your money. However, the phone company has already written off the loss as noncollectable and won't remove the credit blemish.
Reply:Your FIRST step is always to send a letter via registered mail with return receipt to all three credit bureaus requesting validation of this debt, per your rights under the Fair Credit Reporting Act.





Simply state in the letters:


I am requesting validation of this alleged debt per the Fair Credit Reporting Act.





Per federal law they must attempt to validate the debt. If they can't they must pull it off your report.





If it comes back validated and you want to pay it off....get the terms IN WRITING prior to giving any collection agency one penny. NEVER pay a collection agency by electronic check...they might raid your checking account. Pay only by USPS money order.
Reply:1. Do you actually owe the debt?


2. How old is the debt?


3. Is there any proof of the debt?


4. Use the internet to locate AAC.
Reply:do not pay the collection company ever, pay the phone company.
Reply:I agree with posters 1,3 %26amp; 4.





Most consumers hit the panic button over notifications from collection agencies:


1. Many consumers are unaware of their risks with unpaid debts. Yes, it's true that a creditor could sue you in court and win a judgment, allowing the creditor to garnish your wages or hire a sheriff to come get your property. However, the chances of this are small. It is simply too much time and expense for them to take action against you. We don't want to lie to you, the possibility does exist, but the chances are small. And if they do take you to court, often they have no case. There are an incredible amount of new players out there, the Junk Debt Buyers. These guys buy and sell debts and place them into million dollar packages which sell on Wall Street, much like the seondary mortgage market.





2. Too many consumers feel that their debts are overwhelming and there is nothing they can do other than file a bankruptcy. Consumers believe those awful tales spun by collection agencies of impending doom, especially about garnishment and seizure of property. Collection agents fail to mention (surprise!) that in order for these actions to take place, the creditor must first go to court. So, due to lack of information, many consumers turn prematurely to bankruptcy. Please don't do this! Bankruptcy should not be used until after all options are exhausted, including the settlement procedures we are going to talk about here. In addition to getting out of your debts by settling, see our other alternatives to filing a bankruptcy.





Have you tried debt validation?


The best way to deal with a collection agency is the debt validation method. This should be your first step in the settlement process.





Before you attempt to settle a debt, check the statute of limitations


Collectors only have a certain amount of time to sue you for payments. The first thing you should do is determine if the statute of limitations for collecting a debt in your state have past. If the debt is older than the statute of limitations, tell the bill collectors they are wasting their time by harassing you for an uncollectable debt, as the original creditor or the assigned collection agency cannot take you to court to get a judgement. To see the time limitations on the different kinds of debt, check here.





After 7 seven years (in most cases), a negative mark and the related collections will disappear from your credit report. If the debt has gone unpaid for 7 years, then it can no longer legally remain on your credit report. You can challenge this listing on your credit report and it will come off. Please note: the amount of time a late payment can appear on your credit report has nothing to do with the statute of limitations. Very important distinction. Even though a debt may no longer legally appear on your credit report after 7 years, you could still be sued for the debt if the statute of limitations for your debt in your state is not up. To see how long a negative item remains on your report, click here.





If the debt is gone from your credit report AND the statute of limitations is up on this debt, you're home free! If enough time has passed for both the legal debt collection statutes of limitations and the credit report limitations has passed, don't worry about the debt! If your debt meets both of these conditions, it is uncollectable and it cannot appear on your credit report! If you get to this point, stop here, you are done!








My debts are not past the statute of limitations, I don't want to go through debt validation, and I need to settle them.


If you cannot wait for statutes of limitation to pass on a debt, and you don't feel like messing with the debt validation procedure, you may consider trying to settle your debts yourself with a collection agency.





Before we start, lets get some terms straight here. A collection agency is any agency which collects a debt on behalf of another company. Under these terms and federal law, this includes:





Companies who purchase the debt (also known as junk debt buyers - JDBs)


Companies who has been assigned to collect the debt


Lawyers who send you letters to collect a debt (so don't panic!)





Debts Which are Good Candidates For Settlement


There are two basic categories of debt, for the purpose of this article: secured and unsecured.





Unsecured debts include:





medical bills


credit cards


department store cards


personal loans


student loans


bounced checks


Secured debts include:





home


auto


With a secured debt, a piece of real property (such as an automobile or a home) is promised if the debtor can't finish making payments, or defaults, on the loan. You will not be able to settle these debts, as the creditor will simply accept the promised property as the "settlement." As a matter of fact, with a home or auto loan, you most likely won't be reading this information - your property will have bee just repossessed.





With unsecured debts, there is nothing "attached" to the loan promised as repayment. Unsecured loans are typically given to people with good credit, due solely to the fact that they have good credit. These are the type of debts that a creditor is willing to settle, as they have no way to guarantee they will receive anything from you.





You have the natural advantage in debt settlement, because you have something the creditor wants. Don't cave in when they first tell you no. Maintain calm. Don't lose it and get angry. It's usually best to correspond with them via letters, so you have a paper trail of all your actions. Keep the attitude at all times that the collection agency will take less money then they say they will.





How much to offer


To give you some background, most bad debt companies pay or receive literally pennies on the dollar for the debts on which they are trying to collect. The amount that companies pay for bad debt depends on the type of account and its age: *








Debts that have recently been charged off: 6 to 7 cents on the dollar.


Accounts that are slightly older and on which a collection agency or two has already taken a whack: 1.5 cents to 2 cents on the dollar.


Years-old, out-of-statute debts: A penny or less.





* Source: Sean McVity, portfolio broker at Keefe, Bruyette %26amp; Woods.





With this in mind, you should always start your offer at 25% or less. Let's understand the math here. If your debt is $1000, let's say at the most, the collection agencies has paid or will collect 7 cents on the dollar, or $70. If you offer them $250 (25%), they are still making a profit of $180. Remember, the credit card companies are out of the picture at this point. This money goes directly to the collection agencies.





Other things to remember in negotiation:


NEVER talk to a collection agency on the phone. Period.





Get your terms in writing before you even open your checkbook. Here is a sample of an agreement requesting the reduction of your debt amount. Never expect a creditor to meet an agreement that was made verbally. Everything must be in writing and, even then, you will probably have to fight to make the creditor live up to his end of the bargain.





Keep good records. This can be the difference between a good and bad settlement. Don't expect them to remember you or what you agreed upon.





Send all correspondence via registered mail, receipt requested(about $3-$4 a letter).





Keep a copy of every letter you send.





If you call (and why are you calling?), keep a log of when you spoke to the agencies, and who you spoke with. Ask for the name of the supervisor of the person you spoke to, as the turnover rate at collections agencies is high.





Follow up all phone correspondence (again, why are you calling?) with a letter (registered, of course).





Penalties and extra interest are typically fictious amounts of money added on by the collection agency to pad their profits. I've seen as much as to 50% of the debt or more claimed to be owed by a collection agency consisting of interest and fees. Example: Recently, I talked to a guy who had his $5000 original debts balloon up to $11,000 in less than 3 years. This is illegal, every state has usery laws (which dictate the maximum interests allowed to be charged.) If you consider the junk debt buyer paid 7 cents on the dollar or less, there is no way there is this much interest. Most companies would be thrilled to get you to pay the original debt even without the extra penalties they add on and will usually be more than agreeable in waiving these fees.





Time is on your side. As time passes, the creditors will likely stop calling and the debt will be filed away for future attention. The longer the debt remains uncollected, the better your chances will be of getting a good settlement. Eventually, the creditor will consider the bad debt a loss in order to receive a corporate tax write-off. This does not necessarily mean that they won't pursue you for the debt. The corporation may then collect on the debt themselves, sell or assign the debt to a collection agency, press for a judgment and garnishment, or temporarily ignore the debt. The course of action chosen by the creditor will vary widely between corporations and debts.





Never look too eager to settle. Take plenty of time to reach an agreement. Never let it slip that you need to settle the debt because you're buying a home, car or anything else. If, for example, you tell a creditor that you really need to get this debt settled to get into your dream home, you can forget any kind of settlement. The creditor will insist on the full balance. Don't accept the first, or even second, settlement offer. Make sure that they are the ones calling you to push the deal forward. You cannot expect to reach an affordable settlement if the creditor thinks he has the upper hand.





Taken from: http://www.creditinfocenter.com/debt/set...