How To Pay A Debt Collector You Don't Know

I have a debt that went into default while I was in school. I was so broke I couldn't even pay a dime, I was begging people for money and had $0 in my account often. So, I never spoke to the collections people when they called. Now I have a job and can make significant payments, and actually don't need any "debt reduction" or "counseling." I can pay the debt now that I am not in school full-time, but I don't know who to trust my payments to or how to get proper documentation.

My original debtor eliminated the debt from their books completely. They no longer hold the debt in any way, according to them. So, I cannot deal with them any longer to make payments. The company they said that they handed it off to is "America/Refer" but I think that is bogus. I cannot find any company by that name. I have recieved letters and phone calls from a company with a completely different name.

How do I know what balance these companies show? How do I know if the people hounding me are not scammers, who do I pay? How do I get proper documentation of the balance and eventually proper documentation of my payments to them and the ultimate paid in full status?

Is there a company that will help me to deal with paying this debt even though I do not actually need help with the money, only with the details of making payments and documentation? Thank you for your help in advance.

Hi Doot-

I am sorry for your tough situation. If I can make a few recommendations:

1) Call back the original creditor and ask them for the phone number and address of the third party collection agency who is handling your account at this time. I work for a debt settlement company and I have to do this for some of my clients and never have had a problem. They will not discuss the account with you as you mentioned, but they should release that information to you.

2) You should send a written debt validation letter to the third party who is currently collecting on your debt. A sample letter would read as follows:

Date

Name and Address

Original Creditor and Account Number

Dear (collector),

I am writing in response to the phone calls/correspondence that I have received from your office in regards to my account. Pursuant to my rights under federal debt collection laws, I am asking you to provide validation of this debt. I want to simply confirm that I have a legal obligation to satisfy this debt with your office.

Sincereley,

Your Name

The collection agency will typically send you a written response to validate the debt. They are required by law to respond within 30 days if the debt is in fact valid.

3) Contact the third party collection agency after you have received their response. Let them know that you wish to satisfy the debt at this time, but would like the terms of the payment in writing before you send them any money. They should be able to send you a written letter stating the date and amount of the payment you plan on sending them (I am assuming you are paying the debt off in full, according to your post).

4) Once you receive this letter, it is safe to make the payment to the third party collection agency. Usually, collection agencies will accept checks, money orders, or set up a check by phone to get the payment. Make sure you request that a "release letter" be sent to your address once they receive the payment that states that the debt has been satisfied and that the agency will report to the credit bureaus as such.

I hope this helps a little, I am sorry nobody has gotten back to you until now!

 

I wanted to add that you can also consider negotiating the balance down yourself since the account has been in collections for some time.

Hi doot,

I am not sure if your situation has been resolved yet but I wanted to add a piece of insight in regards to your question/situation. Make sure the Statute of Limitations for credit card debt has not expired before sending in any payments. The Statute of Limitations for credit card debt is different for each state, but if it has in fact expired then by law the creditor cannot puruse legal action against you to collect the debt. Below is a link where you can get that answer:

http://www.creditcards.com/credit-card-news/credit-card-state-statute-limitations-1282.php

As a result, you would be in a much better position for a settlement and should consider filling out a form on DestroyDebt.Com to get matched up with a qualified provider!

Yes, to sum it up the process I would suggest you follow:

1) Send a debt validation - make sure you actually owe the debt and find out when you last made a payment.  Double-check this what's being reported on your credit.  You can get a free credit report at annualcreditreport.com.  If the debt has been past due more than 7 years and it's still on your credit, send a letter certified to the three credit bureaus (Experian, Transunion and Equifax) demanding it be removed. 

2) If the debt is valid, verify that the statute of limitations hasn't expired yet.  Use the link above provided by Steven to see what the laws are in your state. 

3) If the statute of limitations hasn't expired yet, offer a lump sum of money to settle it yourself.  I'd suggest offering 25-30%.

4) If the collector refuses and is giving you a hard time or asking for more than 45%, submit a form here for a free consultation and consider having a debt settlement company step in to resolve the account for you. 

A standard procedure that debt collectors use prior to contacting debtors by telephone is by sending them written notification stating that the account has been transferred to their office. Were you able to receive that notice from America/Refer?

I understand your hesitation on this matter. You can also try looking them up at the Better Business Bureau (http://www.bbb.org) to see if they have received any complaints from consumers such as yourself. They may also not be permitted to operate in your state, so you can check out your local county or state laws to find out more information on that.