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Are Debt Collectors Better to deal with than the first hand person?

Started by roadman65, October 12, 2017, 04:40:47 PM

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roadman65

I heard some people tell me that if you let any money you owe to a hospital, credit card company, bank, etc. that if you fall behind over the 90 day period when it gets handed over to the collections agencies, that it might be better for you the borrower.   

I was told by my insurance agent that debt collectors will negotiate with you over the banks and hospitals who don't like to deal.  Then of course if anyone called the National Debt Relief to help lower your debt the first thing they do is explain that you the person who owes the debt needs to not make his payments for three whole months as they claim their bargaining people have evidence to prove to your lender that you are in financial trouble and get you a lower rate till the end even with the NDR heft fee.

I am wondering if the NDR is doing that so your account goes into collections and therefore their people have some sort of deal with the collections companies to pay a lower interstate to, as they originally got your debt from the people you owe pennies on the dollar!  In other words the banks and the hospital take a loss on you when you fail to pay them, and most likely take the write off from Uncle Sam and the Collections Agents make money themselves on lower interests.

Is this true.  Is it better to let large debts fall into the hands of collections or to pay off the first party first?
Every day is a winding road, you just got to get used to it.

Sheryl Crowe


Rothman

Please note: All comments here represent my own personal opinion and do not reflect the official position(s) of NYSDOT.

hotdogPi

Quote from: Rothman on October 12, 2017, 06:35:45 PM
Somebody doesn't care about their FICO score.

That would be me. Except for those at or near the bottom, it's mostly meaningless, so I have no reason to care about it. Someone with the median score and someone with the maximum score are treated almost identically.
Clinched, minus I-93 (I'm missing a few miles and my file is incorrect)

Traveled, plus US 13, 44, and 50, and several state routes

I will be in Burlington VT for the eclipse.

US71

Quote from: roadman65 on October 12, 2017, 04:40:47 PM
I heard some people tell me that if you let any money you owe to a hospital, credit card company, bank, etc. that if you fall behind over the 90 day period when it gets handed over to the collections agencies, that it might be better for you the borrower.   

I was told by my insurance agent that debt collectors will negotiate with you over the banks and hospitals who don't like to deal.  Then of course if anyone called the National Debt Relief to help lower your debt the first thing they do is explain that you the person who owes the debt needs to not make his payments for three whole months as they claim their bargaining people have evidence to prove to your lender that you are in financial trouble and get you a lower rate till the end even with the NDR heft fee.

I am wondering if the NDR is doing that so your account goes into collections and therefore their people have some sort of deal with the collections companies to pay a lower interstate to, as they originally got your debt from the people you owe pennies on the dollar!  In other words the banks and the hospital take a loss on you when you fail to pay them, and most likely take the write off from Uncle Sam and the Collections Agents make money themselves on lower interests.

Is this true.  Is it better to let large debts fall into the hands of collections or to pay off the first party first?

It's best to negotiate with the original creditor. They may sell you to the collection agency for 50 cents on the dollar, but  the agency makes their money when you pay them everything you owe.
Like Alice I Try To Believe Three Impossible Things Before Breakfast

roadman65

I don't have it where I am that bad off. But, since my mom passed away she owed some money, and right now getting life insurance to kick in is a waiting period.  FYI, you may have great insurance to cover burials and debts, but the timing of payment Alex Tribeck won't tell you.  Funeral homes don't give time, as they want you to pay them up front and the debt collectors don't care if one is dead or alive, but want that money regardless.

So we are paying them as we go along.  If it goes to debt collections we will pay them as my mom's FICO score does not matter anyway.

For me I often wondered as I heard conflicting stories about the right way to settle a debt.
Every day is a winding road, you just got to get used to it.

Sheryl Crowe

briantroutman

First of all, I realize that might not mean much from a stranger on a highway-related discussion forum, but let me offer my condolences on the loss of your mother.

I think it's important to figure out whether you actually owe the money or not. If the debt is something that you signed for (such as the funeral), you may be on the hook personally. But if the debt was something that your mother ran up before she passed away, you have no personal obligation to repay her debt.

Creditors have the right make a claim against the estate, so if you stand to inherit your mom's house, money, or other property, you'll have to pay the debt in order to keep your inheritance. If your mom passed away with enough money (or home equity) to cover the debt, I doubt creditors (or collectors) will want to bargain.

But if your mother passed away in debt with no money in the bank and no assets, there's nothing for the creditors to go after. You aren't responsible for your mom's debts and are under no obligation to pay the debt out of your own pocket. In that case, you should tell any creditors that the debtor is deceased and direct them to make all inquiries to the executor of the estate in writing. The executor should respond in writing–indicating that the debtor is deceased and insolvent and that the debt will not be paid.

If a creditor continues to contact you personally, submit a letter to the collector (in writing, obviously) stating that you are not responsible for the debt and that any further attempts to collect from you will be in violation of the Fair Debt Collection Practices Act.

But in general, be vary wary of debt collectors, and refuse to ever talk to them by phone or in person; always insist that all contact is in writing. Collectors play fast and loose with the rules, especially verbally, and they will lie to you outright. You'll tell the collector that the law says you're not responsible–and he'll say something like "oh...the law changed just last month."  He's probably not stupid enough to lie in writing, as these practices can get him in very hot water.

The FTC has a website on Debts and Deceased Relatives which may be helpful to you: https://www.consumer.ftc.gov/articles/0081-debts-and-deceased-relatives

formulanone

Quote from: 1 on October 12, 2017, 06:45:06 PM
Quote from: Rothman on October 12, 2017, 06:35:45 PM
Somebody doesn't care about their FICO score.

That would be me. Except for those at or near the bottom, it's mostly meaningless, so I have no reason to care about it. Someone with the median score and someone with the maximum score are treated almost identically.

While this might be true for an 18-year-old with no credit history, this is terrible advice to continue to follow as you get older.

Although excellent credit scores are usually out of range to folks under 30, you steadily gain credit by paying off debts in a timely manner. It typically takes that long because credit scores are based on ten years' of credit history, which naturally leaves you in a lurch of potentially high interest rates (costly credit) just to get to the land of lower interest rates. Been there, endured that.

Credit is a broken system, but if you want that first car loan or a mortgage, or even some well-paying jobs, you need a trail of good credit. The irony is, that even with a stellar credit score, Tier 1 credit, and "no dark marks", there's almost nothing more I want to buy with all that "available credit", because I know I would just have more payments to make on things I probably don't need.

I see no reason to allow "creditors" (cretins who many use predatory tactics) to try to negotiate debt. They buy it at their own risk, so naturally they want as much of it back as possible. But they're under less obligation to report collections back to credit agencies, and might re-sell your debt a second time. It's zombie debt.

kkt

Yes, as much as the credit system stinks, a good credit rating is a help.  Even some potential landlords and employers routinely check credit scores now. 

And a great credit rating can also be a help.  For instance, I wanted to buy a new house and sell the old one.  I couldn't afford to own both at once, so it would have been useful to get a loan for six months to a year to buy the new house, so I could move directly into it instead of moving into a rental while my old house sold.  That would have been possible with excellent credit, but not with poor or medium credit.

roadman65

Quote from: briantroutman on October 12, 2017, 09:40:10 PM
First of all, I realize that might not mean much from a stranger on a highway-related discussion forum, but let me offer my condolences on the loss of your mother.

I think it’s important to figure out whether you actually owe the money or not. If the debt is something that you signed for (such as the funeral), you may be on the hook personally. But if the debt was something that your mother ran up before she passed away, you have no personal obligation to repay her debt.

Creditors have the right make a claim against the estate, so if you stand to inherit your mom’s house, money, or other property, you’ll have to pay the debt in order to keep your inheritance. If your mom passed away with enough money (or home equity) to cover the debt, I doubt creditors (or collectors) will want to bargain.

But if your mother passed away in debt with no money in the bank and no assets, there’s nothing for the creditors to go after. You aren’t responsible for your mom’s debts and are under no obligation to pay the debt out of your own pocket. In that case, you should tell any creditors that the debtor is deceased and direct them to make all inquiries to the executor of the estate in writing. The executor should respond in writing—indicating that the debtor is deceased and insolvent and that the debt will not be paid.

If a creditor continues to contact you personally, submit a letter to the collector (in writing, obviously) stating that you are not responsible for the debt and that any further attempts to collect from you will be in violation of the Fair Debt Collection Practices Act.

But in general, be vary wary of debt collectors, and refuse to ever talk to them by phone or in person; always insist that all contact is in writing. Collectors play fast and loose with the rules, especially verbally, and they will lie to you outright. You’ll tell the collector that the law says you’re not responsible—and he’ll say something like “oh...the law changed just last month.” He’s probably not stupid enough to lie in writing, as these practices can get him in very hot water.

The FTC has a website on Debts and Deceased Relatives which may be helpful to you: https://www.consumer.ftc.gov/articles/0081-debts-and-deceased-relatives

I am executer of the estate as my dad set it up in trust before he died way back in 98 as Florida laws are very complex as we have probate laws in effect here.

I am not worried being her FICO is not a concern as she is not here to warrant from its effects.  She ran up credit cards galore as before she died she was hooked on a lot of medicine her doctor prescribed to her especially Elequist and Hydrocodrone.  She became careless in the end as she had severe depression as I do believe my mom might of had Aspergers (she was never diagnosed as back in the 30's when she grew up it was never heard of and people considered the rage fits with it as a personality trait then as well) so her loss of my dad and my mental health made her more depressed and into the pills and using buying at Walmart and Publix as an excuse to get her out of the house.  Because her spectrum I could not control her rage in the end and of course she never made friends cause her Aspergers made her attention span real narrow and had trouble communicating as she was always ready to talk about her problems before another person said hello.

But anyway thanks, her debts are paid through the equity as my sister used them.  Only her electric and water and Discover as well as the loan on the equity in the home are outstanding where when the check for her life insurance comes it should cover the cost as I am not paying out of my own pocket for it for sure.
Every day is a winding road, you just got to get used to it.

Sheryl Crowe

jwolfer

Quote from: roadman65 on October 12, 2017, 07:07:21 PM
I don't have it where I am that bad off. But, since my mom passed away she owed some money, and right now getting life insurance to kick in is a waiting period.  FYI, you may have great insurance to cover burials and debts, but the timing of payment Alex Tribeck won't tell you.  Funeral homes don't give time, as they want you to pay them up front and the debt collectors don't care if one is dead or alive, but want that money regardless.

So we are paying them as we go along.  If it goes to debt collections we will pay them as my mom's FICO score does not matter anyway.

For me I often wondered as I heard conflicting stories about the right way to settle a debt.
If it's an unsecured debt like a credit card... No need to pay, especially if you have to use your money to pay mom's debts...

Z981




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