Collections Law/Paying off debts
My boyfriend and I combined have about $20,000 in debt which we are attempting to clear up. We combine our income for the household bills and each keep 25% of our income as our "personal spending" - the old 'pay yourself' motto. This is the first time I've done it and it's nice being able to buy something small for myself or kids without feeling guilty...I used to pay bills down to the penny and have nothing left over. We have 6 kids, soon to be 7, so pretty much live paycheck to paycheck with little to nothing left over at the end of each week. I have looked over our credit reports and attempted to come up with a payment amount to send each creditor monthly which would pay off our smaller debts (anything under $1000) within 2 years or just a little over and anything larger within the next 5 years or just under. The total, if I can do it this way, would only run us about $200/month total. I am curious to know if a collection agency can reject our monthly payment. I've been told by some places they only take income into account, not dependents, bills, etc and based on income of $470 every 2 weeks, they state I can afford to pay over $200/mo on 1 debt. I can't afford that and still pay bills or care for my kids. If I send $20/mo without speaking to someone first, just put my account number, do they have the right to reject my payment?
I have owned a collection agency for 25 years and have always tried to work with debtors with payment plans but usually a minimum of $50 a month. Unfortunately however it is an old wives tale that if you send in a small payment the collection agency is bound to take or accept such terms. The most important for a consumer to negotiate payment plans is communication. Acknowledge the debt and you are willing to pay it off but on a limited income and over a certain time frame. Most companies will work with you if they feel you have good intentions. Good luck.
Gary Lee Gammenthaler