Creditors and Bankruptcy/Debt Collection Response

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Expert: Regan Shinski - 12/16/2010


Question
I received a letter from a lawyer regarding a large debt i owe, I have been making regular payments for some time but I am guessing they no longer wanted to service it and probably want a lawyer to put a scare into me to pay quicker. The debt is over $20k. My question is they asked for payment in full and indicated that this lawyer would be handling payments from here forward, or for me to set up arrangements to pay off in a short time. I do not have $20k and most likely could only afford $300 per month. My question is how should i handle this? I do not want to get into a situation which they try to get a civil judgment against me. Should i respond by letter stating what i can pay per month with a money order (dont want them having my bank info)and if they cash it assume it is acceptable? s there anything i should say or not say? Any advice? i live in PA.

Answer
Mark:

There is no easy or one fits all answer to this.  It is simply a matter of negotiation.  Some law firms are more open to negotiation, others are not.  There is no trick.  

What I can tell you is that your best option is to convince them they are lucky to get what they are from you.  This often involves releasing more information, not less.  If you are an eligible candidate for bankruptcy, that is the best option.  If the creditor thinks you are going to file bankruptcy - and this is a bankruptcy dischargable debt - they may be more likely to make better terms for you.  At the very least you should tell them you are considering bankruptcy.  The more convincing or further you can take it, the better.

Sending a money order with terms is typically not a binding contract in most states in cases like this.

Good luck,
Regan

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Regan Shinski

Expertise

I can answer questions on collections, repossessions, bankruptcy, credit repair, credit counseling, FICO scores, credit planning, and the cause and effect of credit related decisions. I can also answer questions on collection settlements and preparing to sue your creditors for false debts and credit reporting.

Experience

Fifteen years ago I was financially devasted due to severe health issues. I filed bankruptcy, had a foreclosure, car repossession, tax lien, and ruined credit. I immersed myself in credit law. I settled dozens of accounts and had them removed to improve my credit. I personally sued four creditors and collection agencies and won cash settlements for their false reporting on my credit reports. Since then, I have completely recovered and have nearly $100,000 in revolving credit lines and perfect credit. I have owned a credit repair company for the past five years and have an additional three years of specific work in the collections and debt management industry. I am fully versed in the Fair Debt Collection Practices Acts (FDCPA), Fair Credit Reporting Act (FCRA), and have used them successfully in collection settlements and lawsuits for myself and others. I am also familiar with and abide by the Credit Repair Organizations Act (CROA). I have deleted or helped delete literally hundreds and hundreds of derogatory items from consumers' credit reports and helped negotiate many settlements with collection agencies and creditors. I have also advised people on bankruptcy at any stage. In the current credit market, I have successfully advised numerous people on how to obtain credit and how to negotiate for better terms.

Education/Credentials
BA - University of Minnesota

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(private)

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