Home Buddies – Home Ownership Coach – Houston, Texas

Don’t Just Pay Off that Collection Account!

The following is an example dispute letter for you to use when you have a collection account on your credit report, and you are willing and able to make payment on that account. You should always try to negotiate for “pay for delete” on these types of accounts that are showing on your credit report. This “pay for delete” needs to be done with the original creditor. You may negotiate a pay for delete with the collection company, but it’s best to get it accomplished with the original creditor if you can.

For example, if the collection account on your credit report is from the “VWX” company, you need to read who the original creditor was. Maybe it was originally a debt you owed with “Ma Bell”. You would then need to be negotiating with “Ma Bell” directly and not with “VWX”.

Your credit report will list the names and addresses of all the companies listed on your credit accounts.

Never just pay the collection account without getting an agreement in writing that they will remove all credit entries related to that collection account. If you just pay the collection account without this agreement, then the collection account can/will remain on your credit report. Always get the agreement in writing before you ever pay.

When you attempt this negotiation process on your collection account, you can always suggest/offer to pay a portion of the total amount owed. If the debt is still fairly new (within a few years) be prepared to offer about 60-70% of what is owed. If the debt is older, then offer 30-40% of what is owed. There is no magical number to offer to make them accept your agreement.

Please remember that each state has its own statute of limitations on someone being able to still try to collect on a debt. If your debt has surpassed your state’s SOL on debt collection, then there is a different dispute letter for that issue. In the state of Texas, the SOL on debt collection is 4 years.

Use the sample dispute letter below as a guide for your negotiation in a “pay for delete” on your collection account. Try not to make your letter look like a form letter. Handwriting your letter is acceptable as well. Just be straight to the point, and straight forward about the amount you are willing to pay on the collection account. Be specific in your letter if you need a payment plan to pay the amount you are offering.

Do not sign your letter and do not openly admit that the debt is yours.

Good Luck.
Barbara Partaka
Home Buddies

Pay for Delete Sample Letter

(Insert Date)

(Insert Collection Company name)
(Insert Collection Company address)

Re: Account Number: (Insert Account # here)
This letter is to inform you that:
In the spirit of compromise, I am willing to pay (***INSERT THE AMOUNT/PAYMENT PLAN YOU ARE WILLING TO MAKE***) to settle this account if, and only if, you agree to immediate deletion of this account from any and all credit reporting agencies, including, but not limited to, Equifax, Experian and TransUnion. The purpose of this settlement is merely to have this item removed from my credit files. It is not to be construed as an acknowledgment of liability for this debt in any form.
If you agree to the terms and accept this agreement, certified funds for the settlement amount (***INSERT THE AMOUNT/PAYMENT PLAN YOU ARE WILLING TO MAKE***) in exchange for full deletion of ALL references regarding this account from my credit files and full satisfaction of the debt. As certified funds will be used for payment, there shall be no waiting period regarding the deletion of this account from the credit reporting agencies.
Acceptance of this agreement constitutes a legally binding, contractual agreement to delete ALL information regarding this account from the credit reporting agencies WITHIN TEN CALENDAR (10) DAYS following receipt of payment as specified above and will not discuss the terms of this settlement with anyone, except as minimally necessary to comply with the terms and conditions of this agreement. If contacted by any third party, including credit-reporting agencies, you will not acknowledge that any settlement offer was made, accepted or executed and will, in fact, deny knowledge of any such account.
If you agree to the above terms, please prepare a letter on your company letterhead explicitly agreeing to the same terms as the above settlement offer and have it signed by an authorized representative of your company. It will be implied that this letter shall constitute a legally binding contract, enforceable under the laws of the State of Texas.
Your response must be postmarked no later than 15 days from your receipt of this settlement offer or this offer will be withdrawn and I will request full validation of this alleged debt, as provided for by the Fair Debt Collection Practices Act.
Please address all correspondence regarding this account to:

(TYPE IN YOUR NAME – DO NOT SIGN!!)
(TYPE IN THE ADDRESS OF WHERE YOU WANT THEM TO RESPOND TO)