Debt negotiation: What options does the collector have if the debt is not paid?

I have a $2500 business debt "line of credit" (business has been closed due to highly impacted by economy) originally through Bank of America that has been "charged off" by the bank. The debt has now been sold to a collection agency/attorney that is attempting to collect. I am now financially able to negotiate a pay off, however, not sure how much I trust the collector. I have asked that in exchange for the settlement, my credit show as satisfied rather than negatively impacting credit. The collector advised me it would show RUR. I have searched the definition of RUR on a credit report and have been unsuccessful in finding. I am 41, have always had good credit and this is the only debt from the closure of the business. I want to satisfy the debt but I struggle with rather it is worth my attempt with this collector if my credit will have a negative impact regardless. I own everything else jointly with my wife. My wife was not an owner of the business nor was her name on the line of credit. What options does the collector have if the debt is not paid?

[AFFA]

I wish to inform you that the collection agency will proceed against your assets if you do not pay the amount on business loan. In this regard the assets in the name of your wife may not be taken because the debts are your business debts and not joint debts. Further the creditor can therefore proceed only against your assets which may by order of the court be sold to fulfill the debts.

AFF

They can sign a release and agreement that the debt is paid in full and an agreed amount paid.

So that would not be a negative for you.

[esterdsl]

There are two possibilities.

Some creditors will actually use a separate company name, address, and phone number for their internal collection departments, in order to give the impression of an "outside" agency, on the theory that debtors will take it more seriously. This strategy is generally only used when the debt is recent (under six months delinquent.)

However, most collections activity is performed by third-party collection agencies, which are separate from the original creditors, and "work" debts on behalf of various lenders. They may also buy bad debts which have been designated as charge-offs by the original creditor.

Since none of the responses here even come close to answering your question or explaining anything to you, let me be the first.

No collection agency or any other entity can enter into a negotiation with you to either remove an item on your credit report or make it appear as satisfactory. Once an item is placed, it's there for 7 years (10 if involving bankruptcy). No amount of negotiation can change this. The only way an item is removed is if it's being reported inaccurately, or the time limit expires (usually 7 years). For that, you will need to fight them via an attorney who deals with consumer protection or be well versed in the Fair Debt Collection Practices Act.

If you are now in a position to pay this debt off, pay it off to the ORIGINAL CREDITOR. They are the only entities even remotely deserving of being paid. Collection agencies merely buy debt and then try to collect on that debt using scare tactics and intimidation. They did nothing, provided no service, to earn the money they attempt to collect.

Pay the original creditor, and negotiate with them to contact any and all collection agencies they may have used, and alert them that the debt is paid off and no further collection attempts are to be made. The original creditor should agree to this.

It really doesn't matter whether you pay this off or not when it comes to your credit report and score. ANY Negative item will impact your credit, although the longer it remains the less impact it has (it still has an impact, however). Even though the collection agency may report the paid amount as paid, this does not change the fact that it is delegated on your report to the "negative items" section, and there it will remain. If does nothing to affect the credit report in a positive way. Yes, it's showing as "paid", but this is what creditors perceive of that information. They perceive that a consumer fell behind and did not pay according to their contract. They perceive it took a collection agency to get the consumer to pay. The perceive that the consumer actually paid a collection agency (this is usually done out of desperation). Creditors do not care whether it's SINCE been paid. All future creditors see is that there's a negative item in the first place and that's all that they care about.

Paying off a collection agency will not send that negative item into the positive pile. It remains as a negative, and the only people consumers have satisfied by paying any collection agency is themselves and the collection agency. The collection agency is laughing because it bought your debt for pennies on the dollar and made (more than likely) 100% profit off it. You really get nothing out of paying a collection agency.

Negotiate with the ORIGINAL CREDITOR. Further, if the original creditor did not place the item on your credit report, but it's now on there under the name of the collection agency, you can sue the collection agency for reporting under their own name.

Some original creditors will not negotiate because they have contractually agreed to sell the debt and not to collect on it themselves.

That may be true for some, but most legitimate, reputable original creditors will do so, since they are the ones who are out the money in the first place. Selling a debt to a collection agency nets them next to nothing, while negotiating payment with the consumer will provide the most reasonable recompense.

Original creditors never entirely give up their own right to collect on a debt owed them. They rarely, if ever, contract a negotiation in which they give up their right to collect the debt themselves. They always reserve the right to collect, should the consumer which to enter into an agreement to pay.

Then how does the collector get paid for doing all the work chasing the deadbeats down?

Originally Posted by Unregistered Then how does the collector get paid for doing all the work chasing the deadbeats down?

The collector runs that risk when buying bad debt. Further, the term "deadbeat" is a mater of perception here, since collection agencies are owned, operated and run by deadbeats themselves.

Collection agencies employ the lowest common denominators of society. Many employer convicts and ex-convicts. Most consumers are struggling to get by and make ends meet. They are not preying on the downtrodden, unlike collection agencies.