I am going to give you some advice that will be quite controversial for some.  If your debt goes to collections then stop paying your debt, and when I say this, I mean: 

Stop Paying Your Collections!!!

Sometimes my new Credit Counsel Elite students will have collections agencies chasing them.  They have had hard times in the past, and this has resulted in several late payments; usually, about 6 late payments in a row until which time the bank charges the debt off their books as a collection.  

You should not feel bad about this; it is totally OK; we have all been there.

After a certain number of late payments, the lender will decide to sell your information and your debt to a collection agency. You need to understand that it is a third-party collection agency, and you have not signed a contract with them.  

Let’s show an example; 

Wells Fargo, if you have late payments, roughly six months being constantly late, not talking to the bank, and not being transparent about your situation, the bank, after attempting to collect the debt through multiple attempts, will decide to write off your debt as a loss, utilizing the write-off as a tax deduction and they will sell this debt for pennies on the dollar to a third-party collection agency.  

The collection agency has just bought your debt, but at that time, they have no contract with you.  So after they purchase this debt, they are going to try to get you to admit fault.  They do this by calling you and hounding you in several ways.  Some of these methods are illegal ways to obtain information or threaten you.  Be mindful of this.

PRO TIP: You could potentially sue a collections agency if they conduct illegal activities for any reason in the pursuit of your debt.

A collections agency will generally call you and attempt to get your full name, obtain your current address, and get you to admit to the outstanding balance they have purchased.  They are trying to get you to be liable for the debt.  You are liable, but you are liable to Wells Fargo, not the collections agency.   

When it gets to this point, it is very difficult to get this debt off your credit report without doing credit repair.  We have several ways to use the fastest modern techniques that are working in hours to 10 business days in many cases that get the debt off your report completely. Meaning it no longer affects you, and you are no longer responsible for replaying the previous debt.  

Regardless if you pay the third-party collection agency or not, you can not get the debt off your report without credit repair.  Even if you pay it off in full, it will not fix your credit like many think it will.  If you paid in full that day, you could get a letter from the third party to provide to the three credit bureaus to label it as “paid as agreed,” but very few collections companies will still provide such a letter, so the bad mark is still there.  Lots of collections agencies will say they will provide such a letter but still lie and do not do it.  Make sure to get this letter stating they will label it “paid as agreed” to all 3 bureaus before actually making the payment, and if it doesn’t say this I wouldn’t recommend paying. Treat that letter as your golden ticket if received. 

I have had clients that I advised not to pay the debt and go through credit repair, which at the time, they could not afford.  When they came into money later, they forgot about this advice and paid the debt in full.  The bad remark stayed on their report (they were delinquent, they went to collections), and they still had to go through credit repair anyway to get those items removed from the report.  So it was not worth paying the debt in almost all cases.

With credit repair, when debt gets to the charge-off point, it becomes easier to remove because you never actually signed any documents with the third-party collections agency.  

If Debt Goes To Collections….

Simply ignore the incoming calls.  If you answer, the first question the caller will ask will be, 

“Is this Brandon?” or the better agents will say…

“Hey, Brandon!” 

Never agree to admit who it is; the response to this needs to ALWAYS be,

“May I ask who’s calling?”

They are supposed to mention they are a collections agency, but agents will try to get you to admit you are the person before they acknowledge this.  If you admit that it is you, they can continue to call. 

At that point, you need to say the following politely, 

“Wrong number; this is not Brandon; please stop calling and take this number off your list.”

They should obey this request but you must realize, frequently, they will not.  They may still keep persisting.  Even if they abide, they may sell this same debt to another agency, starting the whole cycle over again, so you may have to repeat the same process more than once for the same debt, until you go through credit repair.  

Go Through Credit Repair and Get the Score Boost

Once it is at this point, you can go through the credit repair process, or I can teach you the simple step-by-step process we teach at www.CreditCounselElite.com and get the item removed from your credit report faster than anyone in the industry.  I have seen items removed within hours to 10 business days and, in the worst case, after a few months, not having to pay the debt owed.  This will have a massive impact on your credit score and financial future.  

At Credit Counsel Elite, we teach business owners how to get up to $500K at 0% interest every six months; for more information, CLICK HERE