credit score - charge off and now dealing with collection agency

[california2010]

Hello,

My 2nd equity loan was charged-off by my bank and it looks like they sold it to a collection agency. since my credit score already took a hit, is there anymore damage that could be done now that the un-paid balance is in the hands of a collection agency?

thank you

[TomEason]

Hello,

My 2nd equity loan was charged-off by my bank and it looks like they sold it to a collection agency. since my credit score already took a hit, is there anymore damage that could be done now that the un-paid balance is in the hands of a collection agency?

thank you

It's irrelevant whether your 2nd goes to a CA or not. The late payments are reported to the CRAs anyway, so the credit impact is the same. I recommend you not worry about, or even think about your 2nd.

[california2010]

Thanks for the reply tomeason. how do you recommend I deal with the collection agency? They left a message on Friday last week and just called back today (but didn't leave a message). At some point I will need to make a monetary deal with them right? The CA said give me a call to discuss before we file a lawsuit... which I assume is to garnish my wages? I would think about filing for chapter 7, but we make too much money. I owe roughly $30k on the 2nd...

[TomEason]

Thanks for the reply tomeason. how do you recommend I deal with the collection agency? They left a message on Friday last week and just called back today (but didn't leave a message). At some point I will need to make a monetary deal with them right? The CA said give me a call to discuss before we file a lawsuit... which I assume is to garnish my wages? I would think about filing for chapter 7, but we make too much money. I owe roughly $30k on the 2nd...

I recommend you stop worrying about the collection agents's idle threats, which is what they are (collection agents are trained to intimidate debtors). Have nothing more to do with the CA, i.e. do not communicate with them at all - don't pick up the phone, don't return calls, don't answer any letters. In answer to your question, you may eventually (after time passes) want to negotiate a settlement with them in return for reconveying the lien. However, don't rush, don't be eager. Time's on your side - they will become more compliant. You might set your own goal for a settlement amount, e.g. 10% of the balance. Don't tell the lender what your goal is and don't provide any info to them (like updated financials). They will eventually make you an offer; when that happens, don't be eager to accept it, but counter for a lower amount than your goal amount. And, don't even think about lawsuits or BK! Good luck.

[cahomeowner]

I recommend you stop worrying about the collection agents's idle threats, which is what they are (collection agents are trained to intimidate debtors). Have nothing more to do with the CA, i.e. do not communicate with them at all - don't pick up the phone, don't return calls, don't answer any letters. In answer to your question, you may eventually (after time passes) want to negotiate a settlement with them in return for reconveying the lien. However, don't rush, don't be eager. Time's on your side - they will become more compliant. You might set your own goal for a settlement amount, e.g. 10% of the balance. Don't tell the lender what your goal is and don't provide any info to them (like updated financials). They will eventually make you an offer; when that happens, don't be eager to accept it, but counter for a lower amount than your goal amount. And, don't even think about lawsuits or BK! Good luck.

has this strategy worked for anyone? please share

[TomEason]

has this strategy worked for anyone? please share

Yes, there are posts from other members who've successfully negotiated good settlements following this strategy. I recommend you search the forums for those posts because I don't have them at my fingertips. Good luck.