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How can I eliminate the late charges and interest on a credit card that has been purchased by a debt collector?
How can I eliminate the late charges and interest fees on a credit card account that has been purchased by a debt collector? The credit card limit was 300.00 and was over limit of 67 dollars. The card company is saying I owe 1838.98 while the 3rd party company has put it on my credit report as 1929.00 and they changed the account number so it looks like it is a different account.
Thank you for your question, Anita. Unfortunately, the charges which these collectors have added to your account are very likely legal; you probably agreed to the high interest rate the lender is now charging when you signed your original credit agreement. Unless the creditor has charged a higher rate of interest than that allowed by your credit agreement, or violated your state’s criminal usury laws, you probably have little recourse in forcing the creditor to forgive accrued interest and fees. However, settling the debt may allow you to pay only a portion of the interest and fees you have been charged. If you can come to the negotiating table with a reasonable amount of cash in hand (say 40% to 50% of the balance owed), the creditor may be willing to settle the debt with you for much less than you actually owe; if you are able to settle this debt for 40% of the balance, or approximately $775, you would at least be wiping out the majority of the interest and fees which have been added to the debt. To learn more about how to negotiate with you creditors, you can visit the Bills.com website at http://www.bills.com/debt-negotiation-and-settlement/.
Another option to consider is establishing a repayment plan with the creditor; while a settlement would probably save you more money, if you cannot raise the necessary funds to settle, you can offer payment each month in return for some concessions from the creditor. For example, you could ask that, in return for your timely monthly payments, the creditor stop charging any late and over-limit fees, and that it either eliminate or significantly reduce the interest rate it is currently charging. I highly encourage you to contact this creditor to find out what alternative payment options are available to assist you in repaying this debt on more affordable terms.
Regardless of what type of agreement you are able to reach with the creditor, I strongly encourage you to have the creditor send you a letter outlining the agreed upon terms before you make any payment. A written payment or settlement agreement will provide you with proof that the debt was resolved in case it ever comes into question. To learn more about the various options available to assist consumers who are struggling with debt, you can visit www.bills.com/debt-help/.
I wish you the best of luck in your efforts to resolve this outstanding debt, and hope that the information I provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/
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Debt statistics
Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Housing debt totaled $12.82 trillion and non-housing debt was $4.88 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in Michigan, 26% have any kind of debt in collections and the median debt in collections is $1374. Medical debt is common and 13% have that in collections. The median medical debt in collections is $440.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.
