Is Pay-For-Delete Right For Your Client?
Collection debts can happen. According to Yahoo Finance!, collection debts can damage a credit score, but it is possible to get them removed and reverse the adverse effects they bring. That’s when Pay-For-Delete comes in.
To pay for deletion, or to not pay for deletion, is indeed the question.
What is Pay-for-Delete, and how does it work?
Shawn Lane, the co-founder of Financial Renotavtion Solutions Inc., explains that Pay-For-Delete is a method of paying and requesting the removal of a derogatory item from a credit report.
After an account has gone unpaid for a length of time, it is considered seriously delinquent. If the original creditor decides that going to collect the debt isn’t worth the effort, the creditor might opt to sell it to a collection agency for a fraction of the total amount owed.
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Once a bill reaches collections, it will stay on a credit report for seven years from the date of first delinquency and can result in a negative impact on a credit score.
With a Pay-for-Delete, a person is explicitly stating that they are offering to pay the debt in exchange for deletion, according to the founder of Credit Takeoff, Mike Pearson. The also managing editor advises procuring a written agreement before sending any payment. find a cleaning service here.
Is it worth it?
A few things to bear in mind while considering a Pay-for-Delete, according to Yahoo! Finance:
Each Pay-for-Delete is different for everyone because each person’s credit file is different.
Successful removal of a derogatory collection amount could improve a credit score.
Beware of less reputable collection agencies that might accept payment, but fail to remove the negative item.
If working with a collection agency, a pay-for-delete will only remove the collection amount.
The original debt, as well as late or missed payment information, could still appear in a credit report.
If a creditor or debt collector accepts a partial payment as payment in full, he or she is obligated to report it to the IRS as debt forgiveness if the amount is more than $600.
Dealing with collection debts and considering Pay-for-Delete is a decision that hinges on your unique credit situation. While it can potentially boost your credit score, caution is advised when dealing with collection agencies. Remember that a successful Pay-for-Delete may only remove the collection item, and it’s essential to obtain a written agreement before making any payment. Additionally, be aware of potential tax implications when negotiating a partial payment as payment in full. Weigh your options carefully before proceeding.
For more resources and tips for your credit repair business, visit https://www.scoreceo.com/blog. Don’t forget to subscribe to our podcast, ScoreWay: The Only Way, available on Anchor, Apple Podcasts and Spotify.
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