So, the collection agency is calling you about an old debt. They want you to pay it, and they want you to pay it right now. Threats may come: "We'll put a judgment against you" or "We'll garnish your wages and bank account" are two of the most common. They will try anything to get you to pay the debt, or a portion of it. Negotiation will start immediately.
I say, do not negotiate with them, let them sue you. Its not that I need more clients, quite frankly, I have plenty of them right now. There is sound reasoning behind my statement and it is based on several little known facts.
First and foremost, you need to realize what a collection agency is. For the most part, the agency is a business that has purchased your account from the original creditor, often for pennies on the dollar, with the intent of collecting the total debt from you. Its quite a profitable business. Imagine if you could buy $1,000,000 worth of debt for $3000. That's what they do. You would only have to collect on a few accounts to break even, after that, its all profit.
When the collection agency buys the debt, they often do not get all of the information that they need. I have found that many times the collection agency receives only the name, address, account number and balance due and owing on your account. They do not obtain any account statements, terms and conditions, signed applications, et cetera... That is the important part for you.
In Pennsylvania, a collection agency needs all of previously mentioned documents (and others) in order to prevail at trial if a lawsuit is filed against you. (Other states may have different consumer laws and I cannot speak as to the requirements or laws of other states in this regard). If they cannot come up with them, most times, you win. If you win, that means that you do not owe the debt. The key is in properly presenting your defense. A knowledgeable consumer attorney can file the proper paperwork and make the right arguments to have the case dismissed.
To conclude, I would almost never negotiate with a collection agency in Pennsylvania. You would be much better off in paying a consumer attorney a fraction of the amount of your debt to defend your interests and hopefully make the claim go away.
About the Author
Greg Artim is a Consumer Attorney based in Pittsburgh, PA. He handles Credit Card and Collection Agency Defense matters in all of Pennsylvania. For more answers to your Credit Card, Collection Agency or Debt Settlement questions, please visit his website at Collection Agency Defense Lawyer.