so there comes a time where all of us at
one point or another or at least
the greater majority have made the
biggest mistake and that's
paying a debt collector and paying
collections now i know what you're
probably thinking and you're probably
thinking well irv i want my credit score
to go up
or i'm tired of having a 500 credit
score or i'm tired of being in the low
600s
so i'm trying everything in my power to
boost my credit score and look
i get it i've been there but here's the
thing
if you've paid collections in the past
and if you've ever paid a collector
did you notice that when you checked
your credit report the following month
well your credit didn't shoot up at all
and in some cases
your credit score either remained the
same or it actually
went down you see paying a collection
agency and paying a debt collector does
absolutely nothing for your credit score
and that's why i
strongly recommend for you to watch this
video for you to find out why you should
never
pay a collection agency and don't forget
to share this information with someone
that you know could be committing the
mistake
of paying a collection company thinking
that their credit score is going to go
up
or has paid a collection agency and
hasn't seen
their credit score go up at all now
you're probably wondering okay irv well
they've sent me these letters stating
that company xyz
that they've now taken over the debt of
the other credit card company or maybe
a phone company that i owed money to so
what do you mean i don't have to pay
these collection agencies they have my
name they have my address
i think i owe them money let me help you
out because this is how it works
with collection companies when the
original creditor let's say
credit card company abc has been trying
to get someone to
either pay their debts or pay the amount
of money that they owe because they fall
in behind
for whatever reason that is after 180
days whether it's at the end of the year
or let's say after 180 days they decide
to then
do what's called a charge off and a
charge off simply to that means we are
now
writing this off of our books because of
tax purposes we've now
taken a loss on this so now they're
going to do one of a couple of things
they're either going to charge it off
and call the insurance company let them
know that hey we've taken a loss on this
or within that charge off they then call
collection agencies and then they
sell that portfolio of charge-offs which
is a pool of hundreds if not
thousands of different charge-offs from
different people not just
one person and now what do these
collectors do in these collection
agencies
well they buy this portfolio of debt
from the original creditor
for again hundreds if not thousands of
people for pennies on the dollar
literally getting a portfolio
of a thousand names and a thousand
different statements
for ten maybe even fifteen dollars when
in return it's already been written off
as a
tax loss to these original creditors
so now these collection agencies are
just looking to double dip
on what another company has already
profited off of
so first things first one of the reasons
you are not obligated
or even should be paying these debt
collectors is because legally
you never made a legal binding contract
with them stating that you are going to
get a loan from them
and that you will be paying them back
that's between you
and the original creditor which remember
it's already been charged
off the second reason is because
remember these collection agencies
already purchased that debt
from the original creditor but here's
how that works when they purchased that
debt
they were only buying these snapshots of
these contracts
for the original contract but they don't
actually own
the original contract that's right so
they don't have a physical copy
of your web signature verifying and
validating that you
actually owe them that money and that
you're indebted
to them and the reason why more often
than not they don't have that
information even though they'll send you
these harassing letters that say
hey we've been assigned by xyz credit
card company that you owe them we've not
taken over the file to legally come
after you
is well it would cost them significantly
more money because
remember they're buying in the thousands
when it comes to these portfolios
to actually get their hands on that
information
from the original credit card company
that someone owes the money to let's say
that this
cup or this mug signifies the debt that
they are selling off
to these collection agencies and the
markers represent
all the debt that's being sold off well
here's the thing all the debt that's
being sold off in here
doesn't have the actual original
contracts in it
because they're all right here and
that's what makes it
more expensive for them to buy
on the back end and at the end of the
day it is a business transaction for
them and an extremely
risky one at that let's say that they
buy 10 different charged off accounts
from these original
creditors with all the information well
guess what they now have to go through
the same process
of trying to get someone to actually
cough up the money that they owe because
it's already been proven that the person
doesn't have any money
or has shown that they cannot pay that
amount of debt within the last 180 days
leading up to them going into
collections and becoming an official
charge-off so rather than running the
risk of them not possibly seeing a
return on their investment
by purchasing maybe a more expensive
original contract for the debt owed
these companies will go ahead and settle
for hundreds if not thousands of
different collections within
one big debt portfolio because if let's
say they for whatever reason
aren't able to get any money on it well
it only cost them 10 15 bucks for again
that big portfolio
to begin with and this is why you always
see them calling you hundreds if not
thousands of times a day calling your
friends calling your relatives and now
it gets
super embarrassing because now
everyone's knowing or everyone
thinks at least that you owe these
different companies this amount of money
and not only is that a form of
harassment but you can also send them a
letter that's a seize to the cis
if they continue to call you these
companies don't own the original
contract they don't have any hard
evidence on you
and in some cases they're not even
licensed to collect debt
in your state and this is exactly why
you never want to pay collectors because
at the end of the day they're just
trying to get money out of you this is
why they're so quick
to settle a debt after trying to harass
you
calling your mom calling your dad
calling everyone that could possibly
be tied to you and by the way i never
recommend for you to be
in direct communication with any type of
collection
agency via phone if you are and you are
trying to dispute or if you are trying
to get some type of
debt validation which we'll talk about
here in just a second then i recommend
doing all of that correspondence
via mail again companies like this have
hundreds if not thousands of different
people that they have in rotation
constantly getting caught constantly
getting bombarded
and this is why they're so quick to
settle let's say a four thousand dollar
debt
that you had with the original creditor
down to let's say
500 bucks with a collection agency but
again
it doesn't do anything to improve your
credit score other than giving you
your credit score a satisfaction stating
that you've
finally paid off the collection agency
but it never comes
off of your credit so there's two things
that you can do you can either send
the debt collection agency validation
letters letting them know hey look i
want to get this debt
verified and if you don't know how to do
that then i recommend that you reach out
to someone that
maybe has some experience maybe a lawyer
or maybe someone in your local town
that knows how to handle collectors and
put them in their place or you can say
dispute letters disputing this stuff
letting them know hey look this debt
doesn't belong to me
or if you did settle for whatever reason
and that is still showing up on your
credit and you want to delete it
from your credit report you can send
dispute letters over to
experian transunion or equifax now one
really important thing that you do want
to find out
is the statute of limitations for your
specific state
and how long that stays on your report
and how long they can continue
to come after you for one dirty tactic
that these collection agencies do which
again just
drives me crazy is they will literally
find a way to have someone pay it
or somehow it magically gets paid or
somehow they
magically find a way to have a statement
pulled up where it says on this date you
paid even a dollar
toward it and this yet again throws you
into that loop so rather than waiting
for
five even six years for it to come off
well it again
starts the cycle i've heard of stories
where people are literally on their
final week
before it comes off after waiting the
three four even five years
and then all of a sudden they get a
report the following month
stating that well they went into some
type of payment plan
with these collection companies which
again it beats me of why anyone would
ever do something like this to begin
with
and there you have it i hope that you
enjoyed this video on why you should
never pay
a debt collector and a collection agency
if you haven't done so already and if
you found value
in this contract would you mind sharing
it with someone that you think is
committing the biggest mistake
that they could be making with their
credit and if you haven't done so
already don't forget to hit the
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each and every single week once again my
name is irvine pena
also known as herbofficial until next
time everyone we'll see