What Is Debt Settlement and Why Do Collection Agencies Offer Settlement Programs?
When a collection agency or debt collector offers a consumer a debt settlement, they are giving the individual an opportunity to pay less than he owes on the debt, which will then be considered paid. Since collection agencies purchase accounts for pennies on the dollar, they can afford to offer these programs for much less than the amount originally owed and still make a profit. Misconceptions About Choosing to Settle a Debt Many people choose to settle a debt because of the damage a negative trade line does to their credit reports. Unfortunately, settling a debt does not remove the negative trade line unless the collection agency agrees in writing that the negative trade line will be removed when payment is received. document.getElementById(‘adsense_placeholder_2’).innerHTML = document.getElementById(‘adsense_ad_2_hidden’).innerHTML; In addition, by settling a debt an individual is conducting activity on the collection account. Old negatives that have sat untouched for long periods da
