Understand when you do a settlement that you will have to pay taxes on anything over $599 of the amount you did not pay. For example–$10000 in debt, settlement of $5000. This leaves $5000 not paid. You would receive a 1099 form from the IRS for taxes owed on $4401. The IRS considers the amount you did not pay as income. Do request something in writing agreeing to the terms. Unlike some, I would not worry about doing the payments over the phone through a checking acct–you do have an agreement in writing. Of course, I work at a reputable company–this makes a big difference. You could send money orders, or pay western union–the collection company can give you a free code so it does not cost anything to do the western union. Good Luck! ***

There are only 4 circumstances where you should pay a collection agency.

1. They have proven to you that the amount they are claiming you owe is in fact the correct amount and that they are the correct people to pay.

2. They will delete (NOT update) the account from your credit reports when you pay it.

3. You are applying for a loan or mortgage and the lender is requiring it to be paid.

4. You are getting sued for the debt.

In any case, you should always try to negotiate deletion of the account from your credit report.

I am 100% sure that guy was lying to you.If I were I won't pay a thing.I do nothing.What is the worst can happened? you have bad credit.Most people have bad credit and learn to live with it.I had this credit co.i I was with them for 2 years.I told them I wanna pay off and closed the account and I don't want to do any business with them.They suggest that I shouldn't closed the account and if I do I should get another card with them.LOL.They told me If I closed the account with them that my credit would be mess up or look bad bla bla bla.

Check with credit card co. to be sure this agency has been authorized to handle their collections. Get physical location, phone number, name of person assigned to account and their authorization to do settlements. Have the CA send you the proposal in writing before sending ANY payment. Send payments only to a physical address as a lot of fraud happens with P.O. Boxes.

Absolutely get a written agreement from them FIRST prior to payment. This statement should give the exact amount to be paid and it should state that your account will be paid in full after this amount is paid by you.

DO NOT give them your checking account # for auto debits…if you do they can take out way more than you authorized and this could lead to an avalanche of bounced checks. Pay only via USPS money orders…..keep receipts for your records.