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Tips for Negotiating a Pay for Delete Request

Posted on December 12, 2011

One method for eliminating part of your debt load is to request from a creditor or a debt collection agency that a pay for deletion be used to settle your account balance still outstanding. For the consumer, a portion or a full amount of the balance is paid in exchange for a deletion of the account.

There are some collection agents that will lead a consumer to believe a pay for delete negotiation is not legal or they are not able to offer you the option. However, a pay for delete is an acceptable practice for negotiating debts.

Get It in Writing

A key point in a successful negotiation to delete accounts after payment is to ensure all negotiations and made agreements are put in writing. If you are sending a request for a payoff and an account deletion, it should be done by you in writing to the creditor or collection agency and mailed via the certified, return receipt requested option at the post office. It will cost you more in postage but the extra steps will give you the peace of mind that you have left a traceable negotiation on your debt.

Other Tips for Successful Deletion

Once you are able to negotiate a pay for delete scenario with a collection agency or creditor, you will need to request they sign a copy of the agreement and return it to you. You can then forward a copy of this agreement to the credit bureaus to increase the processing time of the request. You should not pay on the debt as agreed until the copy of the letter signed by the collection agency or creditor has been returned to you.

Never assume the creditor or collector will do what they saw they will. Many will make such agreements, take your payment, and fail to act as they said they would. You can make an effort of good faith by purchasing a money order or a certified bank check addressed to the creditor for the full amount you agreed to pay. Make a copy of this document and send it to the creditor along with a letter requesting their confirmation of the negotiation on your account. The more confident the creditor or collection agent is that you indeed will hold up your end of the negotiation, the more likely they will be willing to also follow through with a confirmation.

Credit Score Beware

Pay for deletion, when completed, will remove the account from your credit report but know that it may not increase your credit score. In fact, deleting the account can actually lower your credit score. This is especially true of the account you are closing is the one which gives you the longest history. It is wise to consider which accounts being deleted from your credit report will have an impact and negative consequences on your credit rating.

Pay for deletion is a reasonable negotiation tactic in some cases but not all debts will be a wise choice for this elimination method. Additionally, not all creditors will be willing to have the account deleted from your records. However, it does not hurt to try your hand at using this negotiation method if it will allow you to pay a percentage of the debt and consider it settled.

Here is a sample of the pay for deletion letter you may want to consider creating for your overdue, unpaid accounts. Be sure to send the request letter via certified mail and request a receipt of delivery be returned for your records.

Sample Pay for Deletion Letter

Re: Negotiation of Account #: xxx

To Whom It May Concern:

I am able to pay $xx to be consider full and final payment for the above-referenced account in exchange for the deletion of this account from all records of credit reporting agencies to include, but not limited to, TransUnion, Experian, and Equifax.

I am not providing an admission of liability for this account debt but would like to have the negative credit information promptly removed from my credit file. I have attached a copy of the full agreed-upon amount in the form of a cashier’s check/money order and am prepared to mail the full payment once your signed agreement has been returned.

At this time, I request:

1. Compete deletion of all references to this account from my personal credit file

2. Signed agreement on the full and final payment of this debt

3. No delay in reporting to the credit bureaus as payment is in the form of verified and certified funds; any and all information referring to this account will be deleted from the all credit reporting agencies, including but not limited to Experian, Equifax and TransUnion, within ten (10) calendar days following receipt of full and final payment of agreed upon amount

4. (Creditor or Collection Agency) will not provide or reveal terms of this settlement with anyone. (Name of Creditor) will not acknowledge that any settlement offer was made, accepted or executed to any party, including credit reporting bureaus.

If you are in agreement with the above terms of this request for a debt settlement, please provide a letter on your company letterhead acknowledging the above-mentioned settlement terms and have the letter signed by an authorized representative of your company.

I request that your response be postmarked no later than 15 days from your receipt of this settlement offer I will withdraw the offer of settlement on this account.


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