I have a student loan in collections at NCO financial.  I owe Royal Bank the money, and they're willing to settle for 65% of the total loan, but if not, I'm told that they will take me to court and try to get my wages garnished.  If a garnishment is possible, why would they be willing to settle?  They could just demand the whole amount owing.  I worry that I will send money and they will demand more, or change the agreement.  If I can obtain it in writing the total owing and an agreeable payment amount, can they turn around and continue to call me for more or threaten to take me to court?  I don't like the idea of direct withdrawals, and I'm concerned to even send cheques because then they'll still have my banking info - the agent tried to convince me that people bounce cheques all the time so they prefer direct withdrawals (I don't bounce cheques!!)  I want to get this off my back but I feel $20 a month is only going to keep them happy for...well a month!  If someone knows the best way to pay this agency without further risk to me and my sanity, please help!  It has been hanging over me for almost 7 years...

 In your case, from what you have described, the collector is using the threat of legal action as the motivational tool to get you to respond in the way he or she wants you to.

 In a nutshell, the collector is offering you the incentive of a potential settlement to avoid legal proceedings by the way it sounds.

 Collectors have permission to settle accounts for a certain amount. In many cases, collectors toss around numbers in an effort to get you on the hunt for cash. Then, once you comeback to them with the cash thinking you have struck a decent deal, they suddenly change their tune and tell you that they have to take it to their client for approval first. If your lender rejects the offer, then the collector knows that you have a certain amount of cash that they can approach you for. This is where the rules get broken when you put up resistance.

 Lesson # 1 - never pay any money out unless you have something in writing to the effect from the lender.

 Lesson # 2 - Don't borrow money from a high risk/high interst lending institution or finance company to consolidate debts. These companies charge more than 30% interest on note loans in most cases.

 Suzi,

 I can solve this crunch of yours if you want. I offer information freely all of the time, but if you want it solved, it will require intervention. If you would like to become a client, let me know.

 Otherwise, I wish you the best of luck and keep us all posted.

 Kind regards,

Johnny

  http://www.cfwgroup.ca/ - www.cfwgroup.ca

  http://www.cfwgroup.ca.forum/ - www.cfwgroup.ca.forum http://www.cfwgroup.ca.forum -

To answer one of your questions, suziegirl, they are offering to settle because they CAN. In other words, if the collector can get a lump sum payout, collect the commish, close your account and move on to the next one, he will. It beats sending the account over to the legal guys, suing, waiting for a judgment, filing the garnishment order and collecting little pissy amounts every couple of weeks.

Don't forget...you're dealing with a bill collector, not the bank. The collector doesn't give a rat's ass about the bank's money...only his commission.

 Sure they can settle with permission from their client. Or, within the parameters of their blanket approval. But in most cases they simply toss around numbers to see what a debtor can scrape up - and then pounce on the oportunity to collect on that in the event that a settlement is declined.

 You should know this stuff.

 I am sure this is a tactical methodology that all collectors adopt in the process of learning how to motivate people - and use fear as a tool of the trade. It happens all over the world - likely even in Southeast Asia.

 Johnny

  http://www.cfwgroup.ca - www.cfwgroup.ca

 "Most Banks will settle for about 50% for long term unpaid debt, because of write offs."

 This is not true at all.

 The standard amount is anywhere om 90% down to 80%. In some instances they can go to 65-70% depending on the client. For instance, CIBC aconts in third-party that are under $5000.00 can settle for 65% - sometimes 70%. For accounts over $5000.00, the norm is 80-85%.

 The only way a collection agency can settle for less than 60% today is if the debt has been purchased by that agency. There are collectors who have been removed from the industry for acepting their commonly described "below parameter" settlement offerings without permission from the lender.

Johnny

http://www.cfwgroup.ca - www.cfwgroup.ca

Johnny....

Or Turkey or Mali or Paraguay, I suppose. What's your point?