Collections: Quick Question

[UniqueAquarius]

I pulled my credit and noticed that I have two items on my report (one medical and the other a library fine). Both items have been in collections for almost a year.

I am in the position to pay both of them, however, in reading, I see that there are somethings/letters that I must first take care of first to increase my chance of a more favorable outcome.

I have made contact with the OCs and both state that in a situation where an item has been sent to collections, the client still has the option of paying them, however they are unsure of how the item will be reflected on the client's CR.

Please assist me with what my next step should be? If I need to send a letter, which letter? If I send the letter, to whom (OC or CA)?

PS...I am a "Newbie/Beginner" and I want to make sure I am taking the correct steps. Chane and Trish (others as well) I have read so many of y'alls postings I feel like I should treat y'all to dinner!! Thanks in advance!!

[Lian]

When paying a debt that has been referred by the OC to a debt collector, the first thing to determine is who now owns the debt.

When an OC places a debt for collection, they can do it one of two ways.
They can simply contract with the debt collector for their services in collecting the debt. The OC retains ownership of the debt, and collection authority is assigned to the debt collector.
Alternately, the OC can sell the debt outright to the debt collector.

In the case of referral with retainer of ownership, the OC can still collect the debt, for they still own it. However, many OCs will, once they have hired a debt collector, divorce themselves from the collection process, and requrie all payment related transactions to be directed to the debt collector. That is a personal OC decision. If the OC should decide to accept payment, both they and the debt collector will them update to a $0 balance owed, and the CA authority would terminate. However, unless a prior agreement is reached to delete previous credit reporting, the party who you pay, be it the OC or the debt collector, is not obligated to delete any prior credit reporting. Prior agreement to delete in exchange for payment is called a PFD, and should always be secured in writing prior to payment. A PFD agreement accepted by the OC does not bind the debt collector to any CR deletion, and visa-versa.

If the debt collector owns the debt, then the OC cannot accept payment. Any payment or PFD offer would then have to go only to the debt collector.

[UniqueAquarius]

How do I determine who owns the debt? I thought I would base it on the fact that the OC was willing to accept a payment from me in addition to 10.00 for the CA, however I read that some OCs will accept payments and give it over to the CA. Thanks again in advance.

[Lian]

The only way you can determine from your CR whether the OC still owns the debt is to look at the recent reporting by the OC, and if their reporting was after the date of referral for collection, and the OC is still reporting a balance, then they most likely still own it. When the OC sells the debt, they must update your CR to show a $0 balance. The balance reported by the debt collector would then reflect their ownership, and not just their collection authority.

If the OC no longer owns the debt, then they cannot legally accept payment. The fact that they are willing to accept payment is a pretty clear indication that they still own the debt.

Payment to the OC will require the debt collector to update their reporting to show a $0 balance, but it wont compel the debt collector to delete their reporting of the collection. It will just terminate their further collection authority.