7 ms·

Curious how much is attributed to the continued adoption of pay-for-delete (PFD) by these debt buyers/factoring/collection agencies. I noticed the trend start

Curious how much is attributed to the continued adoption of pay-for-delete (PFD) by these debt buyers/factoring/collection agencies. I noticed the trend start in 2018. Midland was one of the first to adopt it, then PRA a few months later. For those unaware, paying a collection account was of little to not benefit for improving your credit score. The negative tradeline(s) would still be present for the typically 7 years (less, depending on type of debt and state in some cases). Put another way, once you were in debt, there was little to no incentive beyond traditional "morals" that these folks would play to for you to pay. That, and legal action, which is still a highly effective source of revenue for these outfits. Most that are sued either ignore legal service, aren't aware of service by publication in obscure notice ads, or don't show up for the designated day in court, awarding a default judgment to the collector. From there, they can garnish, seize, and follow your ass for years, in most cases for a debt they paid pennies on the dollar for in an excel document auction of sorts. In the last few years, most of the debt buyers and collection agencies will delete the negative tradeline when you settle for less or pay in full the amount owed. This was a previously a "one in a hundred" chance you'd see discussed ad nauseum on debtor boards; that is, including a pay-for-delete stipulation in settlement negotiations. If you're in debt, read up on your rights, and how to play the game with these folks. Whether you can pay it easily or not, knowledge in the processes is incredibly valuable.

heavenlyblue 6y ago
Does anyone have an opinion about how that happens in the UK?
Galaxity 6y ago
That was the primary reason I paid off a collection in a lump sum a month ago (the expected significant credit repair from a delete). Sure getting a 1200 dollar stimulus check made it a lot easier to drop a thousand in one go, but if pra wasn't pay for delete I would have saved that in my emergency fund, and either never paid since my credit was already damaged or paid some small monthly payment for the next two years (to not get sued). I suppose the thing to know would be how many people are just paying because they have extra money and just assume paying it consigns it to Oblivion.
- awslattery 6y ago
  congratulations on hopefully becoming one step closer to being debt-free! I've settled nearly ten thousand dollars of debt for far less than what I owed over the years thanks to the introduction of these programs, getting me to a point where I finally had my own credit cards instead of being an authorized user a few years earlier than I would have been able to. It is unfortunate that I had to attribute this ability to pull myself out of dire straits to being rear-ended by a teenager texting, and getting a larger than expected settlement through a referral to an accident attorney from a close friend of mine -- and a lot of teachings from the experience of my father, who dealt with quite a 180 of his financial situation during the great recession. I really can't put into words how much of a relief it was to stop fearing The eventual litigation of most of these debts, having my credit damage for another 7 years into the future, having what wages I was earning at the time garnished... The psychological damage that some of these outfits play too in a way is reprehensible in my opinion.
ramraj07 6y ago
Looks like you gave a lot of information but I'm not getting. Firstly, what is pay for delete? And what are you saying? That you should pay the collectors or that you shouldn't? And I didn't get the 1-in-100 part either. Completely lost!
- fredophile 6y ago
  Pay for delete is a reference to the credit reporting agencies. Basically, you pay the debt collector only if they agree to remove the negative mark from your credit report. Without it you would still have the delinquency showing up on your credit report until it became old enough to drop off (I believe this takes seven years).
- salawat 6y ago
  The idea is, these collectors informed Credit bureaus of the negative tradelines. Now, they come after you to see what they can get. If you pay them back, there is no guarantee that they will inform the credit bureaus you have paid; essentially, leaving that damage on your report until 7 years from their time of reporting elapses. A Pay-For-Delete seems to suggest that you should double check terms you are being offered for an explicit contract clause that binds them to report the resolution of the debt to credit bureaus.
  - johnmichaeltom 6y ago
    The credit bureau will do one of three things. They will show it as paid in full, settled(for a lesser amount than the full balance), or they will remove it(pay for delete). Although the credit bureau will state openly that deletion is not a possibility unless the account is not yours. If the debt is disputed as ”not mine” the collection agency will be contacted to ask for verification of the debt. If the agency says no go ahead and delete it, well you got your “pay for delete.” Keep in mind paying a collection off may not increase you score and in some cases may lower it. Getting it deleted is ideal, but the collection agencies should not be doing this(its in the agreement the collection agency makes with the credit bureau).
- awslattery 6y ago

heavenlyblue 6y ago

Does anyone have an opinion about how that happens in the UK?

Galaxity 6y ago

That was the primary reason I paid off a collection in a lump sum a month ago (the expected significant credit repair from a delete). Sure getting a 1200 dollar stimulus check made it a lot easier to drop a thousand in one go, but if pra wasn't pay for delete I would have saved that in my emergency fund, and either never paid since my credit was already damaged or paid some small monthly payment for the next two years (to not get sued). I suppose the thing to know would be how many people are just paying because they have extra money and just assume paying it consigns it to Oblivion.

awslattery 6y ago
congratulations on hopefully becoming one step closer to being debt-free! I've settled nearly ten thousand dollars of debt for far less than what I owed over the years thanks to the introduction of these programs, getting me to a point where I finally had my own credit cards instead of being an authorized user a few years earlier than I would have been able to. It is unfortunate that I had to attribute this ability to pull myself out of dire straits to being rear-ended by a teenager texting, and getting a larger than expected settlement through a referral to an accident attorney from a close friend of mine -- and a lot of teachings from the experience of my father, who dealt with quite a 180 of his financial situation during the great recession. I really can't put into words how much of a relief it was to stop fearing The eventual litigation of most of these debts, having my credit damage for another 7 years into the future, having what wages I was earning at the time garnished... The psychological damage that some of these outfits play too in a way is reprehensible in my opinion.

ramraj07 6y ago

Looks like you gave a lot of information but I'm not getting. Firstly, what is pay for delete? And what are you saying? That you should pay the collectors or that you shouldn't? And I didn't get the 1-in-100 part either. Completely lost!

fredophile 6y ago
Pay for delete is a reference to the credit reporting agencies. Basically, you pay the debt collector only if they agree to remove the negative mark from your credit report. Without it you would still have the delinquency showing up on your credit report until it became old enough to drop off (I believe this takes seven years).
salawat 6y ago
The idea is, these collectors informed Credit bureaus of the negative tradelines. Now, they come after you to see what they can get. If you pay them back, there is no guarantee that they will inform the credit bureaus you have paid; essentially, leaving that damage on your report until 7 years from their time of reporting elapses. A Pay-For-Delete seems to suggest that you should double check terms you are being offered for an explicit contract clause that binds them to report the resolution of the debt to credit bureaus.
- johnmichaeltom 6y ago
  The credit bureau will do one of three things. They will show it as paid in full, settled(for a lesser amount than the full balance), or they will remove it(pay for delete). Although the credit bureau will state openly that deletion is not a possibility unless the account is not yours. If the debt is disputed as ”not mine” the collection agency will be contacted to ask for verification of the debt. If the agency says no go ahead and delete it, well you got your “pay for delete.” Keep in mind paying a collection off may not increase you score and in some cases may lower it. Getting it deleted is ideal, but the collection agencies should not be doing this(its in the agreement the collection agency makes with the credit bureau).
awslattery 6y ago