Settlement and Lawsuit Threat from Collector

My son was contacted by a credit collection agency today that says it has been trying to get in touch with him for a long time and that they are offering a one time settlement of 1/2 what they say he owes if he pays in full by tomorrow. I called the debt collector who was rude and pushing me to make the payment for my son. As my son has never received anything in writing (his fault for not forwarding address) according to the debt collector, I asked him to email me what he had. He sent me an email on a WPG letter head (can't find anything on them on the internet) with the credit card company name, an account number, owed amount and settlement offer if paid by tomorrow. He did tell my son on the phone they will be filing for a judgment against him tomorrow if he doesn't pay. What should I do?

Comments for Settlement and Lawsuit Threat from Collector

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Aug 24, 2010
dealing with debt collection pressure
by: Gerri & Mary

We think you are right to be leery of settling a debt with a debt collector when you have so little information about the debt - or the collection agency. Do you know:

If the amount is correct?

Whether the debt is outside the statute of limitations?

If the debt collector is legit?

We'd suggest you do a few things. First, of course, is to read our ebook Debt Collection Answers so that you and your son understand his rights in dealing with this collection account. At a minimum, read the first chapter of Debt Collection Answers here for free.

Secondly, call your state attorney general's office and ask whether debt collectors in your state must be registered or licensed. If so, find out if this company is permitted to do business in your state.

If you do decide to settle, follow our instructions in the ebook and get something in writing from the collector clearly stating the terms of the settlement agreement. I personally would not rely on email nor would I feel comfortable sending money to a company I can't even locate! Do some more research to find out if they are legitimate.

As to the lawsuit threat, collectors generally can't just "file a judgment" against a debtor. They typically must file a lawsuit, and the debtor will be notified by summons to appear in court. This is not something that generally happens in a single day. Debts can still often be settled before the lawsuit commences. Read our information on being sued to learn more. (If you are in Minnesota, let us know as things are different there.)

Finally, please make sure you use our
Free Debt Collection Worksheet to keep track of all conversations with this collector.

Please do let us know how this turns out.

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