Recommended Payment Methods For Paying Off A Debt Settlement Offer
Before you pay a settlement offer, make sure you obtain the offer in writing from the debt collection agency or creditor, plus a statement or zero balance letter which clearly shows that the debt has been 100 percent settled and you don’t owe them anymore. The black and white documentation is there to avoid having it come back to haunt you again later.
Also, do some research on the collection agency to ensure that they are a large, well-known company before you forward them any money.
Paying off the outstanding amount will get you out of the hassles of the debt. The record of the bad debt will remain in your credit report for up to 7 years but the status will show as “settled” instead of “non-paid” or “unpaid”. Although your credit score isn’t immediately helped by this particular payment, your credit rating should improve and go back to normal in the long run as you pay your new or outstanding bills on time.
If you delay in paying them, the collection agency can continue to make inquiries on your credit report and this will negatively impact your credit score. The collection agency might also attempt to find you at work, at home, through relatives or neighbors. So, I highly recommend you settle the balance in full as soon as possible.
There are 2 kinds of payment methods you can use in settling the debt:
- Money Order, or Cashier’s Check. Remember to make copies for your safekeeping.
- Electronic Funds Transfer.
In the case of money order (or any form of paper payment), send it via certified mail or FedEx, and include the debt settlement offer hard copy. This way, you’ll be able to track the shipment and avoid the possibility of it getting lost in the mail. Also, their signature is required on receipt and will act as proof of delivery.
My preferred route, and the safest, is paying via electronic funds. Paying electronically allows you to make the payment by the deadline. Although extremely rare, the collection agency might, in error, debit your account for more than the accepted settlement amount. If this happens, quickly contact them and get them to remedy the situation. If they dispute the amount, simply refer them to the settlement offer and zero balance letter that you have already obtained from them.
As a final step, check with the debt collection agency for an official receipt or statement that will be the final proof of payment.
Related
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