Alon asked: Can you do something if the creditor responds that the account was sold, but they still reporting negative information?
A: Let’s say you have a credit card account with American Express and you go 90 days without making a payment. At this point AMEX is likely to charge off your account and send it to a collection agency.
AMEX should report your account as charged off (code I9) and show a $0 balance, while the new collection (also I9) will report their new balance (with their fees, interest and penalties included). They should also show your DLA, or date of last activity, as the last date you made your last payment or the first dunning letter was sent to you.
So the question here is how to minimize the damage, right? Both are within their rights to report as stated above. Both the creditor and collection agency have a contractual, not legal, obligation to report accurately. It should also be mentioned that neither is required to report at all.
Your best window of opportunity is the first 30 days. In that first 30 you can make an arrangement with AMEX to pay them directly if they take the account back from the collection agency. The result will be the removal of the collection agency’s remark.
If not, then you can request the collection agency provide proof the debt is yours and they are authorized to collect it. Considering some of the shady tactics collection agencies use, you would be within your rights to ask for proof. I’ve seen 3 or 4 agencies try to collect the same debt from a client. If the agency fails to provide proof, then the remark will be removed.
If both are reporting accurately, and you don’t have the funds to negotiate a deal, then the remarks will stay as they are reported.
I’d recommend you save up to make an offer in exchange for the agency not reporting. Again, they’re not legally obligated to report anything at all.
