A debt collector will not allow me to pay a debt, what steps should I take?
This may not apply in your particular situation, but I think it's important to mention: When a debt collector doesn't act like a debt collector, it may be because they aren't actually a debt collector. It's certainly strange that someone called you to collect money from you, and when you asked for a simple document, they not only got off the phone quickly but they also told you the debt would be cancelled. That just doesn't make sense: Why would they cancel the debt? Why wouldn't they send you the document? My initial impression is that you were possibly being scammed. The scam can take on many forms: Whenever you are called by a debt collector (or someone pretending to be one), it's a good idea to verify their identity first. More info here. What you are describing here is the opposite of a problem: You're trying to contact a debt-collector to pay them money, but THEY'RE ignoring YOU and won't return your calls!  LOL!  All joking aside, having 'incidental' charges show up as negative marks on your credit history is an annoyance- thankfully you're not the first to deal with such problems, and there are processes in place to remedy the situation. Contact the credit bureau(s) on which the debt is listed, and file a petition to have it removed from your history.  If everything that you say here is true, then it should be relatively easy. Edit: See here for Equifax's dispute resolution process- it sounds like you've already completed the first two steps. "You say your primary goal is to clean up your credit report, and you're willing to spend some cash to do it.   OK.  But beware: the law in this area is a funhouse mirror, everything works upside down and backwards. To start, let's be clear: Credit reports are not extortion to force you into paying. They are a historical record of your creditworthiness, and almost impossible to fix without altering history.  Paying on this debt will affirm the old data was correct, and glue it to your report.  Here's how credit reporting works for R-9 (sent to collections) amounts.  The data is on your credit report for 7 years.  The danger is in this clock being restarted.  What will not restart the clock?  Ignoring the debt, talking casusally to collectors, and the debt being sold from one collector to another.  What will restart the clock? Acknowledging the debt formally, court judgment, paying the debt, or paying on the debt (obviously, paying acknowledges the debt.)  Crazy!  You could have a debt that's over 7 years old, pay it because you're a decent person, and BOOM! Clock restarts and 7 more years of bad luck.  Even worse-- if they write-off or forgive any part of the debt, that's income and you'll need to pay income tax on it.  Ugh!  Like I say, the only way to remove a bad mark is to alter history. Simple fact:   The collector doesn't care about your bad credit mark; he wants money. And it costs a lot of money, time and/or stress for both of you to demand they research it, negotiate, play phone-tag, and ultimately go to court.  So this works very well (this is just the guts, you have to add all the who, what, where, signature block, formalities etc.):   1 Company and Customer absolutely disagree as to whether Customer owes   Company this debt: (explicitly named debt with numbers and amount) 2 But Company and Customer both eagerly agree that the expense, time, and   stress of research, negotiation, and litigation is burdensome for both of us.    We both strongly desire a quick, final and no-fault solution.  Therefore:  3 Parties agree Customer shall pay Company (acceptable fraction here).    Payment within 30 days.  To be acknowledged in writing by Company.  4 This shall be absolute and final resolution.  5 NO-FAULT.  Parties agree this settlement resolves the matter in good faith.   Parties agree this settlement is done for practical reasons, this bill has not been established as a valid debt, and any difference between billed and settled amount is not a canceled nor forgiven debt.  6 Neither party nor its assigns will make any adverse statements to third parties relating to this bill or agreement.  Parties agree they have a continuous duty to remove adverse statements, and agree to do so within seven days of request.  7 Parties specifically agree no adverse mark nor any mark of any kind shall be placed on Customer's credit report; and in the event such a mark appears, Parties will disavow it continuously.  Parties agree that a good credit report has a monetary value and specific impacts on a customer's life.  8 Jurisdiction of law shall be where the effects are felt, and that shall be (place of service) regarding the amounts of the bill proper.  Severable, inseparable, counterparts, witness, signature lines blah blah. A collector is gonna sign this because it's free money and it's not tricky.  What does this do?  1, 2 and 5 alter history to make the debt never have existed in the first place.  To do this, it must formally answer the question of why the heck would you pay a debt that isn't real and you don't owe: out of sheer practicality; it's cheaper than Rogaine.  This is your ""get out of jail free"" card both with the credit bureaus and the IRS.   Of course, 3 gives the creditor motivation to go along with it.  6 says they can't burn your credit. 7 says it again and they're agreeing you can sue for cash money.  8 lets you pick the court.  The collector won't get hung up on any of these since he can easily remove the bad mark. (don't be mad that they won't do it ""for free"", that's what 3 is for.)  The key to getting them to take a settlement is to be reasonable and fair.  Make sure the agreement works for them too.  6 says you can't badmouth them on social media. 4 and 5 says it can't be used against them. 8 throws them a bone by letting them sue in their home court for the bill they just settled (a right they already had).  If it's medical, add ""HIPAA does not apply to this document"" to save them a ton of paperwork.  Make it easy for them. You want the collector to take it to his boss and say ""this is pretty good. Do it.""  Don't send the money until their signed copy is in your hands.  Then send promptly with an SASE for the receipt.  Make it easy for them.  This is on you.  As far as ""getting them to send you an offer"", creditors are reluctant to mail things especially to people they don't think will pay, because it costs them money to write and send.  So you may need to be proactive about running them down with your offer.  Like I say, it's a funhouse mirror." "This is somewhat unbelievable.  I mean if you had a business of collecting debts, wouldn't you want to collect said debts?  Rather than attempting to browbeat people with these delinquent debts into paying, you have someone volunteering to pay.  Would you want to service that client?  This would not happen in just about any other industry, but such is the lunacy of debt collecting. The big question is why do you need this cleared off your credit?  If it is just for a credit score, it probably is not as important as your more recent entries.  I would just wait it out, until 7 years has passed, and you can then write the reporting agencies to remove it from your credit. If you are attempting to buy a home or similarly large purpose and the mortgage company is insisting that you deal with this, then I would do the following: Write the company to address the issue.  This has to be certified/return receipt requested.  If they respond, pay it and insist that it be marked as paid in full on your credit.  I would do this with a money order or cashiers check.  Done. Dispute the charge with the credit reporting agencies, providing the documentation of no response.  This should remove the item from your credit. Provide this documentation to the mortgage broker.  This should remove any hangup they might have. Optional:  Sue the company in small claims court.  This will take a bit of time and money, but it should yield a profit.  There was a post on here a few days ago about how to do this.  Make part of any settlement to have your name cleared of the debt. It is counterproductive to fall into the trap of the pursuit of a perfect credit score.  A person with a 750 often receives the same rate options as a person with 850.  Also your relationship with a particular lender could trump your credit score. Currently I am ""enjoying"" the highest credit score of my life, over 820.  Do you know how I did it?  I got out of debt (including paying off the mortgage) and I have no intentions of ever going into debt for anything.  So why does it matter?  It is a bit ridiculous." This doesn't seem to explain the odd behavior of the collector, but I wanted to point out that the debt collector might not actually own the debt. If this is the case then your creditor is still the original institution, and the collector may or may not be allowed to actually collect. Contact the original creditor and ask how you can pay off the debt. Send a well-documented payment to the original creditor.  Do it in such a way that you would have the ability to prove that you sent a payment if they reject it.  Should they reject it, demonstrate that to the credit reporting bureaus.
First, read my answer here: Oversimplify it for me: the correct order of investing For me, the answer to your question comes down to how badly you want to get rid of your student loan debt. I recommend that you get rid of it as fast as possible, and that you sacrifice a little in your budget temporarily to make that happen. If that is what you want, here is what I would do. Following the steps in my other answer, I would pay off the student loans first. Cash out your non-retirement growth fund to jump start that, then challenge yourself to take as much of your paycheck as you can and throw it at the debt. Figure out how many months it will take before the debt is gone.  Once the debt is gone, you won't have those monthly payments anymore and you won't be continually losing money in interest to the bank. At that point, you can build up your cash savings, invest in your employer's 401(k) plan for retirement, and start saving toward other long-term saving goals (car, house, etc.) To address some of your other concerns: If you cash out the non-retirement fund, you'll probably owe some capital gains tax. (Although, on a $3k investment, the long term rate won't add up to very much, depending on your tax bracket and cost basis.) You can't use the money from your non-retirement fund to invest in your 401(k).  You can only contribute to your 401(k) via payroll deduction.  To explicitly answer your question, your non-retirement fund is not bound by the limitations of retirement funds, meaning that you can cash it out and use it however you like without penalty, only paying perhaps a few hundred dollars of capital gains tax at tax time next year. Think of it as another source of cash for you. "I would accept the offer provided that it is a BONA FIDE offer. Some issues to consider: 1) Make sure the debt is actually yours. 2) Make sure that there is a meaningful period of time left on the statute of limitations (10 years). Because if this ""settlement"" doesn't work, the clock goes back to time zero for the debt, minus the amount you paid. In other words, don't pay off a debt ""by the end of the month"" that will expire on the fifteenth. 3) I'm not a lawyer, and therefore, in your shoes, I would consider consulting a lawyer. 4) If using a lawyer isn't cost effective, then I would set up an escrow account, deposit the settlement amount, and then release it upon receipt of a letter that says that the amount in escrow fully satisfies the debt. Such a letter will help your record with credit agencies. It will also establish a record that you've paid, and paid in full. Based on what you've said about the original letter, the debt collector would be willing to do this. If he reneges, he's ""playing games.""" "There are two things I would like to add. By no means am I an expert on this, so please call me out if you spot a mistake.  &gt; Economic contraction scared people. So instead of continuing making promises, they started paying off the promises they had  Every true.... **expect** this didn't cause the ball to stop rolling so much as it stopped the ball from rolling a little sooner than it otherwise would have.  As pointed out in the comments above, money is debt and with debt (in the system we've chosen to adopt) comes interest. That means that new money **must** be created in order for old money to be repaid. Which leads to a need for perpetual growth. And perpetual growth is unsustainable. Pure and simple, it doesn't exist.  So yeah, people got a fright and that put the brakes on the economy, but it was going to happen eventually.  &gt; People paying off debt is fine so long as there is sill money for services, and people paying for service is fine *so long as they don't rack up more debt than they can pay*.  As explained above, this is a fallacy because our monetary system literally requires that people aren't responsible when it comes to debt. Eventually we'll get to a stage the vast majority of people have taken on as much debt as they can logically support, at which point they would need to take on even more debt in order to service the debt that already exists. It's either that or the money supply contracts and you have a recession.  It always disgusts me when I hear people saying things like ""they should known better"" or ""this is what you get for not handling your finances correctly"" when describing people that get into debt issues. The system literally depends on people acting like idiots and taking on more debt than they can support.  It's also a reason why you can't really blame Wall Street for what happened - even though they did some messed up things, they were just playing by the rules of the game." "Sue the debt collectors in small claims court.   There are several example stories around the internet, but this is a well written one from the consumerist. If your phone is a cell phone: ""it  is against the law for a company to  leave a pre-recorded message on your  cell phone."" In fact, the call frequency increased   once they realized they had reached a   live person. I called each of these   companies multiple times, and though I   was given assurances each time that my   number would be taken off of their   lists, the calls continued, morning,   noon and night. At my wits end, I   decided the only way to have the   harassing calls stop was to file suits   against the collection companies. It's   very important to understand that it   is against the law for a company to   leave a pre-recorded message on your   cell phone. Armed with this knowledge,   I filed suit against several of the   collection companies. I filed in small   claims court so I did not need to hire   an attorney, and the process was as   simple as completing a paragraph on a   complaint form. For evidence, I had   over a hundred Google Voicemail   transcripts showing the times the   companies called and the text of the   pre-recorded messages. Mysteriously, the calls all stopped   immediately on the same date the   collection companies received the   certified letters stating they were   being sued. Then a new flurry of calls   began pouring in. This time it was   their attorneys. The attorneys representing these out   of state collection companies were all   desperate to settle out of court. hey   did not want to incur the expense of   traveling for court or hiring a local   law firm who wasn't on retainer. They   also understood they had no   justifiable defense for the calls. To   make a long story short, so far I have   successfully sued 3 of these   collection companies and settled for   more than $5,000 out of court. All it   cost me was $35 and 20 minutes per   suit. Making these companies pay is the only   incentive for them to stop their   illegal and harassing practices. If   more consumers knew their rights and   actually took a few minutes to stand   up for them, it would become less   profitable for these companies to   conduct business the way they do now. -Source And whether you have a cell phone or land line,  It is illegal for the debt collectors to tell you they are calling to collect a debt for someone else under the Fair Debt Collection Practices Act (wikipedia, ftc docs). What Remedies Are Available If The   Debt Collector Violates The Law Under   the Fair Debt Collection Practices   Act, you have the right to sue a debt   collector in state or federal court   within one year from the date of the   violation. If you win, you may recover   damages in the amount of any losses   you suffered as a result of the   violation, plus an additional amount   of up to $1,000.00. You may also be   able to recover court costs and   attorney fees. If the same debt collector has engaged   in unlawful conduct with a number of   consumers, it may be possible to find   a lawyer who will file a class action   lawsuit. -Source With regard to whether you can sue under FDCPA if you are not the debtor, one FDCPA lawyer (take with grain of salt) says yes: Did you know that it doesn't matter if   you owe the account the debt collector   is calling you about or not? If a debt   collector violates the FDCPA (the   federal Fair Debt Collection Practices   Act, 15 USC 1692 et. seq.) that debt   collector could be liable to pay you   statutory damages, actual damages,   attorney's fees, and court costs. -Source" On the off chance that your indebted person is unwilling to pay and you know they have the methods, it's a great opportunity to utilize your neighborhood sheriff. You have three alternatives to gather: a bank exact, wage garnishment, or a land lien.  It sounds like you'll have to contact your nearby police/sheriff's specialty and they can additionally enable you to out and get you your cash. His credit is likely impacted already for the fact it's in collection. My real concern is that he be 100% certain the debt collector actually has ownership of the debt. At first glance this sounds like it may be a scam, but if the debt was written off, it may have been sold for pennies on the dollar. So to the collector 20% of face value is a tidy profit. If you have both consumer debt and IRS debt, you can file Chapter 7 bankruptcy to get rid of all of it. The trick is your taxes have to be at least 3 years old from the due date in order to be considered for bankruptcy. So newer taxes, like 2010 and on, can't be discharged yet (and earlier ones may not be yet, there are rules which toll the time) You'll definitely want to talk to a bankruptcy attorney in your area who focusing on discharge in tax debts. You may be able to kill two birds with one stone.  My other concern is are you current? Typically people routinely run up a new debt when trying to settle up on 9old debt. So the OIC route may be a waste of your time. Also, $6000 isn't a lot of money, so there's not a lot of room to negotiate down. It's all how you fill out the 656-OIC. I've seen way to many people not fill it out incorrectly.  The IRS has a limited amount of time to collect on a debt, so if there are old taxes, you may be better off getting into CNC status, which it seems like you would qualify for and let the debt expire on your own. That may be another viable solution. Unfortunately, this is really complicated to get the best result. And good tax debt attorneys fees start at the amount of taxes you owe! So that's not really cost effective to hire one. Another option, not yet discussed here, is to allow the loan to go into default and let the loaning agency repossess the property the loan was used for, after which they sell it and that sale should discharge some significant portion of the loan. Knowing where the friend and property is, you may be able to help them carry out the repossession by providing them information. Meanwhile, your credit will take a significant hit, but unless your name is on the deed/title of the property then you have little claim that the property is yours just because you're paying the loan. The contract you signed for the loan is not going to be easily bypassed with a lawsuit of any sort, so unless you can produce another contract between you and your friend it's unlikely that you can even sue them. In short, you have no claim to the property, but the loaning agency does - perhaps that's the only way to avoid paying most of the debt, but you do trade some of your credit for it. Hopefully you understand that what you loaned wasn't money, but your credit score and earning potential, and that you will be more careful who you choose to lend this to in the future.