Quote Quoting azlegal3
View Post
I found out today that it's going to cost $37 to file an answer form in response to the Default action that was filed against me. Rather than waste more money, would it make sense if I skip filing a response and contact the prosecuting law firm right away to negotiate a settlement??

BTW, I haven't had time to get copies of the case file yet. For now, I'm just wondering if I would be better off by contacting the law firm to make a settlement, and skip filing a response?

Thanks again.
I would bet that the lawyer and collections agency either do not respond, or respond but wait until the response period for the default judgement expires before they agree to any kind of settlement. If you don't file a response they will get a default judgement, that will add another major negative to your credit report, they will then likely garnish your wages until the debt is paid. You need to file the response before that 10 day period runs out, or else there is no way the will even consider talking to you.

The collections agencies preferences are likely in this order
1.) Get a default judgement and not have to worry about collecting/negotiating
2.) Get full payment from you without going to court.
3.) and 4.) Settle for partial payment without going to court or Go to court and get a judgement

The order of 3 and 4 will vary based on the documentation they have, and the additional pay due to the law firm for going to court. As Tobias_Research mentioned the #1 priority needs to be stopping the default judgement

- - - Updated - - -

Quote Quoting adjusterjack
View Post
Once you settle with the collection agency, the entry will change from collection account to something like "was collection account, now paid" which is less negative.

If the default judgment gets entered it will also show up on your credit report until you pay it. Once you pay it, the entry is updated to show that the judgment was satisfied. Again, a less negative entry.

Creditors are contractually bound by the credit bureaus to follow those rules or they lose their access to the credit bureaus, effectively putting them out of business. So don't believe anything you hear about things getting removed from credit reports.
As a note (not to you AdjusterJack, as I am sure you know this, but to others)

"Less Negative" is a subjective term, as far as FICO scores go there is no difference between paid and unpaid collections accounts. However creditors underwriters are free to view the information as they wish, and many do view it more positively.

Also while the collection agencies are contractually obligated to report accounts factually (including not removing them) There are definitely less legitimate agencies that will offer "Pay for Delete" options when asked.