If you have Portfolio Recovery on the phone or on your credit report, one of your debts has been sent to collections. This is a situation you need to deal with: they won’t just go away. Here’s how you can resolve the account and put your credit back in order.

What is Portfolio Recovery Associates LLC?

You breathed a cautious sigh of relief, hoping they finally gave up on you.

Well, they sort of did.

Unfortunately, that doesn’t mean you’re off the hook. If a creditor isn’t getting anywhere with trying to collect a debt, they eventually “charge it off”.

And what does that mean?

It means they sell the debt to a collection agency. They get some money for their trouble, and the collection agency becomes responsible for getting payment.

That’s what Portfolio Recovery or Portfolio Recovery Associates LLC is: they are a collections agency.

They’ve paid money to buy your debt, and you better believe they’ll try their hardest to make you pay so they can turn a profit.

Portfolio Recovery often buys debt from Capital One, Comenity Bank, and others.

Here’s What You Can Do

New Federal debt collection regulations took effect on Nov. 30, 2021. The new rules will have a far-reaching impact on the debt collection industry. If you have delinquent debts or accounts in collection, these rules will affect you.

Learn more about Regulation F and what will it mean for consumers with debts.

If you’re hearing from Portfolio Recovery – or any collection agency – there are things that you can (and should) do. There are also two things that you should not do:

• Don’t panic. It won’t help.
• Don’t ignore the situation. That won’t help, either. They won’t go away.

That’s what you shouldn’t do, but what should you do?

Here’s where to start.

1. Know Your Rights

The Fair Debt Collection Practices Act (FDCPA) spells out the rights of debtors and the obligations of debt collectors. Here are some key points.

• A debt collector cannot call you before 8AM or after 9PM.
• A debt collector cannot call your place of employment.
• If you have a lawyer, the collector must communicate with your lawyer.
• A debt collector may not communicate with your friends or family members or tell them about your debts.
• Debt collectors cannot threaten to harm you, your reputation, or your property or use profane language.
• Debt collectors must identify themselves and the company they represent. They cannot claim to be law enforcement or other officials.
• A debt collector cannot threaten you with imprisonment or seizure of assets.

For a full review of your rights under the FDCPA, see this summary from the Consumer Financial Protection Bureau (CFPB).

If you believe that a debt collector is violating the rules, you can report them to the FTC, the CFPB, and your state’s attorney general.

2. Validate and Verify the Debt

Under the new regulations that came into effect on Nov. 30, 2021, debt collectors must send you a Notice of Debt within 5 days of their first contact with you. This notice must contain much more information than the notices that collectors sent under prior rules.

If the notice is incomplete, it is invalid, and the debt isn’t collectible. That makes it important to know what’s required.

A valid Notice of Debt must contain an itemization date. This can be one of five different dates.

• The date of the last statement or invoice provided to the consumer by the creditor.
• The charge-off date.
• The date of the last payment applied to the debt.
• The date of the transaction that gave rise to the debt.
• The judgment date, if there is court judgment on the debt.

This date will help you establish whether the Statute of Limitations on the debt has expired and when it will drop off your credit report.

The Notice of Debt must also contain extensive information about the debt:

• The debt collector’s name and mailing address.
• The consumer’s full name and mailing address.
• If the debt is related to a financial product (like a loan or credit card), the notice must contain the name of the creditor to whom the debt was owed on the itemization date.
• The account number associated with the debt.
• The name of the creditor to which the debt is currently owed.
• The amount of the current debt and an itemized list of any payments made and added fees, interest, or other charges.

The Notice of Debt must contain a statement advising you of your rights under the Fair Debt Collection Practices Act (FCPA), including a statement that you have the right to dispute the debt within 30 days of receiving the letter.

The notice must also contain a returnable form allowing you to declare that you are disputing the debt and allowing you to select one of three reasons for a dispute:

• This is not my debt.
• The amount is wrong.
• Other (you will need to supply additional information.)

The CFPB has published a sample Notice of Debt that will help you determine whether the one you receive is complete.

Why It’s Important

Many debt collectors who purchased debts before the new regulations came into effect will not have the required information. They may not be able to get it from the original creditor. They may still try to bluff or intimidate you into paying them or admitting that the debt is yours.

If you receive a Notice of Debt, examine it in detail to make sure it complies with the law. If it doesn’t, inform the collector that you will not discuss the debt until you receive a Notice of Debt that complies with Regulation F.

Always Dispute the Debt

If you do not dispute the debt within 30 days, it is presumed valid. Always dispute debts held by collection companies.

If you are using a dispute or debt validation letter template, be sure that the template is designed for notices received after the implementation of Regulation F on Nov. 20, 2021. Much of the information that debtors used to ask for is now required in the Notice of Debt.

Send the debt collector a certified letter addressing these issues.

• Ask for documentation that verifies that you owe the debt, such as a copy of the original contract.
• Ask whether the statute of limitations on the debt has expired. The collector doesn’t have to tell you, but they can’t lie. If they won’t say, the statute of limitations may have expired.
• Ask whether the agency is licensed to collect debt in your state. Again, the collector is not allowed to lie. You can ask for the date of the license, the license number, and the state agency that issued the license as well.
• A copy of the last billing statement sent by the original creditor.

Send the letter to Portfolio Recovery by certified mail.

Once you receive the debt validation letter, you have 30 days to send your debt dispute letter.

Remember that even if you know the debt is yours, the more important issue is whether they know it’s yours.

Because guess what?

If they can’t prove it’s yours, they can’t collect it or report it to the credit bureaus.

They might not be able to come up with that proof.  Remember, Portfolio Recovery purchased your debt, in bulk, with a bunch of other debt, from the original creditor.

Who knows what was lost in the shuffle?

The onus is on them to provide proof. If they can’t, they’re required by law to remove it from your credit report.

Remember the Statute of Limitations

Always check the date of the debt against the statute of limitations in your state. If the statute of limitations has expired, the collector cannot pursue legal action against you.

The statute of limitations clock begins on the date when the debt was first reported as delinquent.

Remember that making a payment or acknowledging that the debt is yours can restart the statute of limitations.

The expiry of the statute of limitations will not remove an account from your credit record. If the statute of limitations has expired or will expire soon, there’s a good chance that the seven-year period of appearance on your credit record is also nearly up.

If the statute of limitations is nearly up, your best bet might be to just wait it out.

3. Stop Calls from Portfolio Recovery NOW

Before Nov. 20, 2021, you could get as many as 15 calls per day from a debt collector, according to a Consumer Credit Card Market Report.

That’s way too many.

That has changed. Regulation F places strict limits on collection calls.

• A debt collector cannot call you more than seven times within seven consecutive days.
• If a debt collector speaks to you on the phone, they must wait seven days before calling again.

Debt collectors can now contact you by email and text message as well, but you can tell them how they are permitted to contact you and when.

You can stop all communication from a debt collector.

Follow these simple steps to stop the calls.

1. Write a “stop contact” or “cease” letter telling them to stop contacting you.
2. Make a copy for yourself and mail the original to Portfolio Recovery.
3. To prove you sent the letter, send it by certified mail with “return receipt requested.”

Make sure you follow these exact steps.

If you do, the National Consumer Law Center states, “the collector can only acknowledge the letter and notify you about legal steps the collector may take.”

When you stop the phone calls, you get some breathing room. Remember that you still owe the debt, and the collector can take legal action.

Then you can tackle the next step.

4. Contest the Debt With the Credit Bureaus

If you believe that you do not owe the debt or that the collection agency has failed to validate the debt, you can file a dispute with the credit bureaus. You will need to dispute the account separately with each credit bureau.

Credit Reporting Bureau Mailing Addresses

You can also dispute it online:

• Equifax
• Experian
• TransUnion

The credit bureau must investigate and verify your debt. If they cannot, they must remove it from your credit record.

Remember that even if the debt is removed from your credit record, the collection agency can still pursue collection efforts.

Get Your FREE Credit Dispute Letter Template

Get our winning dispute letter, plus free tips to help you boost your credit.

Download Now!

5. Settle With A Pay For Delete Agreement

While occasionally, the collection debt isn’t yours, most of the time, it is. If that’s the case, a settlement is one way to resolve the situation.

Remember that debt collectors pay, on average, 4 cents for every dollar of debt that they buy. That gives you room to negotiate. A collector can accept less than you owe and still make a profit.

An article from U.S. News & World Report found that collection agencies will settle for between 40-60% of the balance – which could mean thousands of dollars saved.

You might offer 10% of your balance to see what they say.

They’ll probably ask for more, but don’t let them push you around. With a little negotiation, you can reach an agreement you’re comfortable with.

Pay for Delete

A collection agency may agree to remove your account from your credit record if you settle your debt. This is a “pay for delete” arrangement.

When you discuss a settlement, ask the collection agency representative if they will delete your record if you pay. Send a formal “pay for delete letter” to confirm the arrangement and ask for a written commitment.

Remember that you cannot compel a credit bureau to remove a legitimate account from your record. It will be recorded as paid, but it may remain on your credit report for seven years from the date when the account first became delinquent.

A pay-for-delete arrangement is a gamble. It may not work, but it’s worth trying. If they accept the settlement you will no longer have to deal with the collection agency, and that’s a big plus.

Get Your FREE Pay for Delete Letter Template

After much testing, we have put written a great pay to delete letter you can use to get started.

Download Now!

Hire A Credit Repair Company

If you don’t want to go through all the trouble of writing letters and negotiating with Portfolio Recovery on the phone, consider hiring a credit repair company to help.

A credit repair company is equipped to deal with aggressive debt collectors to help you get the best possible outcome.

The credit repair industry has earned a terrible reputation, and you’ll have to look out for disreputable companies and credit repair scams. There are still some companies that are legitimate and helpful.

Choosing to work with an expert sooner rather than later can save you a lot of time and money in the long run.

Get Professional Help

We analyzed 21 credit repair companies based on price, service, and results and picked our top three choices.

Best Credit Repair Companies

Then you can sit back and relax while the credit pros do all the work.

If you’d rather do it yourself, that’s okay, too.

What If They Sue?

Collection agencies will take you to court, sometimes over quite small amounts. If a debt collector sues you, don’t ignore the case.

If you don’t respond, the judge will probably issue a summary judgment against you. You will be ordered to repay the debt. If you don’t, your wages could be garnished. In some states, your assets could be seized.

Not all companies will exercise their right to file a lawsuit against you, but a lawsuit is always a possibility when dealing with an aggressive debt collector.

Important! Read up on what to do if you get sued by a debt collector to make sure you take all the right steps.

Free Yourself From Portfolio Recovery

Debt collectors will not go away on their own. They will keep harassing you, and you might end up in court. Running away is not an option.

Instead, take the initiative. Learn how to communicate with debt collectors and know your rights. You can control the process and the situation if you’re aware and proactive.

It’s not going to be a pleasant experience, but it will be a better experience if you’re in the driver’s seat!

The post How to Delete Portfolio Recovery From Your Life appeared first on FinMasters.

Have you ever filed for bankruptcy?

It’s nothing to be ashamed of.

From 2005 to 2017, approximately 12.8 million US consumers filed for bankruptcy. If you were one of them, you’re not alone.

In some situations, bankruptcy is the only viable option for getting your financial situation under control. That doesn’t mean it’s a free ride. Your credit will take a serious hit, and a Chapter 7 bankruptcy – the most common kind – will stay on your credit report for 10 years.

That’s not easy to face, but you’re not helpless either.

How Long Will A Bankruptcy Stay On My Credit Report?

Ouch.

I probably don’t have to spell out that this is bad news for your credit score. The impact lessens over time, but the first few years following a bankruptcy can be rough.

Before you go down a rabbit hole googling things like “Can Lexington Law remove bankruptcy?”, let me clarify something:

You can’t magically delete a legitimate bankruptcy from your credit report.

The good news?

You can reduce and eventually minimize the impact and rescue your credit score.

Start With Your Credit Report

Everything we’ve discussed so far applies to people with legitimate bankruptcies on their credit reports. In those situations, you can’t erase bankruptcy, just take steps to minimize its impact.

But we know credit reporting errors are pretty common.

There are people walking among us with bankruptcy on their credit report that doesn’t belong to them.

Talk about a kick in the face!

There are also people still being plagued by old bankruptcies that should have fallen off their reports already.

Protect your credit score by regularly reviewing your report for inaccuracies.

The first step toward building better credit is to get your credit reports regularly and read them carefully. If you don’t understand what you’re seeing, check out this guide to understanding a credit report.

If you find something that you don’t think should be there, you’ll need to dispute that record on your credit report.

If Your Bankruptcy Is Legit

If that bankruptcy is really yours and the record is accurate, don’t waste your time trying to get it removed. No matter what anyone promises you, it’s not coming off.

That doesn’t mean your credit is ruined forever.

Time Heals All Wounds

A bankruptcy stays on your credit report for seven to ten years, but its impact on your credit score changes drastically during that time.

Credit scoring models prioritize newer information: creditors want to know what you’re doing now, not what you did years ago.

If you’ve just emerged from bankruptcy, most of your debts have probably been discharged. You have a clean slate to deal with. Your job is to fill it with positive records that will build your credit score as the impact of your bankruptcy fades.

There’s one obstacle to that process: it’s not so easy to get new credit lines when your credit score has been trashed by bankruptcy. Here’s how you can overcome that obstacle.

Become an Authorized User

If you have a friend or family member with good credit, ask them to add you as an authorized user on one of their credit cards. This is a simple process, and you don’t need to use the card or even hold the card.

As long as the issuer reports authorized user activity to the credit bureaus (most major issuers do, but you’ll want to check before getting added), the primary user’s credit history will go on your record. That’s a step in the right direction.

Hook Yourself Up with a Secured Credit Card

There’s only so much that authorized user status can do for your credit. After all, potential creditors will know that you’re not the one using the card. You need to show that you have your financial life under control.

A secured credit card can help.

You’ll put down a deposit, which will become your credit limit. Your deposit protects the card issuer from loss, so issuers are willing to give these cards to people with badly damaged credit, including those with bankruptcy on their record.

To use a secured card to build credit, you’ll need to do two things.

• Make every payment on time
• Keep your credit utilization low

Your credit limit will be low, so keeping credit utilization down is a challenge. One way to do this is to put a single recurring expense – like your internet bill or Netflix account – on the credit card. Set up an automatic payment from your checking account, put the card away, and use cash or a debit card for everything else.

Your card will be active, every payment will be made on time, your credit utilization will stay low, and you’ll never pay a dime in interest.

If you manage a secure credit card effectively, it can make a significant contribution to your credit record. Many issuers will even upgrade you to a regular card if you handle your secured card well.

Quick Tip: Avoid the minimum payment trap! Keep your balance low and pay it off in full every month. Many secured cards carry high interest rates, and you don’t want to back yourself into a corner.

Take Matters Into Your Own Hands With a Credit Builder Loan

Ok, so say you’ve got your secured credit card. Great job!

What else can you do to salvage your credit score post-bankruptcy?

A credit builder loan can help you build a better credit mix and establish a strong payment history.

Here’s how it works:

• You and the lender agree on a loan amount and a term.
• You pay a small deposit to get the ball rolling, and the lender stashes it away for you.
• You make regular monthly payments for the term, and the lender saves up those payments.
• The lender reports your payments to the three credit bureaus.
• When the term is up, and you’ve paid the agreed amount, you get your money back, less any interest or fees.

Most credit builder loans use relatively small amounts, so it’s easy to make on-time payments. You’ll build your payment history, and having an installment loan on your record will improve your credit mix: credit scoring models reward you for having both revolving and installment credit.

Check out this list of top credit builder loans.

Get Credit For Bills You Already Pay

There are multiple services that will report your regular bill payments to the credit bureaus. Not all credit scoring models take these records into account, but they can’t hurt. Check out rent reporting services and utility reporting services like Experian Boost and eCredable Lift.

Keep Going

Don’t try to add too many new credit lines at once. Be sure that you are stable and making payments on time before adding new accounts. Handling your existing accounts well is more important than adding new ones!

Remember that you don’t need to pay to build credit. You can build credit for free!

Final Thoughts

You can’t snap your fingers and erase a bankruptcy from your credit report.

The impact of that bankruptcy will fade with time, and you can reduce it by adding current accounts and managing them well!

The post How to Remove A Bankruptcy from Your Credit Report appeared first on FinMasters.