Lumping It

Lorenzo has a credit card debt he hasn't paid on in about two years. The debt has been sold multiple times. How does he know the company the debt was sold to is legit?

QUESTION: Lorenzo in Los Angeles has a credit card debt he hasn’t paid on in about two years. The debt has been sold multiple times. How does he know the company the debt was sold to is legit?

ANSWER: They probably are. It’s normal on bad credit card debt that’s this far in default—two years old—that it would be sold, and they’ve sold it for pennies on the dollar. The best way to solve it, Lorenzo, is to do it in a lump sum—not a payment.

I would probably offer them . . . They probably have a lot more than $1,000 showing now because they’ve added interest and late charges and other stuff to it, right? Why don’t we go back to the original amount of $400 and offer them $400 cash to settle it? If they accept that offer, get it in writing. Do not give them any money until you get it in writing. Once you get it in writing, then send them the $400 and do not allow them to have electronic access to your checking account.

If you do that, that’s the best way to settle it and get rid of it. The fact that they sold it doesn’t mean you don’t have to pay it.