Worst Way to Respond to a Debt Collection Letter


If you owe money for credit card debt or personal loans, you may be receiving debt collection letters from a collection agency or law firm requesting a Good Faith Payment toward settlement of the account.

These letters often mislead people about the payment terms required by the creditor.

The collection letter may state that your entire balance is past due, while at the same time it offers you a monthly payment plan or other settlement options requiring your good faith payment.

Even worse, these collection agency demand letters usually have a timeframe of between 7 to 30 days for the debtor to enter into a payment arrangement.

Despite the pressure these debt collection letters may put on a consumer to promptly send a good faith payment, extreme caution should be taken before doing so.

In most cases, the worst thing you can do in response to a debt collection letter is to send a payment in “good faith” as demanded by the debt collector.

Good Faith Payment Scam

When the bank calls your entire account balance as due, sending a partial payment does nothing to change the fact that the remaining account balance remains past due.

Further, your good faith payment can be applied to interest and debt collection fees, so your account balance may not decrease at all.

Still worse, after tendering your payment, the collection agency can still sue you or proceed with any lawsuit already filed.

A good faith payment will not prevent entry of a judgment against you in court. Even worse, the payment can be used to prove to the judge that you acknowledge owing the debt.

If you are considering sending a settlement payment to a collection agency, contact our debt defense lawyers for a free consultation today.

We can help you to obtain a written commitment from your bank, to make sure they will honor a reasonable monthly payment plan.

Even better, if a collection agency has taken advantage of you, we can file a claim against them in the courts of Brooklyn, Queens, Manhattan and throughout New York City and Long Island.

Call us for a free debt consultation today.