I have a few questions in regards to collections. I have recently received a call from NorDon Collections and they want me to pay them $10000 because of a line of credit from Scotia Bank. The guy wanted me to pay him by borrowing money from friends and relatives. I told him that was not possible. I am not working right now. I only have a part time job which I only work 2 days every 2 weeks. I told him that the only way they can get their money is when I file my income tax and I don't know how much the refund will be. He said he could take $4000 if I could get that much. I told him that I won't be able to give them anything at all until around March. He said that if I could come up with anything in the meantime, it would help. I told him there won't be anything until March. Anyhow, my question is one, how long do the collection companies wait before they start the court proceedings and two, if I were to pay them the $4000 how long will I have to wait until my credit rating will start to improve?

Thank you.
Salt Shaker

Hello Salt:

In today's credit scoring, the difference between a PAID account that's gone to collection, and an UNPAID account that's gone to collection, is negligible. Both notations come off your credit report in 7 years. So, you're really not much better off (in terms of your credit score), by paying.

However, here's a trick. IF and WHEN you get the cash to pay them (and I'll bet you can do it for $2,000 or less - depends on how good you are), get them to agree (IN WRITING) NOT to respond to the credit bureaus when they make an inquiry into the status of the debt. That way, you can challenge the negative remark on your credit report with all three bureaus. The bureaus then, are required to re-investigate your claim. IF the negative remark can't be verified within 30 days, it must be removed.

excon

First, have you read some of the threads here about debt collections and judgements? There is already a lot of good info here for you if you take a little time to read.

How long a creditor waits to file suit depends on a number of factors. Relationship of collector to creditor, status of the debt, how old the debt is, how the collector got responsibility for collecting the debt, amount of the debt, how much they know about your current situation and more. So there is no way for us to answer your question. We can't even make a good guess without a lot more info.

Thank you both for you advice. When I get the money to pay I will update you as to how it went.

Thanks again
Salt Shaker