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I am about six months behind on four credit cards and I have contacted MMI a credit counseling company to set up a debt management program that will allow me to pay off my debt in a couple of years; however, I just received two notices from two separate collection agencies advising me that two of the four accounts are now in collections. Will MMI send monthly payments to the collection agencies as they would the creditors? and if so, once paid will I be able to have the paid accounts removed from my credit report? I have been reading about pay for delete letters that have worked for some in the past. Any guidance would be great! Thank you!

1 Thought on Does a credit counseling company work with collection agencies?
  1. Reply
    CatDad
    August 16, 2013 at 5:43 am

    MMI / NFCC.org are non profit services set up by credit card companies to help people who are struggling to pay their credit card bills. As a general rule, this service is only beneficial to people who are a few months behind but have not defaulted on their credit cards. The time to contact MMI is when you’re like one month behind….not at the point of default.
    – When you go six months past due on a credit card, your accounts are closed and charged off. This is one of the worst things that can happen to your credit history. Once you are close to or past the point of a charge off, you are much better off trying to settle the account for less, like 30-50% of the amount, with all terms in writing before you pay. This can only work if you actually have the money to settle the account all at once. They will not settle for less like this if you can only afford a monthly payment plan.
    I would seriously forget the MMI program if you are this far past due. Collection agencies will not want to participate in this program. Monthly payment plans for already defaulted often do not turn out well…especially when collection agencies are involved.
    – Accurate negative info stays on your credit report for 7 years. If you later pay or settle these defaults, your credit report will get updated to Paid with a $ 0 balance but the history of going past due and defaulting will remain. Pay for Delete agreements do not work with defaulted credit card debts.
    – If you don’t have any funds to settle, then there’s not much you can do. If you must do a payment plans with the collection agencies, do it yourself and make sure you get account statements every few months to confirm that the balance is really going down. Don’t be surprised if at least one of these creditors takes you to court to get a judgement.

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