How do I Settle a Dell Financial Account?

Credit plays an important role in American society. Consumers often make computer purchases on credit with the intent to pay the bill off at a later time. If you have an account with Dell that you'd like to settle now, the Federal Trade Commission has good news for you. According to the FTC, hiring someone to negotiate the settlement of a debt is unnecessary. You can do it yourself free by contacting Dell directly.

Instructions

1

Read the billing statements received from Dell. Add up the total amount owed, including interest charges, late payments or any other fees assessed to the account.

2

Calculate how much you're able to pay towards this debt. This should be the highest dollar amount you can afford and will represent your settlement offer.

3

Call Dell and request to speak to a person of authority, such as a manager or supervisor. First-line customer service representatives usually don't have authority to accept offers. Inform the supervisor that you would like to settle the account.

4

Make a partial offer to Dell, but not the full amount owed. If you can pay $1,000 of a $1,500 debt, offer $500. If it accepts, you've just saved yourself $500. If it counteroffers, you have room to negotiate.

5

Get written confirmation of the verbal agreement after Dell accepts the offer. Never make a payment over the phone because without a written agreement to the contrary, Dell may apply it as a payment toward the outstanding amount due and still come after you for the balance.

6

Mail payment to Dell when you have the agreement in writing. Send a cashier's check or U.S. Postal money order via certified mail, return receipt requested to ensure the payment is received. It's a good idea to make a copy of the check or money order for your records prior to mailing.

7

Order a free copy of your credit report at least 30 days from the date Dell received payment. Under the Fair and Accurate Credit Transaction Act (FACTA), consumers can receive one free report every year from Experian, Equifax and TransUnion. Congress established a website specifically for this purpose (see Resources).

8

Check your report to see if the Dell account is present. If it is, make sure it shows a zero balance and has a status of paid or paid-settled. If the data on the account is incorrect, the Fair Credit Reporting Act (FCRA) gives you the right to file a dispute. Under the FCRA, the bureaus have up to 30 days to investigate and make corrections.

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Debt Consolidation & Debt Management for Credit Repair

Debt sometimes is inevitable, particularly in periods where your circumstances involve a decrease in overall income. To get control over your debt, debt consolidation and debt management are viable options. However, because these methods of handling debt are very different -- true consolidation always pays your debt in full, whereas debt management does not -- they have different impacts on your credit report and score. This influences how easy it is to repair your credit.

How Debt Management Works

In a debt management program (DMP), you hire a company to be a middleman between you and your creditors. You send them all the money you'd normally pay directly to the creditors, and then the debt management company pays your bills on your behalf. As part of their services, debt management companies also usually try to negotiate lower interest rates, lower monthly payments or forgiveness of some or all of the debt (debt settlement). If you're working with a for-profit company, you pay for the convenience of having someone else deal with each creditor.

Debt Management and Credit Repair

Any time you pay less than the full amount on your account balances, creditors usually note your accounts as "not paid as agreed." Because of the way debt management companies negotiate for you, the accounts you involve in the debt management likely will have this note. This doesn't necessarily impact your credit score, but it can make it harder to get new credit after the program, as any negative note on your credit report stays on the report for seven years. With debt management, accounts usually are suspended or closed, and you can't take on new accounts. Subsequently, your ability to open new accounts that could establish a better history is limited. Credit scores tend to dip during the first few months of a debt management plan if you are using less than 50 percent of your available credit, according to Vision Credit Education, Inc. They then gradually rise. Despite these issues, debt management often helps repair credit because it helps you get out from under the debt you have, with your debt management company making consistent payments on your behalf.

The Basics of Debt Consolidation

Many companies refer to debt management services -- including debt counseling -- as debt consolidation, but the two services are not the same. With true debt consolidation, you take out a new loan to pay off old ones. Consolidation thus is a form of refinancing. When you take out a consolidation loan, you can get better rates of interest and get a monthly payment minimum that works better for your budget, depending on your credit score and the term length of the loan. Like debt management, consolidation means you end up paying just one company what you owe. Unlike debt management, however, you always pay off your old loans in full. The terms of the old debt don't change; you reap financial benefits through the terms of the new loan, not by negotiating about old accounts.

Debt Consolidation and Credit Repair

Normally, debt consolidation doesn't ding your credit much, if at all, because you always pay 100 percent of your old debts. Your accounts appear as "paid in full," the best status they can have. However, your credit history length makes up 15 percent of your credit score. Consolidation can hurt your score if you close the accounts you pay off because closed accounts can truncate your history. How you've paid on your accounts -- on time or late, in full or partial -- makes up an additional 35 percent of your credit score. If you close accounts and just pay your new creditor, you end up making fewer payments, so your credit score may not rise as fast. Your score can drop if you miss a payment on the consolidation loan, just as if you missed payments with your old creditors.

The Bottom Line

Both debt consolidation and debt management can hurt or improve your credit based on what you do after entering the consolidation or management. Overall, however, debt management is riskier because of the fact you don't pay your old debts as agreed. Many people in need of credit repair can't use consolidation, however, because consolidation requires qualifying for a new loan.

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How to Practice Debt Negotiation Skills

Learning debt negotiation skills may be one of the most powerful things you can do for yourself as a consumer. Though it can be tough to do it on your own, the good news is that with sincere effort at least some of your creditors may respond to your attempts at debt negotiation. When undergoing any nontraditional method of handling debt, patience and flexibility are important. Negotiating debt takes time, but it may well save you money and stress in the end.

Instructions

1

Start by calling your creditors and asking for a debt hardship program. If you are already behind on payments, they may be willing to work with you. Many credit card companies have these kind of in-house debt negotiation programs. Usually, a hardship program stops late and over-the-limit fees, reduces interest and sometimes trims minimum monthly payments. Keep in mind you will likely lose the ability to make new charges when in credit card debt negotiation.

2

Write a letter to your creditors if your telephone efforts are not successful. If you can only pay a certain amount per month, explain this. Even if you do not hear back, you may still want to pay what you can even if it does not meet the expected monthly payment. If you have extenuating circumstances that created your need for debt negotiation, do not hesitate to mention this in your letters.

3

Write a "Question" letter to your creditor via Planet Feedback. The website is noted in our Resources section below. Planet Feedback is a popular way to get in touch with those at companies who have the most decision-making authority, such as representatives of the company president or CEO's offices.

4

Write a letter to the collection agency for all debts already in collections. State that you can offer 50 percent of the debt as full settlement of the account. They may be more willing to work with you than your original creditors.

5

Consider consulting with a credit counseling agency, debt negotiation firm or possibly filing Chapter 13 bankruptcy if after months of honest effort you cannot reach acceptable agreements with your creditors. Chapter 13 bankruptcy enables a federal court to enact a payment arrangement plan on your behalf, but it should not be entered into lightly. However, if you are being sued despite your efforts to negotiate debts on your own, then you may need to consult with professional businesses or consider bankruptcy.

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Can Creditors Garnish Payroll?

If you can't afford to pay your debts, your creditors will do everything they can to collect it from you in some way. One method that creditors often use to collect the money you owe is a wage garnishment. With this option, the creditor takes money right out of your payroll to pay your debts.

Getting a Court Judgment

Although creditors have the right to garnish your paycheck, they cannot do it without first going through the correct process. When a creditor wants to garnish your paycheck, it must file a civil lawsuit against you for the debt. The creditor will appear in court in front of a judge and verify that the debt is valid. You also have the opportunity to appear in court. Unless you prove that the debt is not yours, the court will issue a judgment against you.

Obtaining a Writ of Execution

Even if a creditor has a judgment, it does not necessarily mean that it can start garnishing your wages. Another step must take place before the garnishment can occur. After getting the judgment, the creditor also has to get a writ of execution. Typically, the court allows you 30 days after the judgment is issued to pay it. After that, the creditor can go back to the court to get a writ of execution.

Setting Up the Wage Garnishment

After the creditor has the writ of execution, the local sheriff gets involved. Once the creditor provides the writ of execution, the sheriff contacts your employer and helps set up the wage garnishment. Once the sheriff and the creditor have contacted your employer, the wage garnishment will begin. At that point, a portion of your paycheck will be deducted every time you are paid and will go directly to the creditor.

Considerations

When a creditor sets up a garnishment on your payroll, it will not take all of your paycheck. According to federal law, creditors can only take a maximum of 25 percent of your paycheck when using a wage garnishment. Some state laws make the maximum garnishment even less than 25 percent. Once the debt is paid off, the creditor will remove the garnishment and you get to start receiving a full paycheck again. In some cases, you may be able to work out a payment plan with the creditor and get the garnishment removed before the debt is paid.

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Debt Refinancing Guide

Most consumers go into debt at some point, whether it's to take advantage of the convenience of a credit card or to get a mortgage to buy a home. But too much debt can be a serous problem, threatening your ability to pay your bills and putting your property and savings at risk. Refinancing is one solution within the ability of most consumers to arrange and it is widely available.

How it Works

Refinancing a debt involves getting a new loan to replace it. While replacing a loan with another loan might seem counterproductive, it can actually save a great deal of money. Refinancing debt may give you access to a lower interest rate than what you're currently paying. It can also extend the amount of time you have to pay off your debt, reducing your monthly payments but projecting them further into the future. Refinancing also eliminates the late fees and collection efforts of your lenders and gives you a new loan with a fresh start.

Debts You Can Refinance

Refinancing is available for several different types of debts. Mortgages are among the most commonly refinanced debts, in part because they last for so many years and borrowers have more time to find better options. Auto loans and credit cards are also subject to refinancing. Student loan refinancing involves several options for borrowers including income-based repayment plans from the federal government. Businesses can also refinance their debt to free up cash for other purposes such as expanding payroll.

Expense

Refinancing isn't free and borrowers need to understand the costs before deciding whether it's a good idea. In some cases you'll need to pay to get out of your old loan. Mortgages often include prepayment penalties to make up for the lost interest your lender experiences when you close the loan early. Prepayment penalties can also apply to auto loans. Besides shedding your old mortgage, there are the costs associated with a new loan, including closing costs and administrative fees. If you go through a broker your refinancing will carry the added cost of the broker's commission.

Sources and Options

Before you seriously consider refinancing, contact your current lender. Lenders can reduce your interest rates, forgive late fees and make other changes that will make it easier for you to repay your loan without refinancing. In the case of a mortgage this is known as mortgage modification, and it's a good first step before taking more drastic action. If you do decide to refinance, the same lenders that provide mortgages, auto loans and other types of loans are the most common refinancing sources. For credit cards you can contact a credit counseling agency, which will help with consolidating or refinancing your credit card debt for a fee.

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Difference Between Assigning & Selling a Debt to a Collection Agency

When a customer fails to pay a debt, creditors often assign or sell the debt to a collection agency. In either case, federal and state laws protect consumers against abusive and deceptive practices.

Collection Agencies

Many companies do not have the resources to spend a lot of time pursuing debtors for what they owe. Collection agencies specialize in collecting debts and use various methods to track down debtors to convince them to settle or pay their bills. Typical collection agency methods include sending letters to the debtor and calling them at home or work.

Contingency or Flat-Fee Agencies

Some collection agencies operate on a contingency or even a flat-fee basis. Creditors assign their bad debt accounts to the agency that, in turn, collects on behalf of the creditor. Contingency collection agencies don't accept an up-front fee from the creditor, but instead keep a percentage of what money it does collect from the debtor. Some collection agencies also accept a flat fee from the creditor, which it gets to keep regardless of whether it succeeds in getting a debtor to pay her bill.

Debt Buyers

Some creditors prefer to wash their hands of non-paying clients and just sell a defaulted account outright at a tiny fraction of its value. There are many companies that buy debt; they are often known as "debt buyers" or "debt factoring companies." These companies often operate as collection agencies and can pursue debtors just as a contingency collection agency would. However, since debt buyers actually own the debt, they may be more willing to agree to a significantly discounted settlement with a cash-strapped debtor.

Federal and State Laws

Federal and state debt collection practices law governs the way all third-party debt collectors can attempt to collect debt. The Fair Debt Collection Practices Act, for example, prevents debt collectors from harassing or abusing debtors. The Fair and Accurate Credit Transactions Act restricts the way debts, even debts purchased by a debt buyer, are reported on consumer credit reports. For the purposes of credit reporting, negative information on a debt purchased by a collection agency can only be reported from the time of default with the original creditor: Debt buyers cannot report the debt as "new" from the time of its purchase.

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Do I Have to Pay My Ex-Husband's Debt That Is in Just His Name in Michigan?

When a couple gets a divorce, they are turning an emotional arrangement into a business transaction. All marital assets and debt must be divided and split between the two parties. While splitting up the assets is difficult enough, dividing the debt causes problems that extend beyond the divorce. Generally in Michigan, individual debt remains the responsibility of the person whose name is on the account.

Types of Accounts

An individual account is an account that belongs only to one person. In the case of a debt account, only one person has agreed to repay this debt. A joint account usually has two people named on the account, but can have more. With debt, anyone who is signed promising to pay the debt is jointly and severally liable for the debt. This means that anyone one party is responsible for the entire amount owed. An Authorized user account means that a person has been allowed to use the account, but they have not promised to pay any of the balances.

Divorce and Debt

A divorce does not change anyone's responsibility in regard to paying the debt. If a husband and wife both signed saying that they would pay, they will still both be held responsible for the debt. If you have not signed an agreement stating that you would be responsible for a spouse's debt, then you do not have to pay it in most cases in the state of Michigan.

Community Property States

Community property states operate a bit differently. These states view any property that is acquired during marriage to be marital property, no matter who earned the income or paid for it. The same applies to debt. Any debt incurred during a marriage is the responsibility of both parties no matter who signed for it. As of 2010, Michigan is not a community property state.

Family Expenses

If the proceeds of a loan or credit card were used to pay for family expenses, there may be some joint liability. Many states have laws on the books to allow this liability, and courts rule based on individual circumstances. If a spouse took out a loan to purchase a new boat and it was in the husband's name only, it is not likely that the court would consider it a family expense, and the wife would probably not be responsible. If he purchased a new minivan, it could be a different story, especially if the wife drove it more often. Food and household expenses placed on a credit card could be termed as family expenses and may have joint liability as well.

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