ARS National Services does collect on behalf of Bank of America. In your situation they appear to be acting as a third party contingency debt collector. You can certainly call ARS to negotiate and resolve the charged off credit card debt, but I would encourage doing that when you have a more realistic amount of money to offer as settlement.
I have some questions for you to answer below that could help me offer more feedback about dealing with ARS.
Calling ARS National Services with an offer to pay.
I am not sure where your friend was reading, but unpaid credit card bills rarely settle for 10 percent. There was a brief period of time at the height of the recent economic downturn where Bank of America was settling accounts for 15 percent of the balance owed just before charge off. Getting that kind of deal approved on a BofA charge off was not all that common then, but I saw a sprinkling. Getting that good of a settlement from ARS National now would be unexpected.
I would suggest being prepared for 30 to 40 percent as a realistic settlement target. I do still see some accounts get resolved for lower than 30 percent. And if your friend does not look all the collectable to ARS on paper (other collections not paid on credit reports, not working, etc.), there may be a shot at negotiating lower, but probably not as low as can be funded with just the tax refund.
When negotiating and settling a debt with ARS National, keep some things in focus:
- Always keep a calm and professional tone when talking with a debt collector.
- When you are on the phone with the ARS debt collector, only offer information that supports there is no ability to make monthly payments, and only limited funds to offer as a pay off (it helps when your credit reports show there are other debts owed).
- Use end of month and other negotiation strategies as a timing method to get a better outcome.
- Never agree to a payment or settlement amount that you are at all concerned you will be able to follow through with.
- Get the agreement to settle from ARS in writing.
Watch this brief video for tips about negotiating and settling with debt collectors like ARS.
What state are you in?
Can you confirm when the past payment was made on the credit card (usually 6 months before the account charged off)?
Are there other collections showing on her credit reports?
Were there prior settlement offers from ARS National Services received in the mail, and if so, when was the last offer made?
Post your answers in the comments below and I will have more to share.
If you are dealing with debt collectors from ARS, and have questions and concerns of your own, you are welcome to post in the comments below for feedback.
6 comment(s) for this post:
- Melanie:
09 Apr 2015 Hello. I live in Oregon and I just received a letter from a debt collector (ARS) trying to collect a $493 debt with a date of service 12/22/06 in Rhode Island. I cleaned up my credit in 2010 and will finally have the last couple negative marks hitting 7 years and coming off this year so I am nervous about this letter because I do not want this older debt to get added, especially as I am finally about to graduate from college, have two kids, and want to buy a house as soon as possible. I looked through my files and found the original bills, and with them I found an original debt collection notice from the same company (ARS) addressed to when I still lived in RI and dated May 18, 2007. So I assume the date of original delinquency would have to had been before May 2007. I then also received another notice again from ARS in Sept. 2007. The May notice threatened action after 30 days, and the Sept. notice threatened action after 10 days, however no action was ever taken, they never reported it to my credit report, and I have not received another bill from them up until this point (which I assume is because I just opened my first credit card last Fall). I am pretty sure RI SOL for debt collection contracts and open accounts is 10 years. So it has been about 8 years now. This is over the 7.5 year limit that the account could remain on my credit report if it were to be put there (i think), but I am unsure what to do. I am still within the 30 day period to dispute the debt (I have not yet responded) but I am unsure if I should do this, if I should ignore the letter, or if I should pay in full? Some guidance? - Melanie:
09 Apr 2015 oh, and the debt is a hospital medical bill, which I am pretty sure is considered an open account? - Michael Bovee:
09 Apr 2015 I moved your comment to this page dedicated to collection accounts with ARS. Rhode Island SOL is 10 years, and Oregon is 6. You are well passed the limit to be sued for the underlying medical debt that ARS is trying to collect on as an Oregon resident. Because the account is also too old to appear on your credit reports, I would send a written dispute letter that includes a request for them to cease communications too. When legitimate debt collectors like ARS receive a cease communication letter they stop contacting you. I do not recommend sending a letter that limits debt collectors to only suing in court until the time has expired for them to legitimately do so. Send any letter like this using certified mail return receipt requested. Save a copy of the letter you send too. You could also just ignore the collection letter from ARS. If you get additional collection notices they could go in the round file too. This ARS account should never show up on your credit reports now. If it does show up later on, post an update and lets go from there. - Michael Bovee:
09 Apr 2015 One off bills are generally considered written. This typically would include a bill from a visit to a hospital or medical service provider. Accounts with balances that can go up and down month to month based on payments and new charges are generally considered open ended. - Melanie:
10 Apr 2015 Michael, Thank you so much for all your help. I do have one last question. Where do you see Rhode Island SOL is 5 years? Can you direct me to a site or document? I am just curious because everything I'm finding when I google RI SOL says 10 years. And if its 10 years then ARS is still within statute of limitations to sue me but they cannot report the debt on my credit, correct? So what do you suggest would my best course of action? - Michael Bovee:
10 Apr 2015 I corrected the RI SOL comment above to read the right time frame. The SOL is passed in Oregon. If you are a resident there (work, live, drivers license, etc), they will not sue. If they do, your defense is quick and simple - the debt is time barred. They are not going to sue in Rhode Island as they sent the letter to your address in Oregon, so know that you live there. I see your options the same. Send the cease communication letter, or ignore it.