The Alliance One Collection Agency is a large group of debt collectors. They collect on debts including: financial services, public utilities, telephone providers, retailers, medical bills…
In other words, the debt they are claiming you owe, can be any number of types of accounts.
Protect Yourself From Alliance One
1. Request Debt Validation – this can be done by writing a letter, which should be sent via certified mail. By doing this, you will have documented proof that is admissible in a court of law, should Alliance One file a lawsuit and get a judgement against you.
* A judgment on your credit history will most certainly TANK any and every credit score!
When you require Alliance One to validate your debt account you are telling them they must provide you with the legal evidence that proves this is your account. And they can legally collect upon the debt.
Unfortunately accidents happen all the time! And it would not be the first time an account was mistakenly sent to collections. Additionally you may not be the account holder.
There are a number of incidents when debt collectors have mistakenly contacted someone about a debt, and it was mistaken identity. In other words, the collection agency can make mistakes too.
A dirty little secret in the debt collections industry is sometimes accounts are sold, but the collector will continue to contact the borrower. This is illegal, and when the collection agency sells your account they are relinquishing their rights to contact you and collect on that debt.
2. If your account is not validated – you can forget it! You don’t owe the money and Alliance One has no legal authority to contact you or collect a penny!
3. If your account is validated – then you need to work out a settlement agreement.
How To Settle a Debt with Alliance One
When you negotiate a settlement agreement, it is absolutely critical to ensure that in exchange for your settlement payment that Alliance One will stop reporting your account to the major credit bureaus. If you neglect to make this requirement then paying your debt will not clear your credit reports.
Additionally you should never pay the full balance. The balance owed is inflated by a few factors:
- High / Penalty / Default Interest Rate
- Collection Fees
When Alliance One purchased your debt from the original lender they paid pennies on the dollar. For example, if your original debt was $2,000 then Alliance One only paid a fraction for the account such as $400 or 20%.
Most likely they paid much less than 20% there are reports of debt collectors paying as low as 2.5% or in this example of a $2,000 debt they would purchase it for $50. The point is you can often pay Alliance One just a fraction of the total due and get them to agree to stop reporting negative information.
We suggest you start your offers at 20% – 30% of the total balance – worse thing they can say is ‘no’.
How To Get Alliance One Off Your Credit Report
This is the most important step.
4. Dispute the credit bureaus – you can do this yourself. You must write a dispute letter and mail it to each major credit bureau (TransUnion, Equifax, and Experian).
Upon receipt, the bureaus will either deem your credit dispute valid or invalid. If they find it valid they will investigate the item by contacting Alliance One.
However if you have settled your account or Alliance One was unable to validate it then the bureaus will not be able to verify the account (assuming you did require them to stop reporting your information as a part of your settlement).
Once the bureau is unable to verify the account, then they by law they have to remove it from your credit report. This is one of the most effective methods to improve a bad credit score is removing negative information from your credit report.
What Can Alliance One Do If I Don’t Pay?
If you choose to not pay then Alliance One then they can proceed with two actions:
1. File a Lawsuit
Yes, they have legal right to sue you in a court of law. This will require you to either hire a credit lawyer for representation or if you do not show up to defend yourself on the court date then the court will award a judgment to Alliance One.
This is very BAD FOR YOU. Not only will it ruin your credit worthiness, but depending on what state you live in, you could have your wages garnished (money taken from your paycheck before you get it), and a lien placed against your property.
2. Sell Your Debt Account
They could also turn around and report an unpaid collection on your credit report and then sell the debt to another collection agency. The new agency would still be able to file a lawsuit against you and create more bad credit on your credit file.