Definition
A pay for deletion agreement is a written contract between a debtor and a debt collector in which the debt collector agrees to eliminate any negative reporting of an account to credit bureaus in exchange for an agreed upon payment by the debtor.
Analysis
A pay for deletion agreement must generally be drafted by the debtor and delivered to the debt collector for consideration. Debt collectors may at their option agree to the proposed terms, send a counteroffer or reject the agreement altogether.
Credit bureaus do not agree with the practice since it undermines the accuracy of credit histories that it maintains. They cannot stop or forbid the practice however.
A debt collector may decide that a pay for deletion agreement is acceptable if it is a condition for receiving payment on an outstanding debt. This may especially be true if the debtor has requested a verification of the debt.
Some debt collectors may make a verbal offer to delete all records of the debt with credit bureaus upon payment by the debtor. However, unless the debtor has something in writing, the negative items will likely remain on their credit reports.
Due to the sensitive legal nature of such requests, you should carefully draft such a letter based on information that you trust. Only utilize sample pay for deletion agreements if you trust the source of such documents. Several attorneys post examples of such letters online. You may also consider speaking with an attorney prior to proposing a pay for deletion agreement.
