Note something about collections:
Collections agencies are not a party to a debt and thus they have NO LEAGAL RIGHTS, and further they do NOT have the right to "destroy" your credit, or even to affect your credit. You owe money to the original party, and you only have to deal with the original party. You need to protect your credit by sending a "Cease and desist" to any and every collection agency that writes you about any debt. Send this by registered mail, return reciept as they are notorious about committing perjury and claiming they never received such letters. When you have proof, you will have them on the legal hook if they report the debt to a credit reporting agency or participate in any collection activities, including claling you, after recieving the C&D. You can find forms for these online... Here, I'll attach one below.
The original creditor maintains all rights, and they can sue you, or they can contact you, or attempt to work out an arrangment. By turning it over to a collection agency they have indicated that they don't think they can collect and are writing it off, which is fine as this is one of their options. But don't let your credit be hurt. Send the C&D to the collection agency, and they are prevented from reporting the debt on your credit report. Often this is also effective in gettign the original creidtor to actually talk to you so that you can work out payment terms.... and since they already wrote off the debt they should be willing to accept good payment terms (like 10 years, no interest, monthly payments starting in 6 months after you send them a $200 initial good faith payment... that's what I'd propose.)
Collection Agencies pretend like they have the authority and will pretend like they can sue you, they often pretend like they are law offices.... but remember their job is basically to intimidate you or trick you into paying, anything to get you to send a payment. But under the law, you have no contract with them, you never agreed to deal with them, and they have no legal rights. The original creditor can sue you, but if they were going to do that, they wouldn't have turned it over to a collection agency in the first place (Which keeps a large chunk of what they collect.)
So, don't let your credit be damaged-- be on the ball with the C&D and you can not only keep collections from harassing you, but force any creditor who really wants their money to work with you on terms.
[Your Name]
[Your Mailing Address]
[Your City/State/Zip]
Certified Mail, Return Receipt Requested # [Insert the Certified Mail Receipt Number here]
[Insert Date of Mailing]
[Insert name of collection agent, if available]
[Insert name of collection agency]
[Insert address of collection agency]
[Insert City/State/Zip of collection agency]
REF: Account # [Insert either the original account number or the collection agency's account reference number here]
Dear [Insert name of debt collector calling--if available--here]:
1. You are hereby notified under provisions of Public Laws 104-208, also known as the Fair Debt Collection Practices Act, that your services are no longer desired.
2. You and your organization must CEASE & DESIST all attempts to collect the above debt. Failure to comply with this law will result in my immediately filing a complaint with the Federal Trade Commission and the [Insert your home state here] Attorney General's office. I will pursue all criminal and civil claims against you and your company.
3. Let this letter also serve as your warning that I may utilize telephone recording devices in order to document any telephone conversations that we may have in the future.
4. Furthermore, if any negative information is placed on my credit bureau reports by your agency after receipt of this notice, this will cause me to file suit against you and your organization, both personally and corporately, to seek any and all legal remedies available to me by law.
5. Since it is my policy neither to recognize nor deal with collection agencies, I will settle this account with the original creditor.
Give this matter the attention it deserves!
[Sign your name here]
[Insert your name here]