As MCA holds such a large percentage of the debt collection industry, it is common practice for MCA to buy delinquent debt for a fraction of the original debt amount. Delinquent debt is offered for sale when creditors are unable to collect the debt from their debtors. After MCA has obtained the delinquent debt, it will proceed to try to collect from the debtor using all manner of collection techniques, such as contacting you by mail and telephone or even, in some cases, by initiating legal action.

As you probably know, when you apply for a line of credit, be it a home loan, car loan, or credit card, the lender requires that you agree to certain terms and conditions. One of these terms and conditions is invariably that you will pay at least your minimum monthly payment either on or before your due date.

If you default with regard to this repayment condition, you will begin receiving letters and telephone calls demanding satisfaction, i.e. payment of the outstanding debt. If you are unable to make payments to bring the account back up-to-date, the creditor may tire of trying to collect the debt and decide, instead, to sell the delinquent debt to a collection agency. This will allow the creditor to obtain at least partial payment on the outstanding debt. This will cause your credit score to begin to spiral downward. To add insult to injury, MCA will most likely purchase your delinquent debt for pennies on the dollar.

You will begin to receive letters and phone calls again requesting payment. Most likely, the MCA collection agent will be looking to negotiate a settlement. Do not be surprised to find that your original debt amount has now multiplied as now you will see that late fees, over-limit charges, and interest have been applied.

It is wise to attempt to negotiate a settlement with MCA, if at all possible. If a settlement is not reached, you will see your credit score take a hit yet again.

When negotiating a settlement, you should make sure that you can hold up your end of the bargain. You should keep in mind that MCA purchased the delinquent debt for pennies on the dollar and, as such, you shoudl begin your negotiation low, probably 40% of the original amount. When negotiating, you can take one of two approaches – you can offer a lump sum payment or you can offer a payment plan. Always be sure to keep copies of all correspondence to and from MCA while negotiating in the event you should need it in the future.

Do not complete your negotiations without making sure that the delinquent debt will be erased from your credit record. If the MCA collection agent is unwilling to do this, then make sure that the delinquent debt will at least be changed to a debt which was “paid.” Debts which are reported as “unpaid” can remain on your credit history for up to seven years. Additionally, lenders are wary of people with unpaid debts on their credit reports. Home loans, vehicle loans, or credit cards can be denied because of these reported unpaid debts.

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