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How to settle an apartment lease contract with a collection agency

Most landlords do not have the capacity to report tenants to the major credit bureaus but if they transfer or sale the account to a collection agency any unpaid debt can end up on your credit reports for up to 7 years.
How to settle an apartment lease contract with a collection agency
How to settle an apartment lease contract with a collection agency

How to settle an apartment lease contract with a collection agencyQuestion: I had moved out an apartment in 02/2010 when my lease was up, and into another apartment with a roommate. I got a letter stating that I owe $900 something from a collection agency. I had made sure I worked two jobs to pay them off. I wrote a letter back stating I do owe them.

They sent me back a letter giving the original lease stating that I moved out early, and relating fee and some trash I left in the freezer (I will pay that because I forgot I left food in there). I know when my lease was up, also they gave me a notice stating that my lease was going to be up so I needed to sign a new lease (I cannot find that paper anywhere).

My question is even if I pay the collection agency that means I cannot rent another apartment. I have no proof to take them to court, I will pay but I need to make sure that this will not be on the rental history and not being able to rent a new apartment. I CANNOT live with this roommate anymore so when this lease is up I have to move. Can someone help me I have did nothing wrong. I just know I will not win if I take them to court, and I need to start looking for a new apartment pretty soon. If anyone can help me I will leave my personal email I am desperate.

Answer: Landlords rarely report rental payments or problems with lease agreements to the major credit reporting agencies but they may transfer or sale an unpaid balance on a lease contract over to a collection agency. But the collection agency may end up reporting the unpaid balance to the major credit reporting agencies. Even if you agree to pay they can still report the paid balance to the credit reporting agency.


Since you are willing to pay, you should first attempt to settle the matter for less. Put your request in writing and offer what you think is a fair amount to settle the matter. In your letter make sure you request they not place any negative mark on your credit reports with the three major credit reporting agencies, Experian, Transunion and Equifax. If the collection agency agrees to a reduced amount along with an agreement not to place any negative marks on your credit, make sure you get them to sign the agreement.

Should the collection agency not agree to a reduced settlement amount, you can still request in exchange for full payment, they agree not to place any negative marks on your credit reports.

Once a collection agency reports you to the major credit reporting agencies, that negative mark could remain up to 7 years in your credit files. Understand that a paid collection mark is just as bad as an unpaid collection mark. This is why you must at request a deletion of the any negative mark they may have already placed on your credit or that they do not report anything to the credit reporting agencies at all.

At the very least, if the collection agency has already placed a negative mark on your credit and refuses to delete in exchange for payment, by you paying the outstanding debt, a potential landlord can at least see you did not leave the obligation unpaid.

It is imperative you get any agreements in writing and have someone in authority, like a manager, sign the agreement. Make sure you send everything via certified, return receipt mail. This is your proof if you need it at a later date.

Another option would be to seek legal help. Most cities have a local Legal Aid Society and they are usually very knowledgeable regarding landlord tenant disputes. You may want to consult with them before making arrangements to pay the collection agency. Legal Aid may even draft a settlement agreement on your behalf free of charge. Good luck to you.

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