What does all this mean?

[frogger]

I do plan on paying the amount to Capital One. Its 857.02. I just don't have the money to pay in one large lump sum. I can afford monthly payments, as in $80.00 a month but that would be about it. Do law firms and collection agencies let you make monthly payments?

I think that you're going to start to see more and more of the law firms and agencies accepting smaller payments. The collection agencies are getting paid on what is collected, so it is in their best interests to collect as much as possible.

According to some people in the collections industry, 2010 is going to be the year to start seeing the "new" tactics of the collection agencies, with payment plans and partial payments being accepted.

As to the original question about the dv making the collection agency pursue you harder, it does not. The c&d does however make them decide what to do with the account.

Nothing wrong with a dv letter.

[pcn]

If the debt has already charged off, make them an offer of 20% or so. The worst they can say is "no" and your credit rating is already affected. No way would I pay the original amount if it's progressed to this stage.

[api]

If they were to let me settle the account for 20%, will this effect my taxes?

[OHBOY]

Depends........see : http://www.irs.gov/pub/irs-pdf/p4681.pdf and do the worksheet.
If you have and IRA it may put you into 'solvency' for IRS purposes..........