Outstanding Debt w/CA from Ex-Roommate, Pls Help!

Anonymous · ‎06-17-2010

I found out that $2890 is owed to the apartment building I lived in with my ex-roommate. I called the collections agency (Fair Collections & Outsourcing) to find out more information & discovered she 1) did not pay her last month's rent 2) had been paying rent late every month, incurring $75 fees each time and 3) she was short paying her portion of the rent by hundreds of dollars every month that we lived together. When I first found this out I immediately contacted her, she told me she would take care of it, never did, etc. I did not have the means to pay the money she owed in order to prevent the collections company from putting this on my credit report. I am in my late 20's, had finally gotten my credit good after some problems in the past & will need a good score to secure a mortgage in the near future. My question is, what is my best course of action at this point? I tried sending a letter to the collection agency, basically offering to settle at $2000 for the sole purpose of having the item deleted from my credit report. They accepted the settlement amount but said deleting the information was not possible. Do I pay the $2000 anyway so I can atleast have the item as paid on my credit report? w/the option of then going after the ex roommate in court for repayment? Or does the item effect me negatively regardless of whether I pay or not? Should I not pay it at all and wait for the Collection Agency to take further action against us both and go from there? I really do not have $2000 laying around but I can make it happen if it is in my absolute best interest.

Any feedback on this matter would be greatly appreciated!

Anonymous · ‎06-17-2010

@Anonymous wrote:
I found out that $2890 is owed to the apartment building I lived in with my ex-roommate. I called the collections agency (Fair Collections & Outsourcing) to find out more information & discovered she 1) did not pay her last month's rent 2) had been paying rent late every month, incurring $75 fees each time and 3) she was short paying her portion of the rent by hundreds of dollars every month that we lived together. When I first found this out I immediately contacted her, she told me she would take care of it, never did, etc. I did not have the means to pay the money she owed in order to prevent the collections company from putting this on my credit report. I am in my late 20's, had finally gotten my credit good after some problems in the past & will need a good score to secure a mortgage in the near future. My question is, what is my best course of action at this point? I tried sending a letter to the collection agency, basically offering to settle at $2000 for the sole purpose of having the item deleted from my credit report. They accepted the settlement amount but said deleting the information was not possible. Do I pay the $2000 anyway so I can atleast have the item as paid on my credit report? w/the option of then going after the ex roommate in court for repayment? Or does the item effect me negatively regardless of whether I pay or not? Should I not pay it at all and wait for the Collection Agency to take further action against us both and go from there? I really do not have $2000 laying around but I can make it happen if it is in my absolute best interest.

Any feedback on this matter would be greatly appreciated!

Sorry to hear about your situation.

Did both you and your ex-roommate sign the apartment lease? If your name is on the lease, you are liable for the debt and it reflects on your creditworthiness as though you were a cosigner on a loan.

The CA can delete the tradeline if they want and their is no legal impediment to their doing so. It's probably their company policy not to do so, though. It all boils down to how badly they want the money and what they feel their chances are of collecting. You might try talking with them and making it clear that you are not willing to pay anything as long as they are not willing to delete. Perhaps if you up the offer they might also find that attractive. Or perhaps you can cut the CA out of the picture and deal directly with the original owner of the debt.

Whether you pay or not the tradeline will still remain and have a negative effect. On manual credit decisions -- such as a mortgage -- a paid collection will look better and for a mortgage may not be a deal-breaker in and of itself.

You can sue the ex-roommate. Small claims court may be a good option. Make sure you have documentation to back up your facts.

Another option is just to wait things out. Sooner or later the negative tradeline will fall from your credit report and maybe they will not try and sue you. If they do try to sue you, you can always then decide to pay and avoid a judgment.

Anonymous · ‎06-17-2010

Welcome to the forums!

$2000 is definitely not pocket change.

I would recommend some further research, for sure.

One thing you can search for here on the forums is PFD, or pay for delete. That's what you'd like to get them to do. Often people are able to work with creditors and get the item deleted in exchange for partial or full payment.

You might also consider trying to contact the OC (original creditor).

Good luck!

RobertEG · ‎06-19-2010

I would take the direct approach.

I would immediately bring civil legal action against former roommate, and if you cant afford a lawyer, to it yourself in small claims court. If you are unwilling to do this, then you are tacitly accepting responsibilty for her negligence, and will have a very hard path in conviincing others of your lack of obligation. That is why we have courts.

Why such a harsh approach?

Maybe, at least, some court-ordered recovery ot the debt itself.

I understand that this, alone, will have no immediate impact on credit scoring, for they are holding both of you equally liable for debt, and thus reporting to both of your credit reports.

But is you have a court judgment in hand showing that for the periods of negative reporting, the court has held that legally, it was due to neglect by roomy, and not you, you will have a better chance of getting deletion from the creditor.

As to whether or not I would advise you to pay it now, that is complicated. If you dont legally owe it, payment might compromise any legal action you are taking against roomy. Payment will certainly be asserted by roomy as an admission of obligation. But if you dont pay, the creditor might bring legal action for unpaid debt at any time, and you have no control over that.

Making a PFD offer also carries with it the implication of admission of responsibility. If you bring legal action aganst roomy, it will again be used against you.

IF a CA has toild you that they dont do PFDs, they are telling you that they comply with their reporting obligations to the CRAs, one of which is their agreement that they will NOT delete prior reporting based on subsequent payment of the debt. A totally proper response on their part.

I would file an immediate civil action against roomy.

Anonymous · ‎07-21-2010

Hello, thank you for your input! Yes both my roommate & I signed the apartment lease. Well, she had a pre-exiting lease on the apartment w/her boyfriend. When he moved out & I moved in, I took his place on the lease.

Question - the CA is the one who reported the debt to the credit reporting agencies so if I went to the original owner of the debt, would I still be able to negotiate having the item deleted?

Thank you again for your response, sorry it took me so long to get back to you!

Anonymous · ‎07-21-2010

Hi Robert, thank you for your response. I already sent the CA a PFD letter so are you saying that is going to count against me if I bring the roommate to court? Should I still file a civil action against her? Thanks.