Help! I just got approved for an FHA loan and a debt collector just called & threatened to sue

[Anonymous]

I just got approved for an FHA loan and the same day I signed the contract on my house, a collection agency called and said they were recommending my account for suit!  What should I do?  I've just spent most of my money for a down payment.  We're not closing until the end of February and the loan officer said to not do anything to mess up my credit.  If I send in a payment to the CA won't that reset the DOLA and mess up my financing? 

[rred4]

How much is it for and if you are closing in Feb I don't think a judgment will show up that fast.They haven't even been served you court papers yet. 

[ShanetheMortgageMan]

If you are served, you must notify the lender immediately.

If you pay, it won't mess up your chances because FHA isn't score sensitive... it's credit history sensitive, and FHA will never look down upon someone paying a collection.  You should be fine to pay it, but I'd recommend you pay it through the closing on the home.

[sh9730]

Just out of curiosity on this one, if the collection is past SOL, isnt the CA just blowing smoke?  Those Asset Acceptance and Calvary guys can get pretty harsh even long after the debt has dropped off the CR and is past any legal recourse....

[Anonymous]

Recommending for a suit means nothing. It is an empty threat that they like to try and scare people with. I know I use to collect. If he calls again ask him/her exactly what day are they suing you and that you will meet them at the courthouse. You'll be surprised how quickly they change their tone.

[Anonymous]

You didn't mention whether the account the CA is calling about is already listed on your credit report or if this is simply a cold call from a CA regarding an account you know nothing about.  Since the CA has your phone number, assume they have your address.  They must "serve" you with court papers in order to sue you.

CA's monitor credit reports hunting for people who have recent inquiries from mortgage lenders.  The CA's know that just the mere thought of your mortgage funding being derailed is all they need to scare people into paying them, even if the CA's claim is totally fraudulent.  Kasowell is corrent, these are nothing more than empty threats.

When a CA calls:

• No matter what the CA asks, says or threatens, your only reply should be "I wish all communications to be in writing.  You may contact me in writing at (give them your address)"
• Other than repeating the above statement - say Goodbye!
• If you have caller I.D., take a picture of the caller I.D.  This can get a judgment vacated if the CA files suit and says they couldn't send/serve papers because they didn't have your contact information.
• Write down the date, time and who called.  Again, this comes in handy if the CA files suit and says they couldn't send/serve papers because they didn't have anyway of contacting you.

Communicating with a Collection Company:

• Do not talk to a CA!
• Send all communications in writing CMRR.
• Do not sign letters you send to a CA - Typed Name only

Reasons

• You may inadvertently acknowledge, agree or admit to something you should not.
• You may provide them with information they do not already have.

[JeffWeico]

Asset Acceptance is INFAMOUS for filing suit against people even when the SOL has expired, and for not having any documentation to substantiate the debt. In fact, they are known as the "home of the $50 mystery payment". Paying on an old debt resets the SOL in most cases. If pressed, Asset will investigate and advise you that the supposed payment was a "posting error".

Do not speak with them on the phone anymore. Seek out a consumer rights attorney in your area, and give them all of the letters you have received and explain what happened. Most of these attorneys do NOT charge for an initial consultation, and will be happy to advise you as to what Asset Acceptance can or cannot do.

It is a violation of the FDCPA for a debt collector to threaten any action they do not intend to take. "I Will Recommend Legal Action" may or may not fall into this category. Often, however, a consumer rights attorney can find other violations of the FDCPA. If they take your case, they will probably do so on a contingency basis, meaning they will get paid when the collection agency settles the lawsuit.

Again, the best thing to do is talk to an attorney. At a minimum, you will at least then know what your options are and what the possible consequences may be.

I am the lead plaintiff in an FDCPA case brought against Asset Acceptance LLC in federal court. I could not have done this without the advice of a VERY GOOD consumer rights attorney.

Advice on the message boards is OK, but having the advice of an attorney in your area is priceless. And, even if you legitimately owe the debt, once Asset finds out that you are going to fight tooth and nail, they will most likely move on to the next victim. They are a business after all, and they do not make money by fighting cases in court. They thrive on "default" judgments where the debtor does not show up. For example, if you are sued and do not raise the SOL objection, they win - the judge will not raise the objection for you.

It might cost $1,000 or so to hire an attorney to defend your case, but if it gets dismissed, that is CHEAP!

Asset was once a debt purchasing pioneer, and was very much above board in everything they did. Now, however, the original owners have retired, and the businessmen running the company are willing to take certain risks the original owners would not have taken. If you sue 10 people for debt that is outside the SOL, odds are that only ONE will show up and raise the objection. That means that you now have NINE default judgments that you can execute on after 30 days have passed (after 30 days, these are "set in stone" for the most part.

Do NOT FALL INTO THEIR TRAP! Get a LAWYER ASAP!!!

Just my 2 cents...

Jeff

(17 years in the collections industry with an emphasis on litigation)