Reply
Established Member
docbach
Posts: 11
Registered: ‎06-05-2013

Account went to collection while deployed

[ Edited ]

Back in 2008 I opened a credit line with guitar center to buy an amp, then I recieved orders to deploy. While I was in Iraq I was unable to make payments and the account was sold off to collections. When I got back home in November 2009 I got a call from the collections agency and I told them that the charge they were asking for was too much because the soldier and sailor's relief act limited my interest to 6%. They told me fine we'll take a certain amount (don't remember off the top of my head) so I paid it off.

 

Both the original guitar center card (Hsbc/Guitr) and the collections account (Lvnvfundg) are showing up as 120+ days late on my fico report, with the collections agency noting that "Account paid for less than full balance." I believe the debt to be in error due to the amount they said I owed because the SCRA makes interest rates cap out at 6%. Can I send a letter disputing these because the amount they said I owed was incorrect as they did not factor in the SCRA? Right now my score is at 582 and I want to bump it up to make use of my VA loan but I can't until I get my rating in the 600's.

Senior Contributor
DaBears
Posts: 3,923
Registered: ‎10-26-2012

Re: Account went to collection while deployed

Hi Docbach and welcome to the forums and thank you for your service!!!!! The other Community Leader Guiness56 I'm sure will chime in on this for you. pretty much knows everything with military stuff. :smileyhappy:

 

 

DaBears!!!!

Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008

Re: Account went to collection while deployed

You have to invoke your priviliges under the SCRA and just telling them that isn't enough.  Sending a copy of your orders stating your were deployed and wish to have all interest and fees capped at 6% would have gotten it done.  What basically happened is they settled the account for less.

 

I would still send in the orders and a copy of the portion of the SCRA that covers that and ask them to take care of it. 

Established Member
docbach
Posts: 11
Registered: ‎06-05-2013

Re: Account went to collection while deployed

I wrote a letter to both the collections agencies and the original card lender

 

to LNVN (CA):

 

LVNV FUNDING LLC
PO BOX 10497
GREENVILLE, SC 29603
(866) 464-1183
RE: Account #

 

Dear Sir or Madam:
I opened an account (#) with Guitar Center and was obligated to their company for a line of credit; This obligation was entered into on in early 2008, at a time when I was not on active military duty. I was called to active military service July, 2009 and sent overseas to Iraq. A copy of my orders is enclosed. This entry into active military service had materially affected my ability to meet my obligation.

 

Before I could return home and handle the issues with HBSC, the account was charged off and sold to your collections agency before I had a chance to invoke protective measures guaranteed to me by The Soldiers and Sailors Civil Relief Act (50 U.S.C. App. §526), which prescribes a ceiling of 6% annual interest on any obligation under the circumstances described above. This interest rate must be maintained for the entire period that I am on active duty. The percentage cap includes all interest, service charges, renewal charges, and fees. The rate is applied to the outstanding balance of the obligation as of the date of entry onto active duty mentioned above. Any interest charge above this statutory ceiling must be forgiven, not accrued. The monthly payment on the obligation must be recomputed to reflect amortization at the 6% per annum rate of interest.

 

The SCRA gives a service member 180 days after returning home the right to notify lenders; however, because my account was already sold to collections I was not able to request that it from HBSC. However, I did mention it to the collector who called me in November 2009, which was within the 180 day window for me to report it.
Recently I applied to utilize my VA home loan I earned through loyal and honorable service to our country, however I was denied due to a charge off in regards to this account appearing on my credit report. I paid the balance due that the LNVN representative told me I owed in full upon returning to the US, and I am asking in good will that you remove this from my credit report as the balance due reported and sold to your company was in error and should not have been accrued as I should have been protected by the SCRA.

 

I thank you in advance for your attention to this matter. Should there be any questions, please feel free to contact me at the address above.
Sincerely,

DocBach

 

to the original lender:

 

HBSC
PO BOX 5253
CAROL STREAM, IL 60197
(800) 477-6000

 

Dear Sir or Madam:

 

I opened an account (#) with Guitar Center and was obligated to your company for a credit card; This obligation was entered into on in early 2008, at a time when I was not on active military duty.

 

I was called to active military service July, 2009 and sent overseas to Iraq. A copy of my orders is enclosed. This entry into active military service had materially affected my ability to meet my obligation.

 

Before I could return home and handle the issues with HBSC, the account was charged off and sold to collections before I had a chance to invoke protective measures guaranteed to me by The Soldiers and Sailors Civil Relief Act (50 U.S.C. App. §526), which prescribes a ceiling of 6% annual interest on any obligation under the circumstances described above. This interest rate must be maintained for the entire period that I am on active duty. The percentage cap includes all interest, service charges, renewal charges, and fees. The rate is applied to the outstanding balance of the obligation as of the date of entry onto active duty mentioned above. Any interest charge above this statutory ceiling must be forgiven, not accrued. The monthly payment on the obligation must be recomputed to reflect amortization at the 6% per annum rate of interest.

 

Please ensure that your records reflect this statutory ceiling and that any charges in excess of a 6% annual rate are withdrawn. You should also be aware that federal law (50 U.S.C. App. §531) circumscribes the manner in which you may enforce certain rights under the contract, including any right to repossession of property.
The SCRA gives a service member 180 days after returning home the right to notify lenders; however, because my account was already sold to collections I did not request that it be reflected. Recently I applied to utilize my VA home loan I earned through loyal and honorable service to our country, however I was denied due to a charge off in regards to this account appearing on my credit report. I am requesting that in good will your company can remove this from my credit report as the balance due reported and sold was in error and should not have been accrued as I should have been protected by the SCRA.

 

I thank you in advance for your attention to this matter. Should there be any questions, please feel free to contact me at the address above.

 

Sincerely,
SGT DocBach

 

should I stop at goodwill letters, or can I notify the CRA's and file a dispute too?

 

thanks

 

Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008

Re: Account went to collection while deployed

Established Member
docbach
Posts: 11
Registered: ‎06-05-2013

Re: Account went to collection while deployed

I wrote those today, just found out about this on my credit report today.

Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008

Re: Account went to collection while deployed

Ok.  Those will work hopefully.  If you have any problems I would bring it up to the OC that you attempted to invoke the SCRA with the CA and they led you to believe it was done but recently found they only reported it as settled.

Established Member
docbach
Posts: 11
Registered: ‎06-05-2013

Re: Account went to collection while deployed

[ Edited ]

Yeah, pretty much the angle is I was suppose to have 180 days to invoke SCRA after I got home, but the account was charged off and sold for an amount that didn't reflect the SCRA's 6% cap, so the amount they said I owed and that I paid was not the correct one. Hoping its a good angle!  

 

Wondering though, should I file a dispute with the reporting agencies, too? I should have been protected by the scra and was never notified of the account going to collections as I was overseas.

Moderator
guiness56
Posts: 22,408
Registered: ‎01-17-2008

Re: Account went to collection while deployed

If it happened while you were deployed and you never invoked your rights before the CO or collections, they were within their rights to charge whatever they legally could.  Now that you have invoked your rights it needs to be corrected.

 

You are NOT automatically protected by the SCRA.  How is any of your creditors going to know unless you tell them in advance.  You don't have to be notified before hand unless you let them know before hand by giving each creditor a copy of your orders.  That would not have stopped the collections and/or CO, just the cap of 6% would have been used.

Established Member
docbach
Posts: 11
Registered: ‎06-05-2013

Re: Account went to collection while deployed

[ Edited ]

the deal with invoking it is I was suppose to have 180 days after the deployment to invoke it - they sold the account and charged it off before I had the chance to invoke it. I suppose I wish I knew about these rights and the ability to dispute articles on my credit report back then, but honestly I got married over the phone while in Iraq and was holding my daughter for the first time - pay to deletes, goodwill letters, and the like were the last thing on my mind. i told the collections guy about SCRA because I had the 180 days to report it and it was the agency collecting, but they disregarded it - so I hope the goodwill letter works because it was over the phone and I don't have any evidence to prove it happened that way.


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+