Collection Agency Question

[kathryn99]

My appologies if this gets long. In 2003 we had a boat repossed. We had been paying a small amount each month towards the balance that was left after they sold it (which was a lot over $10,000). We were doing this through an autopay. There was a mishap in the autopay and it hadn't been coming out. Now this balance has been turned over to a collection agency (Mountain State Adjustment if anyone is familiar). I talked to them for the first time today and they want $12,900. I cannot even imagine there was that much left on the balance so I am not sure where that number is coming from. I was planning to send a validation of debt letter. Is that the right course to take here. They are expecting me to call them back on Friday. I told them we don't have access to that kind of cash. He said they pulled our credit report and it is good enough we should be able to get a loan. I am also wondering if this is outside the statute of limitations for my state. I looked it up and it appears to be 6 years for written contracts. What are your suggestions. The guy on the phone was very rude.

Thank you in advance.

[LifeSAVERS]

Have you pulled a true copy of all 3 of your Credit Reports?  

Is the debt listed on any of the reports?  

If it is:

Who is it listed under collection agency(CA) or original creditor (OC)?

What is the date of first delinquency (DOFD)?

Did you make any payments after the DOFD shown on the report?

Did you receive anything in the mail from this CA? Make sure before you talk to any CA on the phone that you have all the information you need, do not offer any knowledge of the debt or any promise to pay.

If it is listed on your CR with this CA and past the statute of limitations (SOL), than follow appropriate steps when dealing with them.You will want to send a debt validation (DV) letter to the CA only if it is on your report and still within SOL, as they may not be able to validate that they have any legal right to collect on this debt. They may not even be licensed in your state to collect.  I have found that the ruder the caller is, the more likely that they have no right to be calling and collect.

If the debt is not on your credit reports and you have not made a payment in over 7 years

[LifeSAVERS]

...sorry...hit send before finished...distracted by family!

If you have not made any payment in over 7 years, than it is more than likely not on your report, past SOL, and the CA needs to receive a cease and desist letter.

[RobertEG]

If past SOL, sending a cease communication letter may not be the best path, assuming you still want to settle the debt.

Neither expiration of SOL nor credit report exclusion discharges the debt, and the unpaid, delinquent debt could still be discoverable by means other than a pull of your credit report.

You could choose to offer a settlement for a fraction of the debt.  If you have placed them under a cease communication letter, they cannot negotiate with you.

First question is.... do you intend to pay the debt?

[kathryn99]

Made our last payment to the original lender in May. That must be when the auto pay stopped. I'm not paying $12,000. That is more than what the balance was with the bank. There is nothing about it on our CR at this point. The orginal discharge was there from the original lender. This company pulled my credit. I'm sure I made a mistake talking to them today but truly did not know why on earth a collection agency was calling my husband's work. I told them we didn't have that kind of cash. He said our credit looks good enough that we should have no problem getting a loan. I told him I would call on Friday because I am out of town. Just trying to figure out where to go from here. We have worked hard to get our credit good again and don't want these guys to mess it up.

[Anonymous]

Unfortunately, making payments moves the SOL forward to the last payment date.

Next time you are on the phone with them, politeley remind them that "deceptive and abusive behaviour" is a violation of the FDCPA and that because of previous rude behaviour, you are recording all calls. That will keep them in line.

I would offer to make up any missed payments and toss in an extra lump sum (whatever you can afford) if they will re-instate the original payment plan. Let them know that they can sue you if they want but it will just drive you into bankruptcy.

[kathryn99]

Darn! Thanks for the help! Do you think I should send a validation letter to try to find out why the amount is so high and maybe buy a little time to figure things out?

[Anonymous]

Were you making payments to the original creditor? Do you know if they have sold the debt or have they just assigned it to the CA? You should be able to get a complete accounting of payments made and how they have been applied from whoever you were making payments to.

[RobertEG]

Sending a timely DV would impose a total ceace collection bar.

Yes, it would prevent reporting of their collection until they validate, but will also preclude you from any payment negotiations.

Yoour choice as to whether you want to put things in limbo....

[kathryn99]

We were making payments to the original creditor. I do not know if they sold it or assigned it.