Collection mysteriously disappeared... scared of being sued.

[esme]

Hey everyone. I'm wondering if anyone has had anything like this happen to them.

I checked my TU report this morning and was VERY surprised to see that the last collection that was on there was completely gone. Deleted. Nowhere to be found!

Normally I would be jumping for joy at this discovery, but I'm concerned for a number of reason. Here's the short story:

This was an unpaid collection that I received a bill for back in July 2011. I sent a letter to the CA asking for DV and they sent me a copy of the contract I signed with the OC. The OC is a karate school with which I signed up my son for classes. I disputed owing any amount because when I signed the contract, I got the wife of the school's owner to agree to let me cancel if I moved away from the school, even if still in the DC Metro area. I posted about the details of this issue here.

So at the advice of the MyFICO members who responded to my plea for advice in the above-referenced post, I sought the advice of a lawyer about two weeks ago. He said he thought I had a case and that we could definitely send them a letter telling them they needed to go away, but said that I should try first to find my copy of the original contract before we sent them anything because if I did find my own hard-copy, that would be the easiest way to resolve this.

I went looking for the letter and haven't found it yet. The last communication I had with the CA or the OC was when I sent them a letter asking for DV. And I am certain that my lawyer hasn't sent them anything either because I haven't called him to tell him whether or not I found my copy of the contract. So I have NO CLUE why this collection would suddenly just disappear completely from my credit report.

My question is this: could the sudden deletion be an indication that the school has intentions of suing me? I live in VA and the SOL hasn't expired. Any thoughts on this would be greatly appreciated. Thanks.

[RobertEG]

Its not liikely that their deletion was related to impending legal action.

You have them under a DV request, requiring them to cease collection until verification is provided.  If they were to bring legal action without verification, the court would most likely require that they provide you that verification prior to moving forward with the suit.  It is not ripe for trial.

If the OC were to bring action, and the debt collector is still their agent, the issue is still active.  No verification has been provided.

If the OC has trashed the debt collector, who knows why.  Most likely, the debt collector trashed the OC, deciding not to continue to pursue the matter.

If the OC brings in another debt collector, they know a DV will be coming, so I dont see any tactical gain on that point.

I think it is a postive rather than a negative sign.

[esme]

Well, the thing is that they did respond to my request for DV within 30 days by sending me a copy of the contract I supposedly signed. I asked the owner of the school to hand-write a statement on the contract that they would allow me to cancel the contract if I moved. The copy of the contract they sent me had this handwritten statement in it, except it said specifically that they'd allow me to cancel if I moved out of Northern VA. I know for a fact that I would not have signed it if they would only allow me to cancel if I had moved out of N. VA because I have never had any intention of moving very far, just closer to work so my commute wouldn't be as bad. So the issue is that I believe they added the extra "out of N. VA" part after-the-fact. That's why my lawyer wants me to find my copy of the contract I signed. 

Do you still see this as a more positive sign with the additional details I've just given you? I'm scared to sit around and just wait, but I'm also scared to call either the CA or OC for fear that I might be waking a sleeping giant. I'm still trying desperately to find my copy of the contract in the meantime.

[llecs]

A fellow Northern Virginian! I'm in Burke. And yes, traffic is terrible depending on where you commute. Thankfully I work in Fairfax, but I've seen clients in DC and my commute is often an hour or more just to go 12-15 or so miles from my home.

In lieu of what was posted, I also vote it a being a positive sign. The CA has nothing to do with any suit against you because they wouldn't own the debt. It would be the OC who would bring the suit against you. If I had to guess, the OC wrote it off as bad debt for tax purposes which would coincide with a CA falling off.

Per the FDCPA, the only 30 days mentioned is the 30 days you have to respond to a DV. Under the FDCPA, a CA has forever to respond, if at all. They aren't limited to 30 days (unless you live in TX). However, if you mailed the DV inside 30 days, they cannot engage in any collection activity like calls or letters, though an argument can be made that reporting falls under that too if they received the DV inside 30 days. I once sent a DV letter, and no joke, they validated one year later.

As mentioned, any details with regards to what the contract says or doesn't say, or who fudged the contract after the fact, would have to be determined in court. The FDCPA and the DV process doesn't cover that, and that's not the intent of the DV. The purpose of the DV is to determine whether or not you did business with the OC and if money is owed. Any differences in fact would have to be hammered out in court.

[esme]

Hi Ilecs! You're probably the 4th fellow Washingtonian that I have come across on this site! Seems like there are a lot of us in the MyFICO community lol.

I'm so glad you understand how bad traffic is out here. It really is something one has to see for oneself to truly understand! Only in DC can it take an hour to only commute 15 miles to work. It's so absurd. Which is what ticks me off the most about the school owners who didn't honor our agreement. The karate school is located in Manassas, and I was living like two blocks away (literally) from the school at the time. The reason I am so certain that I would not have signed the contract with what I believe to be an added "outside of N. VA" stipulation (after-the-fact) is because I love my job and never had any intention of moving outside of Northern VA, only a local relocation that would make my commute to my office in Tysons less of a daily nightmare.

From Manassas we moved to Chantilly, which isn't very far from Manassas, but Manassas' roads and infrastructure is so severely clogged and poorly designed, it makes it hard to get to, especially in time for the childrens' classes that start at 6:30. There have been times when I've left Tysons to pick up my son from his new school in Chantilly and STILL got stuck in enough traffic that I've had to call the school last minute to say I wouldn't make it in time to pick him up by their closing at 6:30! And the school expects me to be able to pick him up and then drive him to a class in MANASSAS that begins at 6:30! I was fully aware of the traffic situation when I signed my son up which was why I tried to cover my bases before agreeing to sign.

Anyway, enough ranting. I think you bring up an interesting point about the possibility of the school writing off the unpaid balance for tax purposes, especially with it being February and tax season. But what would stop them from simply telling their collection agency to just report the debt to the CRAs as a charge-off? I'm still just really nervous about getting my hopes up that this issue miraculously resolved without further action on my part. Its deletion resulted in a 43 point jump on my TU FICO score, so no complaints here! But I just seriously hope it's permanent and not a sign of worse things to come.

Thanks so much for both your insight. I see clients in DC and Crystal City myself from time to time, you a fellow contractor, too?

[llecs]

The tax idea is just a theory. May or may not be true, but each year when I prep out taxes, it's right about now that I start writing off certains debts owed us as being non-collectable and declare that on our taxes. If this is what they did the CA should no longer be writing or calling or even reporting since no money would be owed. They cannot collect on it if they declare it on their 1120, 1040 or however they do their taxes. If they did, then they are lying on their taxes, but you'd have no way of knowing.

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Thanks so much for both your insight. I see clients in DC and Crystal City myself from time to time, you a fellow contractor, too?

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Who doesn't do contracting in the area?!

[RobertEG]

A charge-off does not render a debt uncollectible by the creditor.  They can still pursue the entire amount.

"Uncollectible" refers to their view of your probability of remitting future payment, not their authority to collect the full debt.

[Anonymous]

Hi Esme, I recently had a similar experience with a medical collection that just vanished off all 3 CR.  What ever happened with your account?  I see this situation is from a few months ago.  Did you ever find out why the account disappeared and did it ever come back?

[2NE1]

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@llecs wrote:

A fellow Northern Virginian! I'm in Burke. And yes, traffic is terrible depending on where you commute. Thankfully I work in Fairfax, but I've seen clients in DC and my commute is often an hour or more just to go 12-15 or so miles from my home.

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LOL, try commuting from Fredericksburg to Herndon! almost 2 hour drive! and then back and forth drives to FFX for school! ahhhh ~

[llecs]

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@2NE1 wrote:

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@llecs wrote:

A fellow Northern Virginian! I'm in Burke. And yes, traffic is terrible depending on where you commute. Thankfully I work in Fairfax, but I've seen clients in DC and my commute is often an hour or more just to go 12-15 or so miles from my home.

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LOL, try commuting from Fredericksburg to Herndon! almost 2 hour drive! and then back and forth drives to FFX for school! ahhhh ~

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Ha! I do have a client that lives in Fredricksburg as well, but commutes to Rockville. He's going on 25+ yrs of that now. Not to rub it in, but mine only invloves a dozen or so traffic lights for 15 min. or so.    Are you at NOVA-FFX?