Old overdrawn checking account in collection but not listed on any of my reports

[Anonymous]

Hi I was hoping thatone of you out there might be able to give me some advice on a situation that has come up recently. I have had a few collection accounts and a write off that I have been working hard at to pay off. I recently recieved a "Litigation notice" from a company that apparently bought a the debt from an overdrafted checking account that I had when I lived in Florida (now live in Virginia). They have a fancy name that tries to make them sound like a law office, but through some internet searching they are a fictitious name for another company with the same address. 

The letter is as follows:

Due to your continued disreguard towards this account, you are hearby notified that a recommendation to file a lawsuit to collect this debt is being processed. A judgement against you could seriously impact your credit profile, your ability to open future bank accounts, and/or your ability to rent or purchase with financing.

This may become a serious legal matter and increase the cost of collections. Your prompt attention to this matter is recommended.

It goes on to tell me to contact the original creditor to validate the account which I did. I asked OC if they could tell me the date the account closed and the overdrawn amount at the time it was close. They were only able to give me the date as apparently all financial information is removed after 24 months. The date OC turned it over to collections was October 2010 which I believe if I am not mistaken out of the 5 year statute of limitation for this type of debt for the state of Florida. These people are also asking me for nearly $1200. I am positive that the account was never overdrafted for anywhere near that amount, but unable to verify with the bank unfortunately. This has not been on my credit report and I also went ahead and pulled ChexSystems report as well and nothing there.

I am really unsure how to procede with this. I  certainly don't want to have this pop up on my credit report. I don't see them actually going to court over it since I am pretty sure it is out of statute of limitation. I don't mind paying my debts, but this whole things just feels kind of predatory and price gouging to me. Any advice or similar experiences would be appreciated. Thank you in advance!

[Anonymous]

Florida has a tolling provision in their SOL statute. But it only really applies when you return to the state. Basically the time you are out of the state does not count toward SOL. If they sue in florida, you would have to go to appear in court to raise the SOL defense, it is not automatic. Lots of CA's have sued past SOL and gotten default judgement because the debtor never showed.

Send them a written DV request asking for the name of the OC, the original amount before collection fees and interest and the DoFD. The written DV imposes a collection bar until they provide validation.

They can sue in florida, but you are not in florida, so collecting on a judgment would be complicated. For the sake of simplicity, suits are almost always filed in the debtors current state of residence. Virginia SOL would then apply.

[Anonymous]

Okay thank you. They did send me the OC and the account number. I called the OC to verify and they did say that they sold the debt to this companys parent company in 2010. I asked for the amount from them and they could not give it to me because they don't retain it past 24 months.

I went ahead and looked it up and the SOL for Virginia is 5 years for a written contract which would also be expired. It sounds like they only place they could sue me would be Florida as I would most definately go to court in Virgnia and raise an SOL defense. Is there any limitation on the length of Florida's Tolling. I could not find that. 

Lastly I am a bit new here and still learning the acronyms what is a written DV. I am also a bit curious as to why this never went to collection in the first place.

Thank you for all the help so far.

[Anonymous]

DV is Debt Verification

If the cannot verify the debt, they cannot collect on it.

[Anonymous]

Ahh okay, thank you. It would seem to me that they did verify it. They provided me the OC address, phone number, and an account number in the email. I am guessing that is enough information for that.

[Anonymous]

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@Anonymous wrote:
Ahh okay, thank you. It would seem to me that they did verify it. They provided me the OC address, phone number, and an account number in the email. I am guessing that is enough information for that.

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They need to be able to show the original amount before collection fees and interest.

Email is NOT a legitimate method of DV and it does not place them under any collection bar. Send them a written DV requesting the information above. If they do not provide all of that, write them back informing them that their validation is not adequate and that any further collection activity will be considered a violation the the collection bar in accordance with FDCPA and and will be addressed accordingly.

[RobertEG]

You have a complicated determination of expiration of SOL for several reasons.

First, the FDCPA explicitly provides debt collectors the option of bringing legal action in either the state where the contract that created the debt was executed, or in the state of your current residence, so you cant determine where the civil action, and thus prevailing SOL, will apply.

Yes, for various reasons, they will usually bring civil action in  your current state of residence, but that is not always the case.

The SOL used at trial will be that of the state where the civil action is being tried.

Second, the event that triggers begin of the SOL period can vary between states.  Some use the date of first default, while others use the date of last payment, etc.

Third, you have a period of non-residency in your current state.

Fourth, it can, if the party is aware that SOL has expired, be a violation of the FDCPA to sue or threaten to sue on a debt that is clearly beyond SOL.

You need a legal opinion as the the awareness on their part of the SOL status.

I would recommend consultation with an attorney versed in the provisions of the VA statute of limitations on debt for an opinion both as to whether SOL has expired, and whether the debt collector is reasonably charged with recognition of expiration of SOL, and thus violation of the FDCPA.

As for credit reporting, the expiration of SOL is unrelated to exclusion of a collection from your credit report.

A collection can appear in your credit report for up to 7 years plus 180 days from the DOFD, regardless of any expiration of SOL.

If assuring that the collection does not report is the primary concern, then perhaps the best option would be to make an offer to pay the debt in exchange for their agreement not to report a collection to the CRAs.

[Anonymous]

Thank you everyone for the advice. My main concern wasn't that I owed the debt because I knew that I did. My concern was the ammount. I bit the bullet and called. It was all very easy to work out. I am out of pocket $300 from what was originally an $875 debt that they brought to $1200. Nothing will get reported and I can keep my conscious in tact that I am squareing my debts up.