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Received a collection notice after approved for mortgage

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essilem
Valued Member

Received a collection notice after approved for mortgage

Just after I was approved for my mortgage last month, I receive a notice from Financial Recovery Services that they are trying to collect on an old account that I paid/settled previously (which is also noted correctly on my credit reports).  The account was for Dell.  It was opened in 2006 and in 2008 I settled, paying less than what was owed directly to Dell.  I did receive a notice of cancellation of debt at the end of 2008 for tax purposes since the amount Dell cancelled was over $600.  The exact amount was $663.52.  The collection notice I received states that I owe $653.43.

 

So, I just need to call them and provide them with my documentation showing that I don't owe Dell anything...correct? 


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Current Score: TU 674, EQ 625
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Message 1 of 9
8 REPLIES 8
Anonymous
Not applicable

Re: Received a collection notice after approved for mortgage

What probably happened to you is that Dell sold the remaining unpaid balance to a JDB (in this case FRS).

 

I would send a DV to FRS.  A letter that is short and to the point will suffice, like this:

 

Dear FRS,

I am in receipt of your letter dated xx/xx/xxxx in reference to account ######.

This alleged debt is in dispute in it's entirety.  Send me proof from Dell that I owe this.

All calls to any number are inconvenient.  Communicate by mail only.

Sincerely,
essilem

Also, don't sign the above letter.  FRS is known to have taken the signatures off DV's and transplant them onto documents that they can use against you should they sue you in court.

 

What will probably happen next is that they will either close the account, or send you "proof" of the debt.

 

What kind of outcome from this do you want?  Do you want them off your back?  Do you want to fight them in court?

Message 2 of 9
GoodCredBen
Valued Contributor

Re: Received a collection notice after approved for mortgage

If you settled with a debt collector.... then the OC cant just simply come after you for what you owe....

 

This seems absurd......

 

 

My credit journey has completed. I am currently sitting at 800+ across the board.

I started my journey here years ago, and thanks to MyFico, it really is possible.
Message 3 of 9
essilem
Valued Member

Re: Received a collection notice after approved for mortgage

I'll send them a DV letter.  I settled directly with Dell, it never went to a debt collector.


Starting Score: 611
Current Score: TU 674, EQ 625
Goal Score: 850


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Message 4 of 9
GoodCredBen
Valued Contributor

Re: Received a collection notice after approved for mortgage

you have a settlement letter from dell?

 

(keep it on the DL but i work for dell) HAHA

My credit journey has completed. I am currently sitting at 800+ across the board.

I started my journey here years ago, and thanks to MyFico, it really is possible.
Message 5 of 9
essilem
Valued Member

Re: Received a collection notice after approved for mortgage

I don't have the actual settlement letter anymore...but I have the 1099 for the cancellation of debt


Starting Score: 611
Current Score: TU 674, EQ 625
Goal Score: 850


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Message 6 of 9
guiness56
Epic Contributor

Re: Received a collection notice after approved for mortgage


@BadCredBen wrote:

If you settled with a debt collector.... then the OC cant just simply come after you for what you owe....

 

This seems absurd......

 

 


Unfortunately, yes they can.  If they still own the debt.  Anytime you settle, there is still the remaining owed and they can come after you.

 

If the OP received a 1099C, cancelled debt, and they reported it as income and paid taxes on it, then the OC cannot continue to try and collect.

Message 7 of 9
payingoffdebt001
Frequent Contributor

Re: Received a collection notice after approved for mortgage

Gosh all of this is So informative, whats the point of settling if they can come back later. I've never settled only paid in full..but this is good to know going forward, I now have 1 large collection on my reports, but I plan to let it fall off. 

 

Good thing OP said they do have a 1099 from this.

Message 8 of 9
essilem
Valued Member

Re: Received a collection notice after approved for mortgage

Good news...I just called them, Dell gave them the wrong information! 


Starting Score: 611
Current Score: TU 674, EQ 625
Goal Score: 850


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Message 9 of 9
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