topic Collections Agency went out of business + OC says they still have my debt in Rebuilding Your Credit

Collections Agency went out of business + OC says they still have my debt

LRC — Tue, 16 Jan 2024 03:26:58 GMT

Hello,

Enhanced Recovery is shown on my credit report as being the collections agency that owns my debt from a charged-off Barclay's credit card.

I was told today by my Debt Management Plan folks that ER has not cashed any checks they've sent them for almost a year, so they're taking them off the plan and putting the money towards other debts. The DMP folks suggested I call Barclay's to find out who owns the debt.

I did. Barclay's says that Enhanced Recovery owns the debt.

I called Enhanced Recovery, and I got a recording that said they are closing their business, and all debts will be returned to the original creditor.

A. Should I dispute this on my credit report, because it seems like an error to me?

B. Any other advice?

Thanks very much.

Re: Collections Agency went out of business + OC says they still have my debt

markbeiser — Tue, 16 Jan 2024 03:51:17 GMT

You could try it and see what happens.
It may go away, then reappear in the future if whoever actually owns it now reports it though, which may or may not ding your scores, depending on how old it currently is, and what else is going on in your profile.
You would at least know who to deal with then.

Re: Collections Agency went out of business + OC says they still have my debt

LRC — Tue, 16 Jan 2024 04:11:49 GMT

Thanks! Good points.

Re: Collections Agency went out of business + OC says they still have my debt

bass_playr — Wed, 17 Jan 2024 17:03:15 GMT

There may be another issue in play on this one.

I don't know what state you're in, but some states have laws that say if you attempt to pay and they do not accept payment, under some circumstances a refusal to accept and credit the payment MIGHT be a waiver of the obligation. Additionally, you might want to take a look at section 3-603 of your state's UCC. The federal one reads as follows:

(a) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument, the effect of tender is governed by principles of law applicable to tender of payment under a simple contract.
(b) If tender of payment of an obligation to pay an instrument is made to a person entitled to enforce the instrument and the tender is refused, there is discharge, to the extent of the amount of the tender, of the obligation of an indorser or accommodation party having a right of recourse with respect to the obligation to which the tender relates.
(c) If tender of payment of an amount due on an instrument is made to a person entitled to enforce the instrument, the obligation of the obligor to pay interest after the due date on the amount tendered is discharged. If presentment is required with respect to an instrument and the obligor is able and ready to pay on the due date at every place of payment stated in the instrument, the obligor is deemed to have made tender of payment on the due date to the person entitled to enforce the instrument."

Now, you may have an argument about whether or not "they didnt cash the checks" equals "refuse payment", but I would absolutely argue that since you put those funds in their hands, you at the least should not be made to pay the amounts again. Food for thought, your mileage may vary, but it's definitely worth looking into. Under the federal code, it won't result in a discharge of the whole obligation, but it could result in a discharge of all the amounts you paid that they did not credit, even though your debt management company stopped those checks and sent that money elsewhere. I am not a lawyer. Research your state's laws and see what they say.

Re: Collections Agency went out of business + OC says they still have my debt

bass_playr — Wed, 17 Jan 2024 17:09:28 GMT

Also, you may want to give this a look:

https://www.bbb.org/us/fl/jacksonville/profile/collections-agencies/enhanced-recovery-company-llc-0403-16000495

According to this, they deleted all credit reporting back in November. If they are still on your report, I would dispute with the CRAs because as they have closed their doors, they no longer have any permissible purpose to be on your credit reports or access them. If it comes back verified, you KNOW there's something wrong because there's no one at the company to receive notification from the CRAs or to respond with verification. That would let you know that the CRA used a system called E-OSCAR to verify it themselves based on previously reported info, which they are technically not supposed to be able to do.

Re: Collections Agency went out of business + OC says they still have my debt

markbeiser — Wed, 17 Jan 2024 22:57:17 GMT

@bass_playr wrote:
If they are still on your report, I would dispute with the CRAs because as they have closed their doors, they no longer have any permissible purpose to be on your credit reports or access them.

That is how I got a 30 day late mortgage payment from 2018 removed from my reports in 2022.
Ditech was servicing my mortgage in 2018, but went under in 2019 or so. Mortgage servicing was transferred to Shellpoint, but the derogatory was still under Ditech, and had their no longer valid mailing address and phone number.
Disputed it, and it was gone from my reports within a few days.