Collection Atty. has me in a corner- NEED ADVICE

[Anonymous]

A little long and full of mistakes I made. Please bear with me, any advice is greatly appreciated.

I received a quick cash loan from XXXX-Credit Union in Sept 04 for $1,500. I was out of work, so I don't think I even made one payment.

In Feb 08 I called the Credit Union to work out a payment plan for the account. They said it was no longer in their office and gave me a number to call. I spoke to a rep at XXXX-Law Firm out of MN,(I live in VA). I wanted to settle the account, but didn't have the money when I spoke to the rep. I set up payments for $239.00 a month. Rep said I could call and settle when I had a lump sum. Said the total balance was $2,798.00.

I gave him my debit card number and have made two payments. After being on this board reading and learning. I realize I was dumb, so before my 3rd payment was due this month. I called my bank explained the situation, my bank flagged my debit card as lost or stolen and it was immediately deactivated.

I called the Rep on the same day to settle the account for $1,200 including the 2 payments I already made. He told me that the OC Credit Union does not accept settlements and he could not accept one from me on their behalf. No surprise but this is not what he said on our first conversation. And the balance is now $2,560 (or something like that). But doesn't make sense since I've paid $478.00 already. And he mentioned that my payment was rejected. I didn't tell him that I had the card canceled.

Anyway, I called the OC Credit Union, they said since they are a Non-profit they can no longer accept payments on this account since it's charged off. And that the account was turned over to CU Recovery (not the Law Firm) they gave me CU Recovery number but I was not able to reach anyone on Friday.

At looked at the letter from the Law firm and at the bottom in small letters is this
Client: CU Recovery-Tier 2
Client ID: XXXX
File #: XXX
Also,
The only information on my credit report is the OC, for $1,500.

How should I proceed from here? I told the rep at the Law Firm I would call him back on Monday. He thinks, I'm trying to take out a loan or borrow from relatives to pay them off. I'm not, those were his suggestions.

With the way things are and other bills I'm paying off. I can't afford to keep paying the monthly payment. I really want/need to settle this account without having to pay back double what I borrowed.

Thanks in advance.

[llecs]

I would do three things.

First, I would stop calling. Never ever call a CA. Many reasons; if you want a few just ask.

Second, I would send a DV letter to the CA (law firm). This would stop the collection activity and give you more time to save $$$ to payoff the debt. A debt validation by the CA would also breakdown the charges and fees they seem to be charging you. Per the FDCPA, it is illegal for a CA to charge collection fees. Now it is OK for the OC to continue to charge late fees (up to a point) and also charge interest. The CA may be reflecting those charges.

Finally, I would contact the OC and ask for a written breakdown from them.

Save money as quick as possible and then offer a PFD once you are very near to the 100% owed mark. But only do this after you get responses back from the OC and CA.

[Anonymous]

Is this being reported by the OC...CA or anyone?  What state are you in?

Never talk to a CA even if it is inhouse collections!!!   

What is the DOFD/DOLA    before it was COd?   in other wordes...when did you stop paying which would have caused the account to be COd or closed?

[Anonymous]

llecs-
thanks for your advice. Just reading this board I have learned so much. Since I joined a couple of months my FICO has increased 50 points. This was a situation I got into before I fully understood how to handle them. I will mail out the DV tomorrow.

HappyDays-
I live in Virginia. This account is only being reported by the OC, showing balance $1500. The DOLA on EQ 7/05 and TU 11/05. I'm not sure which is correct.

Message Edited by DebtFreeMe08 on 04-20-2008 08:05 PM

[Anonymous]

I never heard of a CU being non profit...they do charge intrest.  By making a payment you might have reset the SOL.  I would check with a lawyer and get the correct info.  Many states have laws about what intrest can be charged on an old debt.

It sounds more like the debt was sold. Make sure that you keep all hard copies of your CR with the OC reporting because that should have all the correct dates.

Never admit to any debt with a CA!!!   If they call do not talk to them    send the DV  CMRRR

[Anonymous]

As far as I know, all CU are non-profit. Non-profit has nothing to do with the fact they charge interest. It has to do with the fact they do not make money for profit. It is all returned to the members. This allows for higher dividends paid and lower interest rates. CU are also exempt from federal income tax and in some instances, state taxes.

Message Edited by guiness56 on 04-21-2008 12:17 AM

[Anonymous]

Is it against the law for an Collection Atty to charge interest on a Charged-Off account they bought? The Atty is charging 29.00% interest. Which was the interest on the original loan.

But, the OC is not charging late fees or interest on this account. The amount on my credit report has been $1,500 since 2005 and has not updated since the account was charged off in 2005. (I borrowed exactly $1,500).

How can the CAtty charge interest but not the OC?

[Jesedmotherof5]

Good Question- Bumping this to the top as I have had this on my mind for months I have to CA charging LOTS of Intrest

[llecs]

---

DebtFreeMe08 wrote:

Is it against the law for an Collection Atty to charge interest on a Charged-Off account they bought? The Atty is charging 29.00% interest. Which was the interest on the original loan.

But, the OC is not charging late fees or interest on this account. The amount on my credit report has been $1,500 since 2005 and has not updated since the account was charged off in 2005. (I borrowed exactly $1,500).

How can the CAtty charge interest but not the OC?

---

Read into this as you want from the FDCPA:

§ 808. Unfair practices

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.....

I guess you would have to check your T&C. I do know that some states will cap the limit. VA, for example, is 18% (last time I checked). But check with your particular state. The question to ask with the above statute is this: Who is the agreement with, you and the OC or you and the CA?

[Anonymous]

llecs -

where can I find this information relating the interest rate Cap? I am in Virginia as well. Also, how can I find out if this Atty office is authorized to collect in Virginia. They are based in Minnesota.

Thanks in advance