Question on Collections Account

[Anonymous]

Follow this maze: My wife made a serious mistake with a credit card and made some decisions without my knowledge (she panicked a bit when a company threatened legal action), but here are the dots I've connected looking through her credit reports.

She had a Chase account with a balance over $8,000. The account is listed as transferred to another lender in Dec. 2007. My assumption is Arrow Financial (who I've seen mentioned negatively on these boards and elsewhere) took the debt, as there is an entry on her credit report from Arrow beginning in Dec. 2007 w/ a similar balance. From there, I believe the account was sent into collections beginning in the summer of 2009, to a company called Brachfeld Law Group in Texas. A quick Google search showed that Arrow and Brachfeld appear to be connected.

My wife was contacted by Legal Advocates for Consumers in Debt, a company I believe that is located in Chicago. They are paying $245 a month to Brachfeld (the statements from LACD are how I tracked down their name) and taking their $40/month off the top. Not ideal and probably not what I'd have done had I really known the situation, but at this point, it is what it is.

Here are my questions.

1.) On her credit report, Arrow continues to show balances in the $8,000 range and is listing the account in Collections, though it appears in the Closed Accounts section of her report. Is this OK? Should the entry from Arrow be reflecting a new balance? Should it continue to appear every month as in collections?

2.) Without knowing the full balance of the account as I'm typing this message (my guess is she's paid between $3-5,000 by now), what is the best way to go about having this item removed from her report as a collections account? It seems Arrow is awfully difficult to deal with based on what I've read. Is it even worth contacting them or their collection agency to determine a settlement?

Hopefully this isn't too confusing. I normally just read and don't post, but I've worked hard the last year or so getting my credit straightened out and would like to do the same with hers. I wasn't in nearly as bad a shape as she is at this point (I just had some debt to pay down), but it seems like we won't be able to get much done before tackling this issue and would appreciate any help.

[LIGHTNIN]

Hi and Welcome to the forums,

It sounds like LACD is a Debt management Service.A debt management Plan is where you pay one payment and they divide the money between your creditors that you owe.They take their fee,as you said $40off the top.These plans are usually for 3yrs maybe 5 I don't know.

Did your wife sign an agreement with LACD?     If she did,I would read it very carefully.

Has Arrow or Brachfeld sent anything in the mail to your wife?  If so, what and when?

What is the Date of removal for Arrow? look on her EX or TU CR's

Does you wife have the funds to maybe settle this debt, for less then the amount owed?

I would at least contact Chase, to find out who owns the debt. Ask Chase if they own it, or if they sold it, ask who did they sell it to.

I am not a expert, so maybe others will chime in. It's getting late so bye for now.

Oh BTW Do ya'll live in Texas?   just wondering.....sorry for all the questions,but maybe it will help others to answer.

[RobertEG]

Arrow apparently purchased the debt from the original creditor, Chase, but not as a debt collector, but rather as a simple creditor.

Arrow then apparently assigned, but did not sell the debt, to the debt collector, Brachfileld.  Is that correct?

If so, Chase is out of the debt picture, and any payment considerations. Arrow then apparently posted the $8K debt they purchased.  Since they are apparently still posting a non-zero balance, your CR says they (Arrow) still own the debt.  Brachfield can then post the same initial $8K under their CA, but that reflects the amount they are authorized to collect, and not the amount they own.  All perfectly proper.

Arrow did not post the actual CA.  The creditor only posts referral for collection.  The actual CA was posted by Brachfield.  The account with Arrow is closed.  Unless they update their reporting, which they dont have to do, their account will contiue to reflect, monthly thereafter, the last status and amount posted by them for collectio, i.e., referred for collection with a balance of $8K.  Again, all proper.

If subsequent payments were made to the debt collector, then they should, in any subsequent reporting, have reflected the current blance owed (i.e., original amount posted for collection, plus any accrued interest, minus any payments made).

Arrow is not the debt collector, and thus has no authority to delete any credit reporting done by the debt collector.  Deletion of the CA would require either their (Brachfield's) acceptance of  deletion of their CA reporting through a PFD, or alternately, a PIF to them, followed by a GW request.

Alternately, since Arrow still owns the debt, they could still technically accept either a PIF or a PFD, but such aceptance by Arrow would not require any deletion of the CA reporting by Brachfield.  Then deltion of the CA would be by way of GW to Brachfield.

No matter who you ultimatley pay, once the debt is satifisfied, both will be required to update their accounts to $0 balance owed.

[Anonymous]

Thanks for the replies. RobertEG, thanks for that info. You're also correct on the chain of events from Chase to Arrow to Brachfeld. As of now, Brachfeld is not showing up on her Credit Report. It seems to me, based off your answer, like my first course of action is to contact Arrow to see if I can get a PFD number from them. That being said, it also wouldn't surprise me if they're unwilling to offer me anything and we just need to let this item run its course over time.