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Can a debt collection agency attempt to collect money they say is still owed to the original owner?
My husband and I purchased a vehicle in 2004. We couldn't afford the paymets, so we returned the vehicle to the bank. They sold the vehicle for less than what was owed. Now three years later, a collection agency is trying to get us to pay what is owed. Our credit report as of 3/2007 shows the original owner reporting that the debt is written/charged off and we have a $0 balance as of 10/2004. Do we still owe this money?
I guess some of the other posters explained "why" you still owe the debt >
When the original creditor sells the repo, they almost always sell it for less than what the debtor owed on the original contract. That would leave a deficiency balance.
The debtor is still liable for the deficiency balance.
As for the reporting part of your question >
With the original creditor showing a $0 balance on the charge off, they are actually reporting correctly.
You are lucky they have not placed a deficiency trade line on your reports - so far.
A repo voids the original contract.
Because of that, while they legally can continue to report the charge off, they cannot legally show a dollar amount on the charge off.
They can also legally place another trade line on showing the deficiency balance.
If they sell/assign the debt (deficiency balance) to a collection agency, that agency also has a right to place a trade line on your reports.
So to boil it down - with a repo, a person may be able to expect three (or more) seperate trade lines concerning the vehicle debt.
The original account that has gone to charge off ($0 bal)
The deficiency amount reported by the original creditor
The deficiency amount reported by a collection agency.
The "or more" that I mentioned would be if a suit is filed for the deficiency and they get a judgment. If that happens, the judgment could also report
What happened with the car is a common practice, just like with houses. A loan is taken out and the property goes to the person making the payments. If they default, whether by not paying or by returning the property, the property is repossessed. (Even if you turn it in, it's still considered a repossession.) Then the original maker of the loan sells the property sometimes for the remaining value of the loan, but most times for the highest amount they can get. If they get the full loan value (which they rarely ever do), then you owe them nothing, but if they get less than the remaining value, you owe the difference. And since they can keep selling the debt over and over, you'd be better off just trying to either make a settlement offer with the agency or pay it in full.
One more thing: The Myth of collections.
Most people believe that once a debt runs for 7 years (or the statute of limitations) that it automatically drops off. NOT true! What happens is, the original maker of the loan sells it to a collection agency. When that collection agency has done all it can, it turns around and sells the debt to another one. And so on. Each and every time that debt is sold, the statute starts over. So the 7 year thing only applies to the original maker of the loan. After that, it could stay on your credit forever, because the debt could continue to be sold, and with each new collection agency comes a new negative mark against your credit for non-payment. Each of these marks will take 7 years to drop off, but the current collections activity will stay. Which is why they sell the debt; you may not pay them, but they continue to ruin your credit each time you don't.
What your original lender did was write off the debt as noncollectable but this doe's not mean that you don't still owe it. They sold your debt to a collection company and now they are coming after you for it. All perfectly legal.
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10034289
As far as I can make out, the law is pretty much the same in the US (which I assume is where you hail from, as you specify $)
I am surprised that it has taken so long for collections to start on this amount owed.
You are responsible for the money and basically have 2 options.
- Offer a payment for deletion. All correspondence should be sent certified return receipt to create a paper trail. If they agree, get it in writing. If it is not in writing, it is not enforceable.
- Leave the debt alone. It will fall off 7 years from the date it was reported.
Good luck
Can a debt collection agency bankrupt me?
I have received letters and calls from a debt collection agency over a $2000 credit card debt, yes the debt is mine, however the caller is always rude so I do not offer much to her. Now I have received a letter stating that the are commencing bankruptcy proceedings against me and with that letter was a copy of my land title. Can they really do this? What should I do?
I think you need to re-read the letter. They can not file bankruptcy on your behalf. Credit Card Debts are unsecured and they can not take property to satisfy that debt. The only time they can take property is when that property(Car, Land) was a security in the debt. They can however sue you for the money owed, and you may have to sell something to pay the judegement.
Now if the debt was somehow secured by the land they could start foreclosure proceedings against you. I would consult an attorney who deals with Bankruptcies and Foreclosures. Generally their first consultation is free so it should only cost you time.
If the letter says what you say, then what they are telling you might be illegal. The lawyer should be able to help you take action against them if it is. They are not allowed to threaten you with actions they can not or have no intention of taking.
Collections agents will use any underhanded trick in the book to scare you into paying them before making a mortgage payment or utility payment. They want their money and don't care what they have to do to get it. This is just a creative scare tactic to get you to put them at the top of your list of priorities.
Next time they call, tell them that their letter sounds like a good plan and for them to go ahead with it. You'll see a new tactic immediately.
If so, pretend someone just sent you a winning lottery ticket. If it says what you claim, they just violated the Fair Debt Collections Act which prohibits a collector from threatening actions they do not/can not do.
Sending copies of your property title implies further legal action.
I would see if there is a local attorney who can look this over, hopefully someone with some knowledge in collection laws.
If I was handling this, I would immediately send a letter to the collection agent point this out, and demand a full debt validation. Be sure to look at the Fair Debt Collection Act and ;you will see what I'm talking about.
Worst case, if they do sue you then you can counter-sue for their violations. This will void out the attorney fees and maybe get you $1000 knocked off the debt.
How do I get a debt collection agency that has the wrong number to stop calling me?
Some debt collection agency in Georgia keeps harassing me, looking for somebody named Sarah at my phone number. I do not know a Sarah. They have the wrong number. I have told them multiple times that they have the wrong number, but they keep calling me (obviously they think that I'm lying). How do I get them to stop calling me? They call with restricted numbers so I don't even know how to get back to them.
You need to be civil 1st off, being a jerk to these people will only result in more calls. Tell them this is not Sarah's number, and that you need to be put on there do not call this right now. And if you get another call, you will involve your attorney.
If being polite doesn't do it,
and filing a phone company complaint doesn't do it,
try lodging a complaint with the Better Business Bureau that covers the area where the collection agency is located. The BBB will contact the firm, and many companies take the BBB pretty seriously.
Can I take a debt collection agency to court for harassment?
Hi, I was laid off from my job about four months ago, ever since then I have been struggling with debt. One of my debts has been handed over to a debt collection agency and I recieve about thirty phone calls a day from them, asking for the money I owe. I have told them my situation and that I would be more than happy to pay them back as soon as I find work, yet they still keep calling all day, every day.
On top of that, I recieve about five letters a day, all from the same company, all of them say the same thing.
Is this harassment? Is there anything I can do about it?
it is not harassment as defined by UK law there is not a lot you can do about it.
obviously you have not made any arrangements to pay at least something each week or month.
offer them say £5 a month and if they refuse this offer then continue to pester you WITH PHONE CALLS THEN IT IS HARRASSMENT CONTACT THE POLICE THEY ARE BOUND BY LAW TO INVESTIGATE
Have you tried coming to an arrangement with them?
Additional to wizjp:
The whole world doesn't fall under US laws. Go figure.
A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.
(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.
(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3)1 of this Act.
(4) The advertisement for sale of any debt to coerce payment of the debt.
(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.
(6) Except as provided in section 804, the placement of telephone calls without meaningful disclosure of the caller's identity.
INfo here
(Sorry for trying to help here Paul; the question string doesn't indicate a country and neither does the post; and the majority of the questions asked are US based. )
the best option is to contact them and make arrangements to pay them an affordable fee.
they will leave you alone if they are receiving something, rather than nothing.
go to CAB who will advise you accordingly. debt collectors just increase the pressure you are under and i don't know how they get away with it sometimes.
i had the same thing a few years ago, over £7.50 which i ran up for not taking two DVD's back to the video shop. I saw the funny side at first but it gave me an insight into how harrassing they can be, they were really persistant and nasty.
Get some legal advise fast, and look at your options.
also if they call on weekends. But record everything. And if you tell them to stop calling you and they don't[you have to tell them to stop calling this number or at your work]then there are laws for all of that , what I just told you.Plus you can pay them $5.00 amonth and then they have to stop bothering you, as long as they are receiving something they don't care and can't do anything. Plus there are allot of free agencies that can set up payment plans for free for you and they contact the collection agency and you don't have to talk to them. Hope this helps it helped others.
Monday to Friday....free advice!
The worst thing you can do is to ignore them as they will hound you forevermore if you do.
I hope things get sorted soon but you need to be proactive by helping the process along.
What is good letter to write to collection Agency if they didn't verify a debt?
I sent a letter to debt collection agency to validate a debt they have on me. I sent the letter certified mail and got a reciept. It has been more than 30 days since they got the letter. Should I send a followup letter, or repor them to the FTC and BBB for putting a debt on my credit report they can't validate?
Collection agencies are the lowest of the low, beneath even politicians.
Call a lawyer.
The Fair credit reporting act.
I used "Credit Solution" to settle my debt and improve my credit score.They managed to reduce my debt up to 58% .It's legitimate.I came across this company on NBC News Special Edition.Check it out here:
http://doiop.com/di10gd
When a debt is purchased by a Debt Collection Agency, do they become the creditor ?
When a debt is sold to a Debt Collection Agency (via a deed of assignment), does the Debt Collector becomes the Creditor for the purposes of the Consumer Credit Act 1974 and are the rights and duties assigned? Please state court case, legislation in your answer.
after being a general adviser, on debt amongst other things, i can say that the answer is definatley yes - the debt collection agency who the debt is sold on to then become the creditor.
i cannot supply you with any legal cases on this, but you could try searching this site for relevant legislation http://www.opsi.gov.uk/legislation/about_legislation.htm
My debt to a credit card institution has been transferred to a debt collection agency recently?
Does this mean that i'm now listed as a bad credit person? if i come to an agreement with the collection agency to pay my debt back in instalments, will my credit rate be ok then?
When you call don't offer them anything! ask them what your options are. Be nice when their done ask them what other options do I have, and then one more time ask and your company has no other options and has never made arrangement for special situations?
Then you ask for all of their contact information (address 800#, and Fax) Ask as many questions as you can think of, keep control of the conversation. If you ever loose control tell them thank you for your time and hang up the phone. Never agree to anything unless you know your able to do it.
Can a Student Loan debt collection agency garnish a bank account in the state of NC? How about SS benefits?
Letter from student loan debt collection agency states they will be investigating the person's financial resources to find the funds to pay the debt. Can they take the money out of the person's bank account via garnishment in the state of North Carolina, with no court order? What about future social security income-can they take that? thank you
Here's a list of banks in North Carolina that can help. http://www.banksintheusa.com/North-Carolina-Banks.html
I have had my identity stolen, do I have to pay the debt collection agency?
I can prove when I moved from an old address, I have P60's and solicitors letters from when I bought my house. The lady who moved into my old house stole my identity after my mail stopped being re-directed to my new address. She appears to have opened a bank account in my name & abandoned it in debt. I have received a letter from a debt collection agency demanding the money. She has left the property now as it has been demolished for re-developement. What are my rights?
Received a letter from debt collection agency for old bill what should I do?
The bill itself is student overdraft which I took out in January 2003 the bank sold this to this collection agency (according to them) in 2006. I have so far made no contact, received the letter this morning. I've heard some people write on envelope that they've moved to get rid off them. Has anyone any experience with these companies and having debts? What would you do?
You will not get rid of them. Took out in 2003, not paid since then sold in 2006, contacted you in 2008, statute of limitations most likely is up and they are trying to collect. First yes read what they wrote, the new thing to do is buy old debts take them to court to see if the consumer is unaware of their rights, or do not show up then get a judgment against them for no show.No be proactive, call and ask for proof that this is owed. Next tell them hey even if it was which it is not what are you doing the statute of limitations has expired, and if they take you to court show up with the same defense. The SOL can only be reset if you make a payment, and the debt can only be listed by the original debtor. Unless you make a payment to the scabs. It will only be on your credit report for 2 more years, and even as it is on there is listed as an old debt. If the collection agency adds it to it they are in violation of the laws.
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