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settling very low monthly payments..Possible?

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I received a letter from a lawyers office collecting on behalf of Discovery. They sent me a draft of a Civil Action Complaint that they said they intended on carrying out by a licensed attorney in my state (NJ). I freaked out and called them (they're in GA) and was transferred to their pre-legal dept. The lady said the only way to avoid going to court was if I agreed to 1 of 3 payment options. Neither of them was feasable due to what I make and what I have in my measly bank account. I told her I needed to think about it and would call her back in 3 days. I asked that if i couldn't do any of the 3, what happened next? She informed me that they would go forward with the Civil Action Complaint. My question is, should I call her back and tell her exactly what I could afford every month (a meager $50.00) or let it go to court and try to tell a judge that? The total debt is $1,892.86 and it seems like they would have bigger fish to fry than me.

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First. to answer your question...no, I'd say its unlikely they'll settle for $50 / month, at least not without throwing late fees and jacking up the interest charges.

But...is this letter the first you've received from the CA regarding this debt? To threaten legal action without them actually planning to do it is definitely in violation of the FDCPA and to send you a copy of the papers they intend to file would even fall under the "overshawdowing" provisions of the FDCPA.

You might have ground to tell these people to pound sand...

Have you gone throught the DV process?

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Truth be told this is from a card i had back in college about 3 or 4 years ago.

I made the stupid decision to not pay and ignore their phone calls throughout the years. I'm sure I received plenty of notices (from the letters i occassionaley opened) from the collectors asking me to pay. I assumed once I graduated and got a good paying job, I'd just deal with the accrued late fees and interest charges and pay up. I'm almost there where I have some money left over every month to pay but not yet. The only reason this letter stood out was because it was specially FedExed to me and said I had to respond within 10 days of the FedEx signed for date or they'd move forward with the attached draft of the Civil Action Complaint. Forgive my stupidity who is the CA? If you mean Discover then no, I've seen the bills requesting money all these years. If by CA you mean the lawyers office, then yes this is the first legal letter. The attached court-looking papers look like something they woulld file to a court house but it says DRAFT in really big grey letters in the background. I'm regretting now not having atleast tried to tell the old collectors that I was broke and tried to settle up through somekind of forbearance. But now I'm just trying to see if I can buy some time until I get a better paying job, thats all I want. Is there a legal way to say "I know I should tried to settle up earlier before it became legal but now that it is, just give me 6months to find a better paying job so we can discuss payments?" Im scared they're gonna just file the papers and start the court stuff, in which case I'll end up trying to explain the same thing and have my wages garnished. What is the DV process?

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Hmmmm....well again, if its been 3 or 4 years since you actually paid anything on this account, I don't think they're going to give you more time willingly.

However...answer some more questions...

1. Is the letter from Discover, an attorney representing Discover, or an attorney saying "we are collecting this account"? Does it say anywhere on the letter "This is an attempt to collect a debt"? This is all important, because if it is Discover (the OC, Original Creditor) suing you, then you've got one set of options. If its an attorney acting as a debt collector (the CA, or Collection Agency) you've got another set.

2. What state do you live in? What state where you in when you first went delingqunet on the card? EXACTLY how long ago was it that you made the last payment on the card?

3. Have you checked your credit reports? Discover is undoubtably listed. Does it say "charged off, transfer to another lender"? If so, then...

here's WillingToCope's sermon #1: If this debt has been "charged off" and sold to this attorney, then the OC has already been compensated by the US Taxpayer for their loss. The CA paid pennies on the dollar for the right to continue to hassle you...you DO NOT owe them anything. That doesn't mean that they won't use all their legal resources to try to collect something from you...but...you can settle this for much less than the full amount. You have another set of option here...

So...bottom line...give us some more info...maybe we can help deal with this. (Also, are there other Credit Cards (CC) that you haven't paid in awhile? Other debts?)

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Sorry for being vague.

1. No it is not Discover. The letterhead in the FedEx package was definitely from a lawyers office. On it they state that they're client is a company called Credigy Receivables Inc. and is in regards to a Former First Select Inc. account. In the same FedEx package are the DRAFT papers they say they plan on filing and in it somewhere it mentions that the Original Creditor is Discover who then assigned the account to First Select Inc. I am inclined to believe that Discover is no longer in the picture and that Credigy Receivables Inc. are the ones now trying to collect. But its hard to say what it means by "assigned" the account. And I dont get the connection between The lawyers client (Credigy Receivables Inc.) and the people who Discover assigned the account to (First Select Inc.).

2. I live in New Jersey and was in New Jersey when it became delinquent. It's been a long long time since I last made payments. I'd say atleast 3years ago.

3. No, I havent checked my credit report, who is the dirt cheapest company to do that with?

That point you make in the end...Even if Discover did sell my account to these guys and Discover is out of the picture. Can these guys still take me to court and successfully have my wages garnished? This is the greatest underlining fear of mine, I just really need to buy more time until I find a better paying job. I'll be in tons of trouble if they go after 25% of what I make NOW.

Yes I do have other Debt. But after I received this letter I got on the phone and called them before anyone of them take it to this level. I'm trying to negotiate some kind of forbearance period until I can afford to pay them back. Forbearance...a word I am learning to like/hate.

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Alrighty then...first thing you need to decide is if you're going to fight, or roll over. If by "...called them..." you mean the original creditors and they will still talk to you, then you might be able to work out a forebearance. Recognize however, that these are just temporary...6 to 12 months, and they come back nastier than ever after that period.

If by "...called them..." you mean other collection agencies, DO NOT talk with them on the phone. Insist that all communication be done in writing. They'll lie and try to intimidate you...DO NOT agree to "check by phone", "post dated checks", or anything else that give them automatice access to your checking account. These people will not abide by anything they tell you verbally and will steal your money if you let them. And paying them anything does not guranantee that your record will be cleared...they may not even apply the payments to the balance you owe.

Be very...very...careful...

And, back to the discover card questions.

1. This is definitely a collection agency. The FDCPA applies. You can real all about it in the menu item at the top. If this is the first letter you've received from Credigy (do a search on these guys...they're bad news) and/or their lawyer then they are guilty of "overshadowing"...do a search on that. If you've don't know if this is the first letter...assume that it is...and send them back a Debt Validation letter CMRRR stating that they must first verify this debt is yours and they have the right to collect before you can reply. You might also use the term "overshawdowing my rights" in your letter.

2 NJ's statue of limitations (SOL) for CC debt is 6 years. If its been 6 years since you last paid on this debt, then it might be beyond the SOL which means they can't legally collect. Doesn't mean they won't try, just that you have a perfect defense against them.

3. Technically, you're entitled to one free report from each of the three major credit reporting agencies each year. You'll find phone numbers for each of them in the "stickies" in the Credit Bureau forum. You're also entitled if you've been denied credit, or are unemployed. You can also search this site for other ways...

And...can all this wind up with a garnishment? Yep...although I think the limit in NJ is 10%, and there are ways to fight that too. It isn't all automatic...they need to sue, win, get a judgement, and turn that into a garnishee. All that takes time, and you can make it very difficult for them all along the way.

Like I said at the top...you need to decide if you're going to fight or roll over.

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I honestly dont know how to thank you enough. Your advice has brought me a calm and given me the strength to move forward. I was so bummed out when I received this letter and with your advice, I really have the tools I need to move forward. I figure at the very least I'm not gonna fight the claim to the money, but I figure sending them that Validation letter will atleast buy me some time while they collect the data. I'm sure you hear it alot but I really am looking for a better paying job (im moving to Ohio). By the time they pull it all together, I really think I'll be ready to just start settling a repay. And even the smallest time allowed in a forbearance (6months maybe?) is just enough time for me (fingers crossed) to deal with the other guys(CCs'). Like alot of people, I stupidly abused my credit in college and having just got out, have a long path to repaying and establishing my credit again. But again, with kind,smart, and extremely helpful people such as yourself and great sites like these, you have really made me feel motivated to get my act together and just deal with these guys head on! I will be using the sample letter from this web-site to request Validation. Two final questions:

1. The lady at the lawyers office in the pre-law dept. said to call her by this sunday (Oct. 17) to tell her how I'm going to pay. Should I call her and explain I will be putting in a letter of validation? Or should I just send it and not call her?

2. Sorry, I'm really bad with acronyms. What do the letters CMRRR mean? You wrote it in your last reply?

willingtocope you have been truly one of the most helpful, cut-to-the-chase, and direct person I have talked to about money, credit, law...I can tell you do this out of the kindness of your heart but if theres ever a way I could return this favor, please dont hesitate to ask. Thank you for all your help.

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Hey...glad to help...I'm just working on a "pay it forward" arrangement. Other people here have helped me, and I'm just trying to pass it on.

As to your questions...

1. No. Don't call. No reason to talk with those people again Send the letter immediately. Make sure that it not only includes a request for debt validation, but that all further contact with you is to be only via the US Mail.

2. CMRRR = Certified Mail, Return Receipt Requested. Its proof from the post office that you sent the letter and that they received it. (If you don't send it this way, they'll just deny they got it). You'll have to take your letter to the post office...it'll cost about $4.95 or so. You might want to pick up a supply of the "green cards" and tags that are used for this...you'll probably be doing more, and it's easier if you have them filled in ahead of time.

NOTE: By law, under the Fair Debt Collection Practices Act (FDCPA) once they receive your letter telling them not to call, they are allowed to call you one more time to tell you what they intend to do. If they do, don't panic, don't answer any questions, and tell them to send you the validation you've asked for.

Good luck...

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  • 1 year later...

how did this thread turn out? did they actually sue the kid? They tried to pull some crap like that on me, but I think they cleaned up their act a little bit first, I actually got a legal dunning letter. Doesn't mean they didn't try to screw me over, or that they had any proof of their claims, just that they are trying to look a bit more legit.

What happened, kiddo? Let us know!

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