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CC contract in one state now living in another.


luv2bhappy
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Hello Everyone,

I'm new to this forum and have already found lots of helpfull information.

My question.... I have 2 recently charged off cc accounts that have been placed in collections. I've been reading that they can follow the rules of the actual state in which the contract was made or where I am living now. I am now in MI which requires licensing ect but PA where I obtained the cards does not. How would I go about inquiring which laws they are using.

Thanks in advance!

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You're referring to CA licensing, right? They must adhere to the state's laws where you live now AND their own. Meaning...if they are attempting to collect from you in your state, then they must abide by the state's licensure requirements (make sure you read up on how "collection agency" is defined per the statutes). For their state, if they intend to do business in that state, then they must comply w/ those laws as well. Licensing requirements are set for CAs trying to collect in a particular state, regardless of what state their main office is located. If your state laws says that they must be licensed and/or bonded to attempt to collect from a resident of your state, then they must be licensed and/or bonded!! On the flip side, if it doesn't require any licensing or bonding, then they are free to attempt collection (unless you use the FDCPA).

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Thank You for your reply! There is so much info in regards to debt collection and I find it very confusing. All I know for sure is that CAs seem very intimidating to work with. My charge offs are fresh and I'm going to try and settle with them as I have no desire to try and drag this out for 6 years...it's too stressfull, and I do owe the money. I think I'm basically judgement proof as all assets are in husband's name including all bank accounts. I'm hoping they will accept a pymnt schedule that I can make.

Thanks again!

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Guest E. Normis Debtor

You'll want to determine whether or not the CA is collecting on assignment for the creditor, or if they purchased the debt (JDB). If they purchased the debt, they are not a collection agency, therefore not subject to your states CA licensing requirements.

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My charge offs are fresh and I'm going to try and settle with them as I have no desire to try and drag this out for 6 years...it's too stressfull, and I do owe the money.

E. Normis Debtor raised a good point. If the OC still owns the debt, settle w/ the OC instead...and if possible, negotiate the reporting of the TL!!! If it was sold, then there's nothing you can do about the OC TL but it should be reported as "Sold/Transferred to Another Lender" and w/ a $0 balance. Make sure you read the statutes on CAs (& it's definition) thoroughly to make sure JDBs are not CAs according to MI's laws. In NC, JDBs are indeed considered to be CAs and are required to be licensed. Asset Acceptance is a very good example of that (in NC of course).

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Guest E. Normis Debtor

Asset would be a good example in MI as well. Since they own the debts they seek to collect, they are not a collection agency under MI law.

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What you read is the venue section of the FDCPA, which says they can only bring an action against you where you live or where the contract was made. That way, they can't go to a third, distant state to try to sue you. This is separate from any discussion of what law applies and whether they are legally entitled to sue in either state.

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My charge offs were purchased by Collect America and have been seperately placed w/ agencies in CA & NY...both "law office's of..."

The agency in CA, I can't find any info on, and the other in NY appear to be notorious "bottom feeders" ect....that paticular agency I sent a full C&D because the messages they left were very obnoxious, and they were calling family members after locating me and sending their demand letter. The first day he called he stated that "he'd try not to bother me elsewhere", and then proceeded to call a family member 5 minutes later. At that point I decided that I am not willing to work with them. I'm hoping that one will be placed w/ an agency that doesn't employ thugs as collectors. I'm willing to pay, but not willing to be burned on the cross...so to speak.

The CA agency doesn't take such a hard ball approach, but aren't willing to work w/ payments I can afford which is $200.00 a month. They of course want a huge lump sum up front. Which, if I could afford, I wouldn't be in this horrible mess to begin with. I guess they feel if they take me to court they'll get more. I am not employed outside of my home, so there are no wages to garnish.

I don't get it....I'm willing to pay, but it's not getting me anywhere. I guess if I can't get these guys to settle I'll save my money for litigation. I don't know what else to do.

Thanks so much for the help. I need it!

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You are all misunderstanding the LEGAL definition of assignment. Read:

assignment

n. the act of transferring an interest in property or some right (such as contract benefits) to another. It is used commonly by lawyers, accountants, business people, title companies and others dealing with property.

assign

1) v. to transfer to another person any asset such as real property or a valuable right such as a contract or promissory note. 2) n. the person (assignee) who receives a piece of property by purchase, gift or by will. The word often shows up in contracts and wills.

assignee

n. a person to whom property is transferred by sale or gift, particularly real property.

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Guest E. Normis Debtor

Sorry if the terminology was confusing. Legal definitions not withstanding, in the collection industry, working an account "on assignment" is synonymous with a contingency arrangement. Whereby the CA is not a successor in interest to any right, rather it's more like a homework "assignment". The real party in interest is still the OC.

Your legal definitions are accurate to a point, but assignments can be conditioned by agreement.

My point to the OP's question was, if the debt was purchased, rather than being worked for a contingency fee, the debt purchaser is now the creditor not a collection agency. Therefore the do not need to be licensed as a CA in MI.

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(e) “Creditor” or “principal” means a person who offers or extends credit creating a debt or a person to whom a debt is owed or due or asserted to be owed or due. Creditor or principal shall not include a person who receives an assignment or transfer of a debt solely for the purpose of facilitating collection of the debt for the assignor or transferor. In those instances, the assignor or transferor of the debt shall continue to be considered the creditor or the principal for purposes of this article.

I can see how a JDB could claim exemption with this twisted up nonsense.

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Guest E. Normis Debtor

I can see how a JDB could claim exemption with this twisted up nonsense.

So are you saying someone like Asset who purchases a debt would need to be licensed as a CA in MI?

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No, it's very similar to the Florida interpretation that allows JDB's to be exempt from licensure. Michigan actually looks a little worse.

The clauses "or due or asserted to be owed or due" and "for the assignor or transferor" leave the door wide open to abuse by debt buyers.

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Guest E. Normis Debtor

To me, it's fairly clear why a JDB is not a collection agency under MI statute.

Creditor....means a person...to whom a debt is owed. If Asset purchases a debt, all of the predecessors interests are conveyed to them through a purchase agreement. Asset is to whom the debt is owed.

Creditor or principal shall not include a person who receives an assignment or transfer of a debt solely for the purpose of facilitating collection of the debt for the assignor or transferor.

The exception can't apply as Asset is now the party in interest and their collection efforts are not for the benefit of the assignor.

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