CollectCorp collecting valid debt with AMEX

[scottythenut]

I have a rather large debt with American Express, and the sent CollectCorp after me for it. I did not ask to validate, because the debt is real and I want to pay, but only now can afford to send them some money.

They want bank account information over the phone, but I refused without a written agreement. They say a written agreement is impossible, since technically the entire balance is due, but agreed to accept payments by check.

I am happy to start paying this--I do owe it--but I cannot pay the entire amount and I am reluctant to start sending checks without something in writing laying out the terms. I am thinking that I could send a check for a small amount--say 5% of the debt--along with a letter asking that they stop contacting me by phone, but proposing a specific payment plan and asking for detailed accounting of interest, fees, and penalties, and acceptance of my proposal.

Does this make sense? Should I send the letter before sending any money?

Thanks for any advice you folks might have!

S.

[AISLE4]

DV anyway. Always DV.

Don't give them bank info. Tell them you don't have a bank account--unless you want to set up an account only for payments to this CA. Giving a CA your bank info is inviting the devil into your parlor. If you want to pay, pay via an alternative method.

Whenever I accidently end up on the phone with a CA and they start asking about a bank account, I just tell them I don't have a bank account. It ends the conversation. They are all obsessed with getting banking info.

Have you talked settlement or payment plan with the CA? Has the account charged off with Amex?

[hiblues]

When you do something like this...

always open a new checking account with a different bank and keep just the

amount you write in checks deposited in it.

Also, try to get a PFD ( after PIF) in writing...

and make sure every check you write has an RE on the back ( stating PFD after PIF)

Even if your State (technically) doesn't allow RE's or not.. it always better

to have one on there. Why? Because 99% of RE checks deal with

a disputed amount,( eg this 50% payment constitues PIF)

but your RE is about performing a simple action

after PIF.

I did a RE check in a State that technically didn't allow them and still got the delete

(after I ITS'd the CA.. I guess the thinking on their part is, why fight a PIF account?)

[divemedic]

Just because you owe someone money does not mean the debt is valid. "Validation" is a legal term and has nothing to do with whether or not you owe someone money. It has to do with whether or not the CA can prove that YOU owe THEM money, and how much.

and asking for detailed accounting of interest, fees, and penalties

That is exactly what DV is. If they cannot give you that, the debt is not validated.

Paying this debt is not going to help your credit report one bit, unless you can get a PFD, which is just a bit less rare than a unicorn.

[scottythenut]

Thanks for the great advice. You guys have been very helpful. Maybe a bit more detail would help with follow-up questions...

The debt is about 16K and the last payment I made was sometime last October. I do not believe it has been charged off, and I have no idea whether AMEX sold it to CollectCorp or if they just hired them to dog it. One thing their agents have told me is that AMEX often sues, especially for sizable debts, and they would make a recommendation on whether to do so based on my response to their collection efforts.

I got the first letter from CollectCorp on June 4th, and they have called pretty regularly since then. The first agent was pretty ugly about it, but since then they have calmed down a bit.

So, a few more questions:

1. Isn't it too late to demand validation of the debt since the first notice came over 60 days ago? Is there a way to find out whether AMEX sold the debt--or is this something I would learn from the validation materials?

2. Given that the debt is fairly large but not old, I am employed making good money, and collection efforts have not progressed very far, I feel like I would be a good target for legal action and garnishment. I would like to avoid the extra expense and hassle of this, so I wonder how much negotiating strength I have for settlement discussions. Besides, I could probably not get together more than about 5K anytime very soon. Should I still bring the subject of settling up in my letter to them?

3. I like the idea of opening a bank account just for this purpose. But I could not find the acronym "RE" on the info page. I gather from your language that in some states this might make payment of the check somehow contingent on action by the CA. Is this correct, and what does "RE" stand for?

4. From what you guys have said already, it strikes me that I should send them a letter, before making any payments, demanding validation and asking them to stop calling me at home and on my cell. I should also propose terms of settlement (such as size and timing of partial payments) including deletion of the account from my credit report upon full payment, interest rates during repayment, and any fees and penalties that have already accrued. In the meantime I could try to put some money aside so that I could make a settlement offer once I have validation. Does this make any sense?

I realize that this is a bit long-winded, but I thought more info might help. You guys are great for responding, and I think you deserve a lot of credit for sharing your expertise and experience with people in trouble. In the end, I did spend this money, and only stopped paying simply because I couldn't pay everything, and AMEX drew the short straw--I am not delinquent on anything else. So I want to pay a just amount to square this--I just don't want to get screwed or hassled. Thanks to you guys, perhaps I can avoid that.

With Gratitude,

S