OC Trying to Collect in Full

[Axelmn]

Hello,

I recently received a letter from a debt collector to collect on behalf of an OC for $8K. My credit report shows the $8K was charged off after I applied for bankruptcy. Even though the bankruptcy was dismissed they've now tried to collect on the debt since my reestablishment of credit with other CCs. I DV'ed the collection agency and the OC came back in their place and requested I pay in full. The only thing the OC provided was my application for their credit card and they validated the debt based on this. Now the OC sent me another letter saying they'd be happy to settle for less than 50% of the amount. I am considering DV'ing them again to provide full payment history and proof the SOL has not expired.

My questions are: Should I go forward with DV again? How do I find out if the SOL (6 years in MN) is passed since my account has been charged off? Would it be wise to settle for less than 50% now?

Any advice is greatly appreciated.

[thecollectionagent]

you can not dv a oc

[willingtocope]

Need some more answers...and a timeline.

You said the BK was dismissed...did you NOT file BK, or was it discharged?

When was the BK?

[Axelmn]

Need some more answers...and a timeline.

You said the BK was dismissed...did you NOT file BK, or was it discharged?

When was the BK?

I did file Ch 7 BK in 2003 and it was dismissed in 2003.

[Axelmn]

you can not dv a oc

Ok based on the info what would be your advice on how to deal with the OC now?

[willingtocope]

There is a difference between "discharged"...meaning the court agreed, and you indeed filed BK 7...and "dismissed"...meaning the court did NOT agree, or you decided not to file. Which was it?

If it was discharged, then any and all debts you had prior to that were included in bankruptcy and are therefore uncollectable.

[Axelmn]

I did file Ch 7 BK in 2003 and it was dismissed in 2003.

Let me clarify. I filed for Ch 7 BK but it was not granted.

[Axelmn]

There is a difference between "discharged"...meaning the court agreed, and you indeed filed BK 7...and "dismissed"...meaning the court did NOT agree, or you decided not to file. Which was it?

If it was discharged, then any and all debts you had prior to that were included in bankruptcy and are therefore uncollectable.

Its "dismissed" on my credit report but I was never granted BK as the court did not agree.

[Robert Nashville/Savannah]

you can not dv a oc

Nor entirely true…

It is true that the FDCPA (and therefore, the right to dispute/request validation) does not extend to Original Creditors (although is some states, state law has extended those requirements onto OCs) but a debtor always has a basic right to know what comprises an amount being requested and always has the right to request it.

OP...

If I understand it, you filed for bankruptcy protection but the case was dismissed (meaning your debts were not discharged)…is that correct? If so then yes, I would continue with the DV process.

Understand that even if your DV was timely, the creditor/OC has probably provided all that the law requires of them so they can continue to try to collect. However, you are not obligated, and I wouldn’t, pay anybody anything until they are willing to answer your questions about the debt.

You do need to understand, however, that they may decide to pursue this in court.

With regards to the SOL, if you don’t already have the records to help establish when it did/will expire on this debt then you have a problem because to the best of my knowledge, the burden of showing the SOL has past will be on you should it ever go to court. However, through the discovery process, should it get that far, you should be able to demand the data you need to know for certain.

[Axelmn]

Nor entirely true…

It is true that the FDCPA (and therefore, the right to dispute/request validation) does not extend to Original Creditors (although is some states, state law has extended those requirements onto OCs) but a debtor always has a basic right to know what comprises an amount being requested and always has the right to request it.

OP...

If I understand it, you filed for bankruptcy protection but the case was dismissed (meaning your debts were not discharged)…is that correct? If so then yes, I would continue with the DV process.

Understand that even if your DV was timely, the creditor/OC has probably provided all that the law requires of them so they can continue to try to collect. However, you are not obligated, and I wouldn’t, pay anybody anything until they are willing to answer your questions about the debt.

You do need to understand, however, that they may decide to pursue this in court.

With regards to the SOL, if you don’t already have the records to help establish when it did/will expire on this debt then you have a problem because to the best of my knowledge, the burden of showing the SOL has past will be on you should it ever go to court. However, through the discovery process, should it get that far, you should be able to demand the data you need to know for certain.

Yes the BK case was dismissed. Doesn't the OC have an obligation to prove the SOL hasn't expired? Equally, they've offered to settle for less than 50% of the debt. Does this perhaps say they don't have the records to validate? Would it be wise to go ahead an settle without a DV on their part?

[Axelmn]

Yes the BK case was dismissed. Doesn't the OC have an obligation to prove the SOL hasn't expired? Equally, they've offered to settle for less than 50% of the debt. Does this perhaps say they don't have the records to validate? Would it be wise to go ahead an settle without a DV on their part?

Oh and they've given me 15 days to settle the less than 50% debt as well.

[Robert Nashville/Savannah]

Yes the BK case was dismissed. Doesn't the OC have an obligation to prove the SOL hasn't expired? Equally, they've offered to settle for less than 50% of the debt. Does this perhaps say they don't have the records to validate? Would it be wise to go ahead an settle without a DV on their part?

First, understand, the OC does not have to validate per FDCPA unless your state extends the FDCPA onto Original Creditors. You always have the right to ask but they can ignore you.

Second; while they probably don’t want to have to go through the trouble to retrieve them (as I’m sure the records are archived at this point) that does not mean they don’t have the records…trust me, they’ve got the records.

Third; a debt being past the SOL is an affirmative defense in court…if you are alleging the debt is past the SOL then the burden of showing that will be on you (since you are the one claiming it) - that’s one of the many reasons why keeping your own accurate financial records is so important.

If you do get sued, then you’ll have the opportunity to request the documents you need to show if the SOL has past and they’ll be duty bound to provide them but they’ve no such obligation beforehand.

EDIT:

The "15 days" is meaningless - that's just their attempt to presure you.

[Axelmn]

First, understand, the OC does not have to validate per FDCPA unless your state extends the FDCPA onto Original Creditors. You always have the right to ask but they can ignore you.

Second; while they probably don’t want to have to go through the trouble to retrieve them (as I’m sure the records are archived at this point) that does not mean they don’t have the records…trust me, they’ve got the records.

Third; a debt being past the SOL is an affirmative defense in court…if you are alleging the debt is past the SOL then the burden of showing that will be on you (since you are the one claiming it) - that’s one of the many reasons why keeping your own accurate financial records is so important.

If you do get sued, then you’ll have the opportunity to request the documents you need to show if the SOL has past and they’ll be duty bound to provide them but they’ve no such obligation beforehand.

EDIT:

The "15 days" is meaningless - that's just their attempt to presure you.

Robert,

Thanks for all your advice. Based on the information what would your advice be to proceed? Continue with the DV to the OC or settle with their offer?

[Robert Nashville/Savannah]

I can't really answer that for you -

If the debt is your debt and you know the amount being requested is at least reasonable and you have the money then reaching a settlement is likely a better course of action than going to court.

How much to settle for is another matter...if it's past or close to SOL and/or if there are other issues you may be able to negotiate a much better settlement than 50% of the debt.

Keep in mind that the primary purpose of the DV process is to tell you what you don't already know and to ensure that the CA, ect., handling the collection actualy has the legal authority to colelct the debt, etc. If those questions are answered to your satisfactiong then it's probably time to make the best deal you can unless you think you could win in court.

[Axelmn]

I can't really answer that for you -

If the debt is your debt and you know the amount being requested is at least reasonable and you have the money then reaching a settlement is likely a better course of action than going to court.

How much to settle for is another matter...if it's past or close to SOL and/or if there are other issues you may be able to negotiate a much better settlement than 50% of the debt.

Keep in mind that the primary purpose of the DV process is to tell you what you don't already know and to ensure that the CA, ect., handling the collection actualy has the legal authority to colelct the debt, etc. If those questions are answered to your satisfactiong then it's probably time to make the best deal you can unless you think you could win in court.

Thanks. The CA is not collecting. The CA initially sent me a letter and after I sent them a DV the OC responded in their place, with a letter and my original CC application, requesting payment in full. The original amount is correct but includes large interest and fees due to non-payment at the time.

[Robert Nashville/Savannah]

ALthough the OC sent the data, that does not mean the CA is out of the picture; the CA would take your request, pass it on to the OC and the OC responded (the OC is the entity that has the data...the CA is just a middleman; assuming they are truly a separate entity in teh first place; the CA might just be a department withint the OC).

At any rate, if the OC is willing to work with you directly so much the better.

As to the amount, if your contract allows it then they have the legal right to collect the "full amount" and would sue you for that much plus more were it to get that far...however, such "fees and interest"; even if allowd by the agreement you signed, are very negotiable when trying to reach a settlement.

[Axelmn]

ALthough the OC sent the data, that does not mean the CA is out of the picture; the CA would take your request, pass it on to the OC and the OC responded (the OC is the entity that has the data...the CA is just a middleman; assuming they are truly a separate entity in teh first place; the CA might just be a department withint the OC).

At any rate, if the OC is willing to work with you directly so much the better.

As to the amount, if your contract allows it then they have the legal right to collect the "full amount" and would sue you for that much plus more were it to get that far...however, such "fees and interest"; even if allowd by the agreement you signed, are very negotiable when trying to reach a settlement.

Thanks much. I will work directly with the OC now but one last question: What constitutes where the SOL date begins? Is this the date I last paid the OC or date they charged off or ?

[Robert Nashville/Savannah]

Understand that SOL rules can vary greatly from state to state.

That said, in most cases, the SOL "clock" begins to run the day after your last payment on the debt.

[andbowd]

Thanks. AB

[Axelmn]

I settled at 30% of the balance so I think I did ok. Thanks again for all your inputs and advice.