Negotiating with a collection agency

[Vivian]

Hi,

I am a newbie.

I am in collections. I live in California. In September of '05 I made my last payment to First USA for a $42,000 debt. There is a sob story behind this debt that I choose not to go into. I initially received calls from First and lawyers. I did not respond and hoped to be ignored. I was ignored until this summer when I received a letter from Proline Solutions Group,LLC. In the letter it stated that the OC is First USA, the CC is Palisades Collections and the full amount of the debt should be sent to Proline Solutions.

I have anticipated legal fees, relocation fees and possible time without a job. I expect to be in a legal battle against my son's father. My son (4 yrs) told me, in so many words, that his father molested him. To financially help me, my brother has bought me out of my portion of a vacation home that my father gave to the children of our family. He is giving me the money in installments over two years. I have invested the first installment of this money in a short term CD. This investment will be reported on my 2008 income tax filing. How do I deal with the collection company without losing all of this money that I will need?

Can either Proline or Palisades view my bank accounts without me knowing? Is it likley that they are doing so now or will? Can they take money without a court order (judgement)?

Can they know about my CD if it is not through my bank? Is it likely they do know about the CD?

Is it likely that a judgement will be filed by Proline or Palisades? I want to negotiate before a judgement, if this will even happen.

I had originally thought of continuing to ignore the letter from Proline because I am not concerned about my credit rating and I had no assests, but now I want to protect the money I do have so I can protect my son.

How do I negotiate and with whom do I negotiate? Should I do it all by mail so I have records or is it okay to contact them by phone? Should I offer a very small amount, gradually adding more until I reach my limt and send that amount saying I will send no more?

I am thankful for any help. I will do more research, though I have little computer experience. I am very thankful for this site.

Vivian

[Flyingifr]

Hi,

I am a newbie.

I am in collections. I live in California. In September of '05 I made my last payment to First USA for a $42,000 debt. There is a sob story behind this debt that I choose not to go into. I initially received calls from First and lawyers. I did not respond and hoped to be ignored. I was ignored until this summer when I received a letter from Proline Solutions Group,LLC. In the letter it stated that the OC is First USA, the CC is Palisades Collections and the full amount of the debt should be sent to Proline Solutions.

I have anticipated legal fees, relocation fees and possible time without a job. I expect to be in a legal battle against my son's father. My son (4 yrs) told me, in so many words, that his father molested him. To financially help me, my brother has bought me out of my portion of a vacation home that my father gave to the children of our family. He is giving me the money in installments over two years. I have invested the first installment of this money in a short term CD. This investment will be reported on my 2008 income tax filing. How do I deal with the collection company without losing all of this money that I will need?

How to deal with them? You owe a lot of money so you should expect them to be very aggressive about collecting. That is the bad news but it is also the good news because owing that much makes you prime bankruptcy bait. As far as the sale of the fractional interest is concerned, you will probably be using those funds to live on, get re-established, moved, etc... - things that are a LOT more important than a Credit card debt.

Depending on your tax situation, you could report the sale as an Installment Sale using Form 6252 or simply bite the bullet and pay the tax all in one year using Schedule D. The important thing to remember is that the CA will NOT have access to your tax return unless you give it to them. Therefore they will know nothing about your income sources or amounts, especially since you stated you are relocating, which usually means a new job and a new locale. They can't take what they can't find and if they can't find you it will be very difficult to even sue you.

That brings us to the Statute of Limitations. In California it is 4 years. You are three years into it already. Keep your head low for another year and the SOL comes into play.

Can either Proline or Palisades view my bank accounts without me knowing? Is it likley that they are doing so now or will? Can they take money without a court order (judgement)?

No, no and no.

Can they know about my CD if it is not through my bank? Is it likely they do know about the CD?

No and no.

Is it likely that a judgement will be filed by Proline or Palisades? I want to negotiate before a judgement, if this will even happen.

Read what I stated in the first reply. lay low for one year and the SOL comes into play.

I had originally thought of continuing to ignore the letter from Proline because I am not concerned about my credit rating and I had no assets, but now I want to protect the money I do have so I can protect my son.

How do I negotiate and with whom do I negotiate? Should I do it all by mail so I have records or is it okay to contact them by phone? Should I offer a very small amount, gradually adding more until I reach my limt and send that amount saying I will send no more?

I am thankful for any help. I will do more research, though I have little computer experience. I am very thankful for this site.

Vivian

Obviously you are in a much stronger position negotiating after the SOL has run, because you can tell them to FOAD and there isn't a lot they can do about it. Also by then the worst damage to your credit will have pretty much run its course. FICO is real hard on delinquencies less than 2 years old. Once yours is 4 years old it doesn't carry as much weight.