HELP - new CA took over VA state tax collections from another CA

[brit5467]

In 2007 my boyfriend got letter from VA Dept. of Taxation about several years of back taxes which were ultimately were turned over Sept 2007 to United Consumers Inc. (approx. $7650) with whom we worked out a very reasonable payment plan of $100/mo.

That went along nicely, no problem for 1 1/2 yrs. – that is, until end of Jan. 2009 when I noticed Jan. VISA payment (comes out of my checking) had not been deducted (sent in on the 15th).

Called to confirm payment received. Beth (rep) said it had, but account had been turned BACK over State (Commomwealth, actually) and payment had been forwarded to them (which is not true because it still has not been deducted).

When I questioned the change, she explained since we’d been paying on time for nearly 1 ½ years, therefore account no longer needed to be in collections. That State would be handling it instead.

However, she really didn’t seem to want to offer this explanation. It was like pulling teeth to get her to explain. I got gut feeling at the time that something was fishy.

She then gave me State number and said call and explain we’d been instructed to contact them regarding account and were told to set up NEW payment plan with them. Sounded reasonable to me.

However, before we got to talk with State (couldn’t get thru) -- on Friday 1/30 boyfriend gets nasty call from Diversified Collection Svcs (DCS). Thinking he’s supposed to deal with State, he was upset. Especially since DCS rep got nasty and asked lots of personal questions and lots of scare tactics were used.

He explained to rep that I handle finances and she needed to discuss it with me. Having had a positive experience with previous CA, I assumed he’d just gotten attitude with DCS and I could calmly straighten it all out (as I had with prior CA).

HA !! I called, yet even after I’d explained about how previous CA had told me State was handling it and told how we’d previously paid on time for 1 ½ years, she still got nasty with me, saying that didn’t matter. She kept pressuring me for personal info and financial commitment.

Said I wanted something in writing on company’s letterhead, stating they’d taken over account, showing account balance, etc.

She said letter HAD been mailed, to “---“ (had correct address) but she could not guarantee we would have received it yet. That was Friday 1/30 and as of Monday 2/2, still no letter.

She then tried to cut deal. In lieu of him having to provide her with info for “financial review” so they can calculate a reasonable payment plan, she said if we paid 50% NOW (on a charge card) which would be approx. $3000 then she would accept $50/mo for the duration of the debt (5 years at that rate) and we could then use the other $50 we’d been paying previously ($50 + $50 = $100/mo. prior payment) to pay down credit card.

I didn’t agree, so ultimatum was, “She’d give us to Tuesday 2/3, no later than 2:30 pm her time to accept that arrangement.” By doing so, no more financial questions would be asked.

Otherwise, she’d have to do financial and get all his info, he’d still have to put a percentage down but the monthly payment would probably be higher and his wages might be garnished, etc., blah, blah, blah.

However, she called tonight. My cell first. I answered but when I realized who it was, I just kept saying, “Hello?” “Hello?” several times, then hung up. Few minutes later, she tried again but I didn't anser. She then called his cell and he didn’t answer.

My question is – how do we proceed?

1 - Do we have to do anything until we get a letter from them? Is THAT when our 30 days start, or when we got phone call?

2 – With this financial info they want -- checking account info, employment info, etc. How much of this can they get on their own? I think I read on this site that start out somewhat ‘blank’….so I’m confused about this.

3 – The deal is pretty good, but CAN WE lock her into it, IN WRITING? Or is it just a ploy? Boyfriend says we’ll give her $3000 and then they will want more than just $50/mo. Or else debt will be turned over to yet another CA who will ream us again later on down the road.

4 – He’s on unemployment. Can they take that? They’re already garnishing it $60/wk for back child support. (I know he sounds like a loser, but there are extenuating circumstances with the child support thing.)

5 – He is also working P.T. and receiving a paycheck (which gets deducted from unemployment). Will they garnish that, too, along with unemployment?

I guess my main question is, aside from the #1 above is, how should we proceed?

I’d appreciate any and ALL feedback on this. Today IS Tuesday, her "deadline" and I don’t know if I should call her or what? We aren't trying to get out of paying.....just can't pay as much as she wants.

Thanks,

Bonnie

[OMGWhatHaveIdone]

Until you receive the dunning letter from them, don't answer the phone and do NOT make any agreements with them or provide any bank account information to them. Once you get the dunning letter, send out a DV letter right away. There's stickies on how to proceed on that. Don't offer them one single dime until they can prove they own the debt.

[brit5467]

Thank you so very much !!

Can they start any garnishments prior to him receiving letter?

Do you have any feedback on the "pay it down 50% now/ $50 per month" offer she made? I know I can ask for that in writing, but are they likely to GIVE IT to me in writing? I do realize if/when the debt goes to yet another CA, it would no longer be binding.

I KNOW he owes debt. so once we get letter, he WILL have to make some sort of arrangements.

And that deal seems better to me than them getting all his financial info to calculate a smaller, more reasonable lump sum "pay now" amount but then expecting a larger montly payment (which was what she said other alternative would be if she didn't hear from us today).

Do they ever do deals like that, or was that likely a scam to get me to commit to something?

Thanks AGAIN !!

[swirlgirl]

They cannot do a garnishment until after they file a lawsuit AND win the case in court. So you don't have to worry about that for now.

Don't let them push you around. If you want a settlement, write up your own settlement offer with payment terms you can live with and send it to them. All they can say is no. But you need to stay in control of the process.

[debtorshusband]

Everything they have said to you is a lie. Keep that in mind when trying to decide if any agreement you make with them "needs to be in writing." (Hint: YES!)

Unless they told you in your phone call exacty how much is owed, who is claiming it, and informed you of your rights to dispute as per the FDCPA, they are are required BY LAW to send you a letter with all this information within 5 days of that phone call.

When you receive that latter, you have 30 days to send them a DV letter. DO IT! At this point, you are not longer even sure who owns the debt.

You are not required to provide them with any financial information: income, bank account information, employer, etc. Despite their desire to "help" you, you are capable of deciding for yourself how much you can afford to pay.

Normally they can't garnish anything unless they file a lawsuit and are awarded a judgment. However, if this is a tax debt things might be different.

NEVER charge up a credit card in order to pay off another debt. That woman has only one goal with this suggestion - to put more money into HER pocket now.

Her "deadlines" mean nothing. She's trying to artificially put pressure on you. Don't call her, don't talk to her. They owe you that letter - wait for it. If they don't send it -do you really want to have any dealings with someone who can't/won't follow the most basic debt collection laws?

Good luck.

DH

[OMGWhatHaveIdone]

In the end, what needs to be emphasized on the most is that you are dealing with a JDB. They are bottom-feeding pond scum. Make them prove to you that you owe them the amount they are claiming. Just because they bought it for pennies on the dollar doesn't mean YOU owe THEM one dime. What you owe, is money to the OC. Not the JDB. Keep in mind too, that when you made good on your payment arrangement with United Consumers Inc, it reset the SOL on your debt.

Now that the debt has been passed on to JDB #2, I would strongly suggest that you go through your records to find every single payment that you made to the first JDB. If anything, that amount should be deducted from the original amount owed.

[brit5467]

All great advice so far. Thanks !!

But just to reiterate, this is debt is from various years of unpaid State taxes. I was under the impression that State has contracts with these CA's simply to do their collecting and the debts haven't been 'bought' from the State. Am I mistaken?

That's one of the main questions I needed to get answers for. But I guess I didn't exactly ask it right, so here's my question:

Aren't income tax debts handled differently? Someone here mentioned that garnishment could not happen until boyfriend was sued and taken to court, etc. I don't think the State has to do that, do they?

This is a completely different animal than a credit card or car loan debt, isn't it?

When we do a DV, the CA will probably just send us the amounts due for the tax years remaining (we've paid half off already), but should we, as well, make them (or the State, maybe?) PROVE those amounts, like from the State's records?

That's something we probably should have done way back in the beginning (duhhhh) instead of taking the State's word for it, right?

I'm hear to learn, so all feedback is appreciated !!!

[brit5467]

Also, someone mentioned not using credit card. The only reason I'd considered that option was that the interest on card was much less than the interest and penalties he's racking up with the State (plus probabaly some CA's fees as well).

[saint al]

Keep evedrything they send you if there is communication let it be in writing cmrr. Alway have a paper trail you never know you may get them on FDCPA violations and be able to sue them or use it as leverage to neigociate. (my bad on the spelling)

[OMGWhatHaveIdone]

That's something I'm honestly not too sure about. I know they can intercept your bf's tax refund. But that's about all I know. Hopefully someone else can give you a much better answer than I can.

[wahoo238]

In the end, what needs to be emphasized on the most is that you are dealing with a JDB. They are bottom-feeding pond scum. Make them prove to you that you owe them the amount they are claiming. Just because they bought it for pennies on the dollar doesn't mean YOU owe THEM one dime. What you owe, is money to the OC. Not the JDB. Keep in mind too, that when you made good on your payment arrangement with United Consumers Inc, it reset the SOL on your debt.

Now that the debt has been passed on to JDB #2, I would strongly suggest that you go through your records to find every single payment that you made to the first JDB. If anything, that amount should be deducted from the original amount owed.

I can say with a fair amount of certanty that the Commonwealth of Virginia did not sell a tax liability to a JDB for pennies on the dollar.

[OMGWhatHaveIdone]

Well since it was with JDB #2, I was just going with that theory. Thanks for setting me straight

[wahoo238]

Don't confuse JDB and CA, many semilarities but many differences.

[OMGWhatHaveIdone]

Chances are though, if it was already placed with one "CA" without success, then the next "CA" could very well be a JDB. I'm pretty sure I've seen references to that somewhere on here before.

[wahoo238]

Chances are though, if it was already placed with one "CA" without success, then the next "CA" could very well be a JDB. I'm pretty sure I've seen references to that somewhere on here before.

OP said that original CA returned to the Commonwealth because repayment agreement was paid OT for X period, no way no how a JDB is involved with a tax liability. A CA is just that a 3'rd party collector a JDB purchases bad debt, the commonwealth does not sell bad debt nor does making payments reset SOL on tax debt, calender year sets SOL for tax debt.

[debtorshusband]

Also, someone mentioned not using credit card. The only reason I'd considered that option was that the interest on card was much less than the interest and penalties he's racking up with the State (plus probabaly some CA's fees as well).

When I said this, I guess I was making the assumption that the credit card interest was higher. If not, I guess it could change the calculations, but take this into consideration: Can you be sure the credit card interest will stay lower? If you are ever late with a payment to them, they may jack up the interest rate. Under a "universal default" clause, they could jack up your rates if you default/pay late on another account - and that may include this account you're currently dealing with; I'm sure it's showing up as a negative on your credit report.

DH

[brit5467]

Can you be sure the credit card interest will stay lower? If you are ever late with a payment to them, they may jack up the interest rate.

A very, very, VERY good point !!! Esp. with the way things are changing in the credit world. I had forgotten, but a friend who always pays her CC on time had her interest raised FOR NO REASON, without even a notification letter. She's carrying a balance so it really affected her.

I, personally, have excellent credit and lots of it, pay my cards off each month, never late, high FICO, etc. (not bragging -- just proud, since I achieved this after having filed bankruptcy in the 90's). Due to that (good credit standing) none of your concerns (stated above) even occurred to me.

So thank you, thank you, thank you for pointing that out.

Just for the record, this is BF's tax debt and I'm just helping out. I can see that I made it sound like I was thinking of using my CC (and at one time, I'd considered doing so) but this relationship is about over now, so I'd never dare. I just want to help avoid garnishments so he can afford to move out.

[brit5467]

Thanks to everyone !!

Just to update, I finally got thru to State (Commonwealth) and it seems that UC’s contract expired (1st CA) and now DCS has been assigned account. So they are legit. I also got correct amount due so I can compare it DCS's.

The State also gave me contact name and direct number to DCS's Debt Resolution Coordinator so I can discuss payment plan. However, mail just came, still no letter and it's 4 business days since first phone call on Friday.

As I've been saying, this is not an issue of IF we owe the money or even HOW MUCH we owe. We want to pay. No desire to prolong the inevitable. It was an issue of being 'attacked' by a new CA and how to go about paying them, i.e., if they'd let us pay installments, would they garnish, etc.

State said it would probably be beneficial to go ahead and contact DCS (without letter) to show 'good faith' that we are willing to cooperate. Esp. since DCS has no records of our prior positive payment history.

I know ya'll say do nothing until letter, but just concerned it got lost or held up and when/if it DOES come, postmark will be old. We often have problems with mail.

I know many of you have had nothing but trouble with CA's, hence all the informative guidance. But by talking and cooperating with original CA, we got no grief from them. Got a statement once a month, sent in payment and that was that.

I'd like to develop same positive relationship with new CA and fear I won’t be able to if I just wait for letter that never comes when they think it did which gives the impression of non-cooperation. And all the while, we’re avoiding THEIR calls.

Considering these specific circumstances, does anyone see problem with me calling tomorrow, without receiving letter, since it will be the 5th day?

Also, if DCS is hesitant to set up payment plan, does anyone see a problem with offering to send copy of 1st CA’s payment history as proof that we can be trusted to make payments regularly and OT? (Personal info blanked out, of course.)

I mean, they don't HAVE to accept payments, do they? They CAN demand payment in full, can't they? Thought that proof of payment history might make them more receptive to payment plan.

Thanks to everyone for pulling the reins back on me and helping me take back control. Had it not been for this site, I'd have made many mistakes.

[debtorshusband]

Well, you have correctly observed that the advice you get here is shaded by our own personal experiences.

I don't see anything wrong with your intended approach. I think after all the cautions you've received here you are aware of some of the traps and pitfalls, and thus should be able to avoid them.

I think the point you want to stress is that you had reached a payment agreement with the previous collection agency, and you expect them to honor that agreement. If they refuse, I would go back to the State and tell them the same thing. And when you eventually get them to agree, get it in writing. You now have first hand experience at what can happen if you don't get the agreement in writing.

Concerning sending them a redacted copy of your payment history, while I don't see anything wrong with it, make sure you convey the right "attitude". Rather than approaching them as supplicants begging for them to make an agreement, your attitude should be one of being outraged that they would renege on the agreement, and insist they recognize it. You're not showing them the payment record as proof of your good character and that you can be trusted to continue making payments, but as evidence that an agreement had been reached which you had honored, and now you expect them to continue to honor it on their part.

And again, if they balk, threaten to complain to the state, and if they still hesitate, follow through with that threat.

Good luck.

DH

[brit5467]

I think the point you want to stress is that you had reached a payment agreement with the previous collection agency, and you expect them to honor that agreement. If they refuse, I would go back to the State and tell them the same thing. And when you eventually get them to agree, get it in writing. You now have first hand experience at what can happen if you don't get the agreement in writing.DH

Excellent advice. And you ARE right about first-hand experience!!

Concerning sending them a redacted copy of your payment history, while I don't see anything wrong with it, make sure you convey the right "attitude". Rather than approaching them as supplicants begging for them to make an agreement, your attitude should be one of being outraged that they would renege on the agreement, and insist they recognize it. You're not showing them the payment record as proof of your good character and that you can be trusted to continue making payments, but as evidence that an agreement had been reached which you had honored, and now you expect them to continue to honor it on their part.DH

Once again, excellent advice (plus I learned a new word -- "redacated" -- thanks ). Not necessarily the approach I'd have thought to take since the 'houndog' rep kept insisting that THEY were not UC and didn't have to honor the prior agreement, therefore I would have probably taken the 'submissive' route. But you make a good point. An agreement had been made, the State seemed satisfied with it, and I expect the same arrangements with them.

And again, if they balk, threaten to complain to the state, and if they still hesitate, follow through with that threat.DH

I shall. In fact, the State guy had even said (after I'd complained about the 'nasty hounddog' girl and he gave me the # of the 'special person' ) that if I had any problems to call the State back. That he'd noted in the account that we'd spoken and the topic of our conversation.

Thanks again !!