Zombie Debt?

[deepak115]

I had defaulted on a Bank of America/MBNA Credit card way back in early 2004 and the account was charged off in Feb 2006.

The account was opened in TX and I am currently in TX as well. The SOL for Texas is 4 years.

Early this year Denovus Corp (a Collection Agency) out of PA reported a Debt Purchase account Type and Status as Closed with Key Derogatory in Jan 2012.

I send them a Debt validation letter, which came back after 60 days as verified and they offer to settle for 50 cents to a dollar.

Is this a zombie debt they are trying to collect?

How can I have them remove the negative closed collection entry?

Please advice! Thanks.

[BV80]

I had defaulted on a Bank of America/MBNA Credit card way back in early 2004 and the account was charged off in Feb 2006.

The account was opened in TX and I am currently in TX as well. The SOL for Texas is 4 years.

Early this year Denovus Corp (a Collection Agency) out of PA reported a Debt Purchase account Type and Status as Closed with Key Derogatory in Jan 2012.

I send them a Debt validation letter, which came back after 60 days as verified and they offer to settle for 50 cents to a dollar.

Is this a zombie debt they are trying to collect?

How can I have them remove the negative closed collection entry?

Please advice! Thanks.

If your facts are correct, you're darn right it's a zombie debt. Is the OC still reporting? If so, what is the "date of first delinquency" or "date of first major delinquency reported" stated in the OC's entry?

When was the last time you made a payment on the account?

[deepak115]

Yes Bank of America is still reporting it.

Account Opened: 03/01/2003

....

....

....

July 2005 - OK

August 2005 - OK

Sept 2005 - 30 days

Oct 2005 - 60 days

Nov 2005 - 90 days

Dec 2005 - 120 days

Jan 2006 - 120 days

Feb 2006 - KD

So I would think the last successful reported payment was August 2005.

I do not remember exactly when I truly made the last payment.

I don't know how it would help, but I am all ears.

Should I use a C&D Letter with a threat to sue, if they don't remove their -ve listing?

[BV80]

Judging from the dates you posted, your last payment was in August, 2005.

You're looking at 2 SOLs. One is the SOL for collection. In Texas, that's 4 years. The SOL for collection means they can only legally sue you within that specific period of time. After that time has passed, they can't legally sue. They CAN still try to collect throught letters and phone calls, however.

The way to stop that is to send a cease and desist letter. Tell them to never contact you again in reference to ______(account number).

The second SOL is the SOL for reporting to a credit reporting agency. That SOL is 7 to 7.5 years. The SOL for collection in your state has nothing to do with the SOL for reporting. They're 2 different laws. Since your last payment appears to be August, 2005, the OC and JDB are still within the SOL for reporting. It should fall off your CR in 6 months to a year.

You can dispute the account with the credit reporting agencies (CRAs). However, if the OC and JDB verify the account, as long as they're reporting accurately, there's not much you can do.

[deepak115]

Thanks for the clarification and help. I would like to settle but want their negative listing gone.

I'll probably have to negotiate that as part of payment!!

Thanks. Will try that.

Here is the DV letter I had send on Jan 29th, to which they replied March 19th that we have identified you are the correct consumer for this account, followed by information on original creditor and an offer to settle at 50 cents to a dollar.

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To Whom It May Concern:

I pulled a copy of my credit report and noticed that there was a collection from your agency on my credit report. I have never heard of this account from your agency and was never notified of this collection. This is not a refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 ( that your claim is disputed and DEBT VALIDATION is requested. I respectfully request that your offices provide me with competent evidence that I have any legal obligation to pay you.

Please provide me with the following:

 Agreement with your client, if any, that grants you the authority to collect on this alleged debt.

 Agreement that bears the signature of the alleged debtor wherein he agreed to pay the creditor.

 The complete payment history on this account so as to provide me proof of

o What the money you say I owe is for;

o Explain and show me how you calculated what you say I owe.

 Provide me with copies of any other documents that show I agreed to pay what you say I owe.

 Prove that the Statute of Limitations (SOL) has not expired on this account.

 Show me that you are licensed to collect in my state of Texas, with your license numbers and Registered Agent.

Edited March 31, 2012 by deepak115

[BV80]

The JDB is not required to send the vast majority of what you requested in that letter. According to the FDCPA, all that's required to validate a debt is the name of the OC and the amount of the debt.

They don't have to prove anything else in response to a DV request. However, since you disputed the debt, they should report that fact on your credit report.

[deepak115]

They did notify the CRAs as account disputed.

I don't mind paying since the Total Due is $1,325.80 for which they want to settle at 50%. I want to negotiate and am thinking of making 2 offers

1. pay 25 cents to a dollar.

2. pay 50 cents to a dollar, if CA will remove the negative listing.

Any thoughts?

BV80, I appreciate your insight earlier. Thank you.

[BV80]

They did notify the CRAs as account disputed.

I don't mind paying since the Total Due is $1,325.80 for which they want to settle at 50%. I want to negotiate and am thinking of making 2 offers

1. pay 25 cents to a dollar.

2. pay 50 cents to a dollar, if CA will remove the negative listing.

Any thoughts?

BV80, I appreciate your insight earlier. Thank you.

Personally, I would never settle with a JDB, especially in your case.

1. They can't legally sue you.

2. They're not required to delete their entry even if you pay in full.

3. The OC's entry will remain no matter what. What's the purpose of deleting the JDB's entry if the OC's negative entry is still there?

4. Both entries will fall in a year, possibly sooner. I'd ride it out. I'm sure any money you're willing to offer could be better spent elsewhere.

By the way, what date is the JDB reporting as the date of last payment?

[deepak115]

what date is the JDB reporting as the date of last payment?

"No data" prior to Jan 2012

January 2012 - KD

I have a lot of skin in the game esp. w.r.t the JDB collection reporting as it may stay on file for 7 years starting January 2012.

[BV80]

what date is the JDB reporting as the date of last payment?

"No data" prior to Jan 2012

January 2012 - KD

I have a lot of skin in the game esp. w.r.t the JDB collection reporting as it may stay on file for 7 years starting January 2012.

No, no, no! The JDB's entry is not going to remain for 7 years. Their entry will fall off when the OC's entry falls off. It's the same account...just 2 different owners, and you haven't made any more payments on the account. If the JDB attempts to keep the account on longer, you can nail them.

I'd would dispute the JDB's entry with the CRAs. They should be reporting a date of 1st delinquency, and it should coincide with the OC's DOFD.

[TomnTex]

As was said, it will fall off your CR in another six months to a year. Don't pay it, you will open up a can of worms. You will restart the SOL for another 7 years if not done right, you will be open to a 1099-C for the balance through the IRS and you won't get out of that one.

Wise to just wait it out!!!