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Dell Financial Charge Off Letter...HELP!


CreditCrisis
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Okay, please forgive me if this information is here and I've missed it.

Today my husband received a charge off letter from Dell indicating payment is due immediately in the amount of $3600+.

 

This is an account he opened five or six years ago to buy a laptop, approximate retail 1200.  Before we were married, he enrolled with a credit payoff place, which he's still using, to pay off his cc debt.  Here's the part where he gets dumb:  He didn't know that The Evil Dell doesn't accept 'agreements' with these places, so they continued to charge him late fees, over the limit fees, etc. even though they received hefty monthly installments.  They changed the payment date on the account AND the minimum amount due, at some point, and since he was stupidly not monitoring his accounts, this had, shall we say, a significant impact.

 

I'm not sure why this is being 'charged off' now, but the fact remains.

 

I am sure Dell will hunt us down in the night with tar and pitchforks, because they're Dell.  Three years ago I lost my job, which left me unemployed for nine months, at which time I accepted a position making about $20k less per year.  Since I'm the larger income, this was devastating.  I cashed out ALL of my retirement savings to pay off my debts during that time having come close to being completely dysfunctional being buried in terrifying collection calls ALL! DAY! LONG!

 

Moral of the story: We don't have money to pay this debt.  I'm sure they'll end up suing us.

 

What can I do? Is there anything to I can do? If his wages are garnished for a judgment, we will be unable to pay our mortgage and meet our daily expenses.  And believe me...we do NOT live a lavish lifestyle.

 

Please help.  Any suggestions or advice or, if any exist, Dell Success Stories would be greatly appreciated.

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I forgot to ask, regarding statute of limitations for debt...my state's SOL is 3 years.  When we're talking about SOL, and the information I find says that a partial payment doesn't reset the SOL (right? I think? do I understand this correctly?), does that include the original creditor?  Since Dell's minimum monthly payment is larger than my husband's paycheck, they haven't received a 'full' payment for quite sometime.  Does that impact the SOL, or is the last time they received ANY payment the beginning of the SOL period?

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An additional question...

 

In regard to debt verification and signed contracts...with a thing like this, does a contact actually have to have a pen and ink signature on it to be a valid contract?  What about those kinds of 'apply on line and by using this card you accept the terms of the contract' type things?

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An additional question...

 

In regard to debt verification and signed contracts...with a thing like this, does a contact actually have to have a pen and ink signature on it to be a valid contract?  What about those kinds of 'apply on line and by using this card you accept the terms of the contract' type things?

That's called account stated and yes, it is valid.  

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@CreditCrisis

 

The Statute of limitations in Kansas is 3 years.  They can't do anything to you.  If they take you to court, you have an absolute defense.  No Worries!  Calm down and breathe.  

I'm not sure I was super clear...that calm down and breathe thing, you know!  He has been making monthly payments on this account up until, as far as I know, last month. They just haven't been the whole payment they were asking for.  So, even though they haven't received a MINIMUM payment is he still outside the SOL?  (I suspect not.)  And thanks for the fast reply.  And the good advice! ;-)

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@CreditCrisis

 

Since you've been paying all along, it doesn't matter that he hasn't made the minimum required payment.   Unfortunately, making payments period has kept the account within the SOL.

 

60-520.Part payment or acknowledgment of liability. (a) Effect. In any case founded on contract, when any part of the principal or interest shall have been paid, or an acknowledgment of an existing liability, debt or claim, or any promise to pay the same, shall have been made, an action may be brought in such case within the period prescribed for the same, after such payment, acknowledgment or promise; but such acknowledgment or promise must be in writing, signed by the party to be charged thereby.

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 Before we were married, he enrolled with a credit payoff place, which he's still using, to pay off his cc debt.  Here's the part where he gets dumb:  He didn't know that The Evil Dell doesn't accept 'agreements' with these places

 

Actually the bolded part is where get was the least smart.  These places arrange settlements AFTER they default on your accounts.  Most creditors will not work with them because basically it is a planned default to attempt to force the creditor to accept pennies on the dollar for thousands in debt.  The only entity that makes money on these deals is the alleged debt management company.

 

They are probably deducting a larger portion of what he sends them as their "fee" and little goes to his creditors.  The creditors know this. Why should the DM company get more of the money than what they are owed?  That is why they won't deal with them.

 

What can I do? Is there anything to I can do? If his wages are garnished for a judgment, we will be unable to pay our mortgage and meet our daily expenses.  And believe me...we do NOT live a lavish lifestyle.

 

Please help.  Any suggestions or advice or, if any exist, Dell Success Stories would be greatly appreciated.

 

First see if there is ANY way to get him out of this "debt management" program.  More than likely they have already trashed his credit so it isn't doing any good.  Next HE needs to order copies of all 3 of his credit reports.  Find out what is reporting and by who.

 

Once he knows what is on the credit reports then you can devise a plan to settle these debts directly with the creditors before he gets sued.  The problem with this DM company is if they screw it up or the creditors don't agree they will dump your husband faster than he can blink.  Their ONLY responsibility is to collect and forward money.

 

If Dell does sue before you can settle the account then you defend it.  Do NOT no-show for court or fail to answer and give them a default judgment.  You might lose but you still have leverage.

 

Now I need to state the obvious:  go sit in court and watch a half days worth of credit suits.  You will hear the judge say the same thing:  while the economy has been terrible, job loss, other bills, medical etc. if you have not paid then the law is clear:  you will lose.  All the excuses or reasons in the world won't change that in court.  If the OC sues you directly then the odds go WAY WAY up that they have all the documentation they need to prove that it is your debt and get the judgment.

 

If he does get sued and lose you can apply for a hardship waiver to reduce any garnishments they get but I wouldn't hold your breath on that.  In the mean time YOU need to get his name off of the household bank accounts.  ANY account with his name on it is subject to garnishment.  He needs to be "off the grid" as much as possible.  Talk to a tax expert about filing separately to avoid them taking your refund. Keep as little money as possible in the bank to avoid them getting any if they do garnish.  

 

In the meantime breathe and relax.  It is best to try and negotiate a settlement.  Even though they have charged it off it does not mean they won't work out payment arrangements to settle it rather than go to court.

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@CreditCrisis  I've been in your shoes, here are a few thoughts:

  • If you still have a land line, get an answering machine and don't answer the phone.  Preserve you sanity.
  • If you don't have a Cell phone, get a prepaid one.  If you have one, look into changing the number if the CA have it. Only answer recognized numbers.
  • If you get a CA on the phone, tell them: "I do not discuss these matters over the phone, send it in a letter." Then hang up.
  • Accept the fact that you probably will be sued, but don't dwell on it.  Resolve to meet it head on when it happens, but not until then.
  • Look a adopting a Dave Ramsey approach to your bills: 
  1. After taking care of the necessaries (Food, utilities, rent),
  2. Build $1,000 emergency fund.
  3. Use the "Snowball method" against your debts. (It works)

 

Keep in mind it's just business and not personal, even though from your perspective, it is very personal.  Make it a business and divorce yourself from it.

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