waverlymike

Paying Debt - Options?

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I have one open collection left on my credit reports. It's something I don't really feel I owe but I don't have evidence of this so that's a story for another day.

 

My question is, what is my best option if I can pay the full $800? It still has about 3.5 years before it will age off and I'd like to just take care of it. The DC is not being helpful and I don't want a "settled in full." I basically have admitted I owe it and it's very obvious that it's my debt. They refused to PFD for $500. Should I ask for a PFD or just tell them I'll pay the full amount if they report it as "Paid in Full?" Is there another option, like to have it show up as paid as agreed? Or is that not possible because it is the collector that is reporting it?

 

Thanks!

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Does the OC still own it?  If so, contact them and pay them directly.  If they report "Paid  in full" or "Paid as agreed", that's better than having a CA on your reports....

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I believe the OC does still own it. They aren't showing up on my credit reports though, just the Collection Agency. If I contact them and get them to put "Paid as Agreed" will the Collection Agency then drop off of my CR?

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What kind of debt?  And why don't you think its yours?  Answers would indicate how to approach the OC...if the OC isn't reporting, but a CA is...I'm guessing its medical.

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It's "mine" but I shouldn't owe it. Here's what happened -

 

I signed a 2-year contract with Best Fitness. Two months into it I had to move for work so I went in and paid a fee to have the contract terminated. Then about 1.5 years later or so, I got a notice from the collection agency that I owed $800 for the full balance of the contract. I was young and stupid, didn't have a record of the contract termination agreement and am at a new bank so I don't have records of this happening. So I'm willing to just pay it at this point because I really see no way that I'm going to get this taken off. I talked to Best Fitness and they said that A) they didn't even do early contract terminations and B) they had no record of my conversation with the rep that I worked it out with.

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Hmmm...did you pay by check or credit card?  You might be able to contact your previous bank and get a copy.

 

Otherwise, if it were me, I'd call BF again...tell them its my personal policy not to deal with CAs (you cannot trust them)...so in return for BF calling off the CA, you'll send them a check directly.  Draft a letter that you send along with the check (CMRRR) saying this pays the debt in full and by cashing the check, they agree to your terms.  ("Restrictive endorsements" are not binding in many states, but since your next step here would be court, you at least have proof you sent the check).

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So if I talk to someone at the OC, they can get the collection agency to come off of my credit report? I just want to make sure that if I agree to pay the OC in full then the collection agency will come off. If the OC isn't even listed on my CR, will they then end up listed on my CR? Sorry, just kind of confused about how it works with the OC and CA.

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YYou can stipulate in your letter that the OC won't report, and they'll call off the CA.  Once the CA is "dismissed" by the OC, they have no legitimate reason for reporting.

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Ok thanks you've been really helpful. Last question. How do I make sure that the OC still owns the debt and that it's just assigned to the CA. Do I send a letter to the collector?

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Ok thanks you've been really helpful. Last question. How do I make sure that the OC still owns the debt and that it's just assigned to the CA. Do I send a letter to the collector?

You call them (the OC).  

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An OC reporting "paid in full" (even with some lates) hurts a lot less than a CA.

 

And, since it costs money to report, its unlikely the BF will bother.

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Also, any thoughts on this comment I came across on another forum?

 

 

Paying either party will result in satisfaction of the debt, so from that viewpoint, as long as payment is clearly acknowledged as satisfaction of the debt, it doesnt matter which wallet the payment initially goes into.

 

If you pay the OC, they must then notify their debt collector that the debt is satisfied, requiring the debt collector to update their reporting to paid, $0 balance under collection, and close their collection.  The OC cannot compel the debt collector to delete their own reporting. The OC can request them to do so, but cant compel.

The OC terminates the collection, but that does not make accurate reporting done by the debt collector inaccurate.  To the contrary, CRA reporting guidelines clearly instruct all furnishers that they are not to delete prior, accurate reporting based on payment of the debt.

 

The OC has not reported, so their is no issue of a PFD to them.  Dealing with the debt collector provides the opportunity to strike a PFD deal with them.

Paying and then requesting debt validation wont get deletion.  First, they have no requirement to respond to a request for debt verification.  Presuming your DV would still be timely, which it would apparently not, it would only impose a cease collection bar on them.  With the debt paid, there will be no further collection activities, so even a timely DV would accomplish nothing.  And even if they did choose to respond, verification would be quite simple.  "We verify that the debt is $0."

 

I would recommend dealing with the debt collector, not the OC.

 

 

 

I'm confused now as to whether I should negotiate with the OC or the debt collector.

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Not entirely true, and its sounds like something a "debt fixer" would say.

 

First, you need to be certain the OC still owns the debt.  CAs don't buy debts. Junk Debt Buyers (JDBs) buy debts.  CAs just handle the hassling for either an OC or JDB...and, paying a CA does not guarantee that the debt will be satisfied...you cannot trust a CA...their whole business model is predicated on scaring people into doing things they might not otherwise do.

 

If the OC still owns it (ask them!)...pay the OC with the stipulation that they call it back from the CA...YES, they can do that.  And, once they have, the CA no longer has any "credit relationship" with you, and therefore should not be reporting.

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Some states see early termination fees as an unenforceable liquidated damage clause.

 

From what you posted it has been about three and a half years since you broke the contract. If this is correct tell them to go flip sand see you in court.

 

You have several defenses besides the issue of the early termination fee.

 

If they sue they will have to claim breech of contract.

 

Doctrine of Laches; This bars them from their claim due to unreasonable delay that has caused you to be prejudiced. laches is based on the legal maxim that "Equity aids the vigilant" it can also be interpreted as "you cannot ask for something now that you should have asked for then" it is a failure to do what the law requires to protect one's rights.

 

 

Equitable estoppel;  protects one party from being harmed by another party's voluntary conduct. Voluntary conduct may be an action, silence, acquiescence, or a concealment of facts.

 

Acquiescence;  Conduct recognizing the existence of a transaction and intended to permit the transaction to be carried into effect; a tacit agreement; consent inferred from silence. Acquiescence relates to inaction during the performance of an act

Sometimes silence is not golden.

 

Why throw in the towel so easy.

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I have no proof on my side that I ever canceled the contract. They claimed that they tried to extract my payments but my bank account was changed since I changed from a local credit union to a big bank when I moved. They also claimed they tried to notify me but I never received the notifications since I moved. At this point, I want the information off of the credit report.

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Call the OC and see if you can get them to take payment.  The CA may still report, but you can dispute with the credit bureaus.  Since they have no skin in the game at that point, they may choose to delete the account.  If not, you may have a case against them in court.  (Violation of the FCRA and possibly the FDCPA). 

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Great, excellent and thank you for the responses. You all are immensely helpful. FINAL question.

 

If I call the OC and they tell me that they will accept payment, what should I say in the agreement proposal letter to make sure that they don't report on my CR (they haven't reported, just the collection agency) and that my file is taken back from the CA?

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Great, excellent and thank you for the responses. You all are immensely helpful. FINAL question.

 

If I call the OC and they tell me that they will accept payment, what should I say in the agreement proposal letter to make sure that they don't report on my CR (they haven't reported, just the collection agency) and that my file is taken back from the CA?

@waverlymike - There's actually not much you can do to force the OC to pull back the collection from the collection agency.  They usually do this as a matter of policy.  Once you pay the OC, though, you should be able to force the collection agency to stop reporting.  They shouldn't report if you've paid the OC.  They have no skin in the game at this point, so they should not be reporting.  I would also dispute with the CRAs as "not mine".  

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While you may have no proof, once you state the fact that you did pay an early termination fee, the burden will shift to them to prove you did not.

 

If you moved so far away that there was no reasonable expectation that you could comply with the contract, courts can rescind a contract any time the need arises. Is there an escape clause in the contract?

 

There are ways to legally breech a contract.

Rescission by the court, A court can pretend like the contract never existed. Here, neither party would be required to perform the obligations under the contract. If there has been performance by one party, the court does its best to put that party in the same position he or she was in before the contract was formed.

 

The contract is unconscionable. A contract won't be enforced if it is grossly unfair. This almost always occurs in situations where the bargaining power is severely imbalanced (as in a contract of adhesion) and the party with more power takes advantage by forcing unfair conditions, clauses, or waivers on the other party.

 

estoppel. When one party makes a statement excusing performance of the agreement and the other party relies on that statement, the first party may be prevented from later denying that statement and claiming a breach.

 

Equitable remedies

Specific performance, this is where the court orders the breaching party to perform the contract.

Specific performance is not available in the following circumstances:
Damages provide an adequate remedy.
Where the order could cause undue hardship.
Where the contract is of such a nature that constant supervision by the court would be required,
Where an order of specific performance would be possible against one party to the contract, but not the other.
Where the party seeking the order has acted unfairly or unconscionably. He is barred by the maxim ‘He who comes to Equity must come with cleanhands’. (Doctrine of unclean hands)
Where the order is not sought promptly the claimant will be barred by the maxims ‘Delay defeats the Equities’ and ‘Equity assists the vigilant but not the indolent’.(Doctrine of Laches)

 

 

At this point in time it will not matter who you pay, the oc or the ca, it will still get reported as a paid collection. The only way to avoid this is to make an agreement with the oc to withdrawal to debt from the ca and then you will pay it. That way the ca cannot report anything.

 

But i do think you can convince a court that you did pay an early termination fee, but if you cannot, I do believe the court will rescind the contract due to your moving.

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Yea, I appreciate the legal info but I don't have the time to deal with court and honestly don't think I have a strong case. I've got the money set aside for it, so I'd rather just go that route. I'm going to call the original creditor when I get a chance and ask if they still own the debt and that if I pay it, they'll pull it back from the collection agency. That's what I want to do, right? And should I then send a letter asking for confirmation of that, or just send the payment with a letter stipulating that upon cashing of check they must recall the collection from the collector?

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Yea, I appreciate the legal info but I don't have the time to deal with court and honestly don't think I have a strong case. I've got the money set aside for it, so I'd rather just go that route. I'm going to call the original creditor when I get a chance and ask if they still own the debt and that if I pay it, they'll pull it back from the collection agency. That's what I want to do, right? And should I then send a letter asking for confirmation of that, or just send the payment with a letter stipulating that upon cashing of check they must recall the collection from the collector?

@waverlymike - yea, in my opinion, that's what you should do.  

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I would make sure that the do take it out of the hands of the ca before you pay,

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I would make sure that the do take it out of the hands of the ca before you pay,

You might not be able to force this.

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