Midland collection - what to do?

[builttophil]

First off, I'm glad this forum exists - it's been a big help in my research, but I'm still overwhelmed - so I hope I can get some help for my specific case.

 

My wife and I are looking to begin the process of buying a house.  My wife's credit score is 720(XP), while mine is 629(XP).  The lender told us that my 2 active collections, totalling less than $1,800, need to be settled before getting a mortgage approval.  All my other debt is either previously settled or current and being paid as agreed.

 

I settled on one card, less than $500 original debt, for 45% -  easy enough.

 

My second alleged debt, originally $1,150 or so, is currently being held by Midland, for a HSBC NV card.  Current balance is under $1,500, interest still being applied.

 

Some history:

 

DLA: 08/09 (as of yesterday's CR), last payment 06/09.  SOL appears to have expired. (4 years as of 08/13)

Card was charged off in February 2010.

I have a credit report from November 2011 that shows the debt being held by Cavalry Portfolio Services - looks like they got it in March, 2010.  I received notices from them in the mail, never contacted or made a payment plan.

 

Midland got the account in December 2011.  Never received any correspondance from them.

 

Called them up last week to discuss the account, was told my buy-out "Market Offer" was about $850  - I delcined that offer and gave them no banking/card info.  They told me that offers had been mailed to me - to an address that I haven't lived at in almost 5 years.  Since last week, no calls or mail correspondance from them.

 

 

I'd like this off my CR, or at least shown as $0 balance, but I'm unsure how to proceed to get to that end.

 

I have a DV letter (the long-winded one from this site) set up and ready to go.  I figure that since the debt has changed hands at least twice, records will be sketchy at best (right?).  Assuming that Midland can't get me the info that's required, what's the next step?  Challenging it through the CRAs?  I've also read about Midland simply ignoring the DV and suing, but since I have an affirmative defense (SOL), I feel that may not be likely.  Will a negative (to Midland) DV be enough to get the tradeline deleted?

 

Assuming it isn't - what's the best way to negotiate a settlement - I did not mention mortgage to them at all, so in theory, I have the advantage, the debt isn't collectable from a legal standpoint, so why would they not settle for, say, 25%?

 

Honestly, I just want it gone, by the easiest (read:cheapest) way possible - but I am willing to settle if necessary.

 

Am I on the right track - or am I missing something?

 

Thanks in advance for your help!

 

 

[WhoCares1000]

You first need to figure out what is the maximum you would settle for. I do not know if a DV would work because they can simply say them mailed out the letters and did not have your latest address. Besides, all that would probably take longer than what you have to get the mortgage.

When you come up with a settlement amount, send a letter offering 1/2 that and inform them that this debt is SOL and hence, they cannot collect using the courts and you are willing to wait out the reporting period. At that point, let them decide if you are bluffing or not. Realize that they probably paid less than $150 for this debt so any settlement between $300 - $500 would give them enough to cover overhead and profit.

[builttophil]

You first need to figure out what is the maximum you would settle for. I do not know if a DV would work because they can simply say them mailed out the letters and did not have your latest address. Besides, all that would probably take longer than what you have to get the mortgage.

 

 

So, they would not be compelled to respond to the DV because they sent out letters more than 30 days ago?

 

Also, there is no real time frame to get a mortgage - we just started the process, finding an agent, talking to a lender - it's all preliminary right now - just seeing where we are at.  We'd rather not wait the 3 years for it to fall off my CR, of course, but are able to use some time to our advantage.

[WhoCares1000]

They might have to respond to your DV or they might not have to respond. The law is unclear on that when there is evidence that the JDB tried to inform you that they owned the debt. However, that in and of itself might take 3 years to clear up if the JDB takes the stance that they did everything right.

You might not want to wait 3 years but do they know that. They cannot sue you so if they think you are willing to let the time go by unless they settle, all the better for you. The winner of a negotiation is the entity that has the most information. They don't know that you want a mortgage. You know that they cannot sue you. Who has the upper hand here? You do.

One other thing, if you settle, make sure it says for full settlement of the debt so that they cannot sell this to the next JDB with a restarted SOL clock.

[admin]

@builttophil - http://www.creditinfocenter.com/debt/settle_debts.shtml