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When collections agency says it will escalate, exactly what does that imply?(small balance charged off 3 yrs ago)


start-again
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I'll try to be organized in order to give good information. 

 

BACKGROUND:

Three years ago, medical status forced me to default on four credit cards.

Have had to go on public assistance due to health. 

Total debt for all credit cards combined was less than $3,000 three years ago. (Not counting whatever interest or fees they've added since that date. )

Statute of limitations for credit card collection is 6 years in my state.

 

 One company's collectors did file a judgment against me, but due to my situation, they are not allowed to collect that judgment. It just sits there making my credit look even worse, and they're allowed to periodically question me about whether I can now pay it - which I'm told can continue for 20 years. 

 

Two of the companies have not been harassing me presently, but they have in the past. 

 

TODAY's QUESTION:

The fourth company's collectors are stressing me to the point of aggravating my health problems.

They say the debt is under $500. 

"Good cop" collector was understanding and said to keep calling them to show my good faith interest in repaying when my financial situation changes in the future, even though I can't pay anything right now. I was okay with that. 

"Bad cop" collector wanted nothing to do with what "good cop" collector had told me and insisted that I or someone MUST PAY this immediately --- and bad cop collector wouldn't listen to a word I said. 

"Bad cop" collector kept threatening that this situation would be escalated. What exactly can they do in escalation? It is a 3 yr old charged off debt. It is less than $500. Their fees for sending me to court for a judgment would be significant, and they would reap absolutely zero in money even if they do win. Is "bad cop" implying they'll go the route of a judgment? (I hate the idea of being served with papers, but there's nothing I can do to stop that if they're going to do it.) 

 

What do you make of this "escalation" threat?

What should I do about any of this? 

If I send a cease and desist, they can still escalate, right? If they want to call and go to my answering machine, I really don't care. I only answer calls from numbers I know. The only reason I answered their calls was that I was trying to be an honest and forthright person about debt. They don't care about truth, however. 

 

Thoughts please? 

 

Thank you.

 

PS: I will have questions about paying off old debt like this one - but that should probably go in another topic. I may be getting a settlement in a year or three - which would allow me to "live" again and pay off old debts. Until then, I have zero. 

 

 

 

 

 

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What "escalate" means is...nothing.  Its just one of those words CAs use to panic you into doing something you might not do otherwise.

 

If you can't pay...don't worry about it.  Worst they could do is get another judgement, but chances are they have already pulled your credit reports and know that you already have one uncollectable judgement against.  They will probably NOT spend the money required to get another.

 

Stop answering the phone.  There just isn't any good reason to put yourself thru that...these people do not care about your situation, and if they could make money by putting you in the hospital...they would.

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The way you worded that really put it into perspective. Thanks very much, because that means I can stop feeling on edge.

 

Looking down the road a few years, if I'm in a position where I can start living again and I have a steady income, I would like to rebuild my credit. However, I've read that paying off charged off debts years later can actually further drop a credit score . What happens if those old collection agencies would see new accounts opening at that point? 

 

I think it would be good for me to have a game plan, even if I can't act on it yet. Having a plan in mind for the future would at least give me hope that it won't ALWAYS be this bad. 

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Right now start call screening and do not bother to answer them.  You are just one of many excuses they hear every day.  They have absolutely NO interest in your personal situation beyond whether or not they can squeeze any money out of you.  Ignore them and concentrate on getting your health back. If you do and can do credit repair come back here and there are plenty who can help with that.  Hopefully the SOL passes without anymore lawsuits and you will have the leverage to force a settlement for pennies on the dollar when that happens.

 

6 years from the DOFD they can no longer sue you, well they can but you have an affirmative defense that it is time barred.  7 years from that DOFD you could hit the lottery and legally you don't have to pay them (well except that judgment) and they cannot report it on your credit reports.

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 Hopefully the SOL passes without anymore lawsuits and you will have the leverage to force a settlement for pennies on the dollar when that happens.

 

Can you help me understand the advantage of settling after SOL? 

 

 

 

6 years from the DOFD they can no longer sue you, well they can but you have an affirmative defense that it is time barred.  7 years from that DOFD you could hit the lottery and legally you don't have to pay them (well except that judgment) and they cannot report it on your credit reports.

 

I think I understand most of what you said here, but what is DOFD? (Date Of ___ Default?) Is that the same as the date the credit reports show as date of last payment? 

 

I think I need to understand parts of this better - is there a topic here that you'd recommend I read?  

 

Thanks for your helpful support. I really appreciate it. 

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I agree with Willing...they are just blowing smoke to try and get you or a family member to pay. Warn your family that they may get a call asking them to pay in order to keep you from going to jail. Worst case sanario. Will never happen. We do not have debitors prison in the US. Do stay off the phone with them as Willing said. Should you talk to them, remind them that you already have one uncollectable judgement against you. It's going to cost them to have another.

 

After the SOL of 7 to 7.5 years the debt falls off your TL, it won't show again unless you make some kind of payment and default on it. After that length of time it will no longer hurt your credit or be on your CR. In other words, send them all a C&D with the comment that have already have got an uncollectable judgement, and if they want to spend the money, get in line. Your okay, quit worring.

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@Clydesmom

 

6 years from the DOFD they can no longer sue you, well they can but you have an affirmative defense that it is time barred. 

 

This depends upon WI state law.  In most if not all states, the SOL is determined by the date of last payment.

 

@start-again

 

DOFD - Date of first delinquency.   This date is given by the OC on your credit report and determines the 7 year reporting period.

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What does escalate mean? It means some lawyer who almost flunked out of law school will look at the case, see the small amount of money involved, see that you already have a judgement against you which means they are not 2nd in line, and see that you are uncollectable, and decide to do nothing. It sounds like you have no assets anyways so likely, the judgement will be worth the paper it is printed on.

JDBs use words and emotions like weapons to make people do things they would not do, such as use rent and food money to pay on the debt. They say escalate because that term is so vague that they cannot be charged under the FDCPA for using it. Escalate may mean alot of things. It could mean that they show the case to their manager who decides to sell it to the next JDB. You have no clue what escalate means in their process. The IRS has done this too. I remember reading a memoir of an IRS collector. He said they would threaten people with filing a form when the form they mentioned simply was used to let the IRS know the tax debt was uncollectable and further collection efforts should cease. They made it sound like a bad thing however.

I suggest not answering the phone unless you are planning on them committing FDCPA violations that you can sue for. I would also tell family and friends that if they get a call looking for you or trying to get payment out of them, to note the phone number and tell the company where to shove it. If you decide to answer the phone and they say we will escalate, tell them to go ahead because you cannot get blood out of a rock.If they start to curse you out and you record it, you can get $1000 from them.

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Can you help me understand the advantage of settling after SOL? 

 

Once they know you have the SOL as a valid defense then their willingness to settle goes sky high because they no longer have the avenue of getting a judgment through the courts to collect.  At that point you do the math.  They probably bought the debt for pennies on the dollar.  So if they bought $1000 for $250 I would offer $125 to settle it because at that point not only will they not collect anything but in another year when they can't report it anymore you can tell them to pound sand and refuse to pay.  If you don't care about your credit for that last year and are still waiting on your health you can tell them you refuse to pay and not contact you knowing they can't do anything to you.

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A cease & desist letter *should* cause the phone to top ringing. Most people are reluctant to send such a letter because they are typically exposed to collectable judgments and are concerned it may trigger a lawsuit they don't wish to deal with. Everyone has to balance their own risk/benefit ratio based on their own specific situation. If call screening is sufficient then postage can be saved.

 

A JDB pays ~5% for CC debt. http://ftc.gov/os/2013/01/debtbuyingreport.pdf The FTC published the "Acquisition Expenditures" "Per $ of Face Value at $0.05224 for charged off credit card debt (Table 4 on page 64 of the pdf report). The JDB average costs to acquire CC debt, based on 35,220,694 accounts, is $52.24 per $1,000 of face value if we are to believe what they reported to the FTC. Suing consumers for $1,000 plus attorney fees and costs when the acquisition cost was $52.24 allows me to focus on which party, if any, should feel any guilt. A 1,914% markup is extraordinary ROI if you can routinely get it. Fortunately there is a wide gap between buying debt and getting a 2,000% return every time. That variance in ROI per account is what keeps the wholesale prices at a nickel per dollar of face value.

 

Health permitting I would research WI debt collection laws and make sure I held the harassers to the letter of the law. Otherwise I would relax and not deal with their phone calls and follow the good suggestions previously posted.

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