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azmtbrJason

collections on closed paid account

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I posted a question I think in the wrong forum, I pulled my credit and noticed that all of my CitiFinancial mortgage and equity line of credit entries which I defaulted on back in 2008 had been changed to positive paid closed entries. I did a little searching and found that the changes were part of a settlement with the US Department of Justice that (i could not find the full reference only a summary on DOJ website) the negative reports would be changed and no further collections will be pursued. Unfortunately prior to the decision Citi had already turned an account  over to Cavalry Portfolio and that Data collection is appearing on my reports, additionally today i received a letter from an attorneys office claiming to represent Cavalry and wanting money. My question is, how do they have a right to collect on a non-existent debt? I am filling out my letter to validate and have filed disputes with both Cavalry and the CRA's.

Thank you,

Jason

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Unfortunately prior to the decision Citi had already turned an account  over to Cavalry Portfolio and that Data collection is appearing on my reports, additionally today i received a letter from an attorneys office claiming to represent Cavalry and wanting money. My question is, how do they have a right to collect on a non-existent debt? I am filling out my letter to validate and have filed disputes with both Cavalry and the CRA's.

Thank you,

Jason

 

Turned over or SOLD?  If the debt was sold (and it was prior to the DOJ ruling) then you don't benefit from the DOJ ruling.  The assignee may still collect.

 

The debt still exists.  The DOJ ruling does not erase the debt.  The ruling simply stated that Citi agreed to change the entries and no longer pursue collection due to their abuses without admitting wrong doing.  The debt still exists.

 

You need to establish WHO owns your debt and when.  If the CA is attempting to collect on the debt for Citi I would find a consumer attorney.  If a JDB has bought the debt you may be out of luck as they can likely legally pursue the debt.

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I would at least bring up this DOJ ruling in court, it may or may not hold any weight with the court, but if you do not bring it up you know the answer.

 

You have some defenses on this the account on your credit report says its paid.....bring that up in court. I A validation letter will preserve your rights under the fdcpa, but it takes hardly nothing for them to comply to it. I would send it any how. If you do not want to pay, then wait thirty days after the dv letter and send them a cease and desist order. Ten the have to either go away or file suit.

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BTO beat me to the punch on this one. 

 

If the specific account that this attorney is contacting you about appears as "paid and closed" under the original citibank entry, then I would definitely point this out to the attorney, that he is attempting to collect on a debt that has already been closed and cancelled out due to litigation by the USDOJ.  If they intend to pursue it after that information is handed over, then let them prove that they still have the legal right to pursue it. 

 

BTO, do you think that this would be a good situation for your letter?  It might...seems that this DC attorney might be trying to collect on a debt that no longer exists, and if he's got the stones to try that, then he might need a solid dose of wake-up.  Anything less, and he will probably continue to push the issue, I think.  We need to keep in mind that these attorneys often know that they are not acting within the law, but choose to act anyways because the consumer doesnt know any better.

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I am not allowed to post my letter any more,,,,,

It was not posted in its entirety any way, 

It s a long story but I cant talk about it on the board.

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Thank you to all, I recieved (timing is everything) yesterday an attempt to collect on this debt from a firm I fired off a validation letter to try and find out who really owns the debt. Also meeting with a Consumer Atty next week to get his take.  

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Turned over or SOLD?  If the debt was sold (and it was prior to the DOJ ruling) then you don't benefit from the DOJ ruling.  The assignee may still collect.

 

The debt still exists.  The DOJ ruling does not erase the debt.  The ruling simply stated that Citi agreed to change the entries and no longer pursue collection due to their abuses without admitting wrong doing.  The debt still exists.

 

You need to establish WHO owns your debt and when.  If the CA is attempting to collect on the debt for Citi I would find a consumer attorney.  If a JDB has bought the debt you may be out of luck as they can likely legally pursue the debt.

I respectfully disagree on this one.  If the accounts were all changed to paid and closed, that effectively wipes out the debt.  Citi found themselves in a position of being investigated.  If they did in fact mark this one particular debt as paid and closed like they did the rest of them, then the debt is paid and closed. 

 

Citi was investigated for illegal activity.  Regardless of whether or not they were required to admit to it in the settlement, that does not change the fact that there was a stipulation agreed to on debts that they originated.  If they agreed to the DOJ that those debts were no longer valid, then it really should not matter who they sold a debt to.  I would definitely fight this one. 

 

OP, please clarify the timeline and events for us.  Was this debt reported on your credit report by Citi to be paid and closed?  Also, when was the account turned over to the debt collector?

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Thank you to all, I recieved (timing is everything) yesterday an attempt to collect on this debt from a firm I fired off a validation letter to try and find out who really owns the debt. Also meeting with a Consumer Atty next week to get his take.  

Are you saying that yet another debt collector has contacted you trying to collect this same debt?  It may help us if you can tell us the names of these debt collection companies.  Many of them pattern their behavior

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The original debt from Citi is marked Paid, Closed/Never late 10/2006, the collection agency is Cavalry they have a date opened marked 04/2010 it lists OC as CitiFinancial. the letter I recieved was from Dynia and Associates who claim to represent Cavalry. I had not heard from anyone about this account in years then just recieved a letter yesterday.

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The original debt from Citi is marked Paid, Closed/Never late 10/2006, the collection agency is Cavalry they have a date opened marked 04/2010 it lists OC as CitiFinancial. the letter I recieved was from Dynia and Associates who claim to represent Cavalry. I had not heard from anyone about this account in years then just recieved a letter yesterday.

 

SIGH.  I wish you had put this information in the first post it makes a HUGE difference.  Dynia and Associates are bottom feeder lawyers out of Illinois.  They cannot prove ANYTHING and fold like a house of cards when challenged.  

 

Did you send the DV to Dynia or Cavalry?  If it was to Calvary go ahead and send a VERY threatening one to Dynia too and at the same time open a complaint with the CFPB.  They should fold almost immediately.  They did when I challenged them on a debt I didn't owe and I knew they could not prove.  

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I respectfully disagree on this one.  If the accounts were all changed to paid and closed, that effectively wipes out the debt.  Citi found themselves in a position of being investigated.  If they did in fact mark this one particular debt as paid and closed like they did the rest of them, then the debt is paid and closed. 

 

Citi was investigated for illegal activity.  Regardless of whether or not they were required to admit to it in the settlement, that does not change the fact that there was a stipulation agreed to on debts that they originated.  If they agreed to the DOJ that those debts were no longer valid, then it really should not matter who they sold a debt to.  I would definitely fight this one. 

 

OP, please clarify the timeline and events for us.  Was this debt reported on your credit report by Citi to be paid and closed?  Also, when was the account turned over to the debt collector?

 

If you read what I wrote carefully I didn't say I agreed with what happened only that the TIMELINE was critical.  If the debt was sold off prior to the DOJ ruling then the OP would not benefit from that ruling as Citi no longer owned the debt regardless of what may have been erroneously reported on a CR.  If the debt had legally been sold PRIOR to the ruling wiping it out then the new creditor does not lose their rights to collect.  

 

That is why I asked what the time frame was.  It makes ALL the difference.

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I sent DV to both, Cavalry from my credit report and Dynia immediatly after i recieved their letter.  I also filed cfdb against Cavalry Yesterday (before letter).   

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I understand the question of timeline who owned what when, In my thinking if OC sold the CA what they thought was a valid debt then later OC changed their mind for whatever reason, the CA should be after the OC? I realize i'm the small fish/easier target in this scenario.

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I sent DV to both, Cavalry from my credit report and Dynia immediatly after i recieved their letter.  I also filed cfdb against Cavalry Yesterday (before letter).   

 

Amend the CFPB complaint to include Dynia.  

 

You have NO idea how bad Dynia is.   They simply call on debts that may not even exist and extort payment.  I am not entirely uncertain that they don't data mine for consumer information to make contact on non-existent debts and rake in the money.  

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Just so you know how low they are:

 

23 lawsuits have been filed against Budzik & Dynia for alleged violations of the Fair Debt Collection Practices Act, listed by Justia. 

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If you read what I wrote carefully I didn't say I agreed with what happened only that the TIMELINE was critical.  If the debt was sold off prior to the DOJ ruling then the OP would not benefit from that ruling as Citi no longer owned the debt regardless of what may have been erroneously reported on a CR.  If the debt had legally been sold PRIOR to the ruling wiping it out then the new creditor does not lose their rights to collect.  

 

That is why I asked what the time frame was.  It makes ALL the difference.

No, I understood what you were saying.  Please dont think I meant any disrespect, I did not.  My point was addressing what you are saying.  Whether or not the debt was sold prior to the ruling is not necessarily the end of the tale though, and that is what I disagreed with. 

 

Essentially, the settlement from DOJ requires Citi to admit it was at fault without having to officially admit it was at fault.  No bank is going to cancel all those debts for no good reason.  If the debt collector got the debt prior to the settlement, it does not change the nature of the origination of the debt.  Imagine this....Imagine I stole a car.  I then sell it to you with fabricated paperwork.  You bought it in good faith, thinking everything was fine.  Then, the police knock on your door and tell you that your car was stolen.  Do you get to keep the car?  Of course not.  Your action of buying the car, though legal and permissible by law, does not change the fact that a wrong has been committed beforehand.  There are legal ways to argue the point that even if the debt was acquired prior to the finalizing of the settlement, the origin of that debt is still suspect at best.  One thing I would do is that I would compare this debt to the timeline of the others that I had, since the OP said he had multiple loans through Citi at that time.  If they were all originated by the same people, in the same manner, and around the same time frame as covered by the settlement, then you can make a good argument that this account is also damaged goods.  Selling a fraudulent account does not remove its fraudulent origination.  It only clouds the issue.

 

I recall a case in Florida where a man bought a car from someone off of eBay in another state.  The seller lied about the car's legal status.  The car had a lien on it, and the seller lied to the buyer and told him that as soon as he payed the bank, he would send the title to the new owner.  The next thing the buyer knew, a repo man showed up and took the car.  The buyer had no recourse except to go after the seller.  The fact that he paid for the car in full and in good faith did nothing to change the truth about the car--that the loan on the car was 10 months behind and that the bank had been looking for the car.  The seller committed fraud.  Citi also committed fraud if it unloaded an account that was included in the scope of the DOJ lawsuit before disposition.

 

You said earlier:

The debt still exists.  The DOJ ruling does not erase the debt.  The ruling simply stated that Citi agreed to change the entries and no longer pursue collection due to their abuses without admitting wrong doing.

 

The problem I see with that statement is that the original creditor has declared this account to be paid and closed.  If an OC declares that an account was paid and closed, it means that there is no longer a debt associated with that account.  A debt cannot legally be "paid and closed" and "still owed" at the same time.  In third party debt collection cases, the standard required if you push the DC is "what does the original creditor say about this debt".  Thats why when we are in court against a CA, we object to their in-house affidavits and demand strict proof from the OC, right?  Well, the OC in this case is reporting no debt still owed.  There's really no way around that unless the consumer does not fight for their rights.  Thats why I said I would definitely fight this one.

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Just so you know how low they are:

 

23 lawsuits have been filed against Budzik & Dynia for alleged violations of the Fair Debt Collection Practices Act, listed by Justia. 

You are on the money, Clydesmom....

 

I looked on Google Scholar and found a couple myself.  Here's one where they never even responded and lost by default:

http://scholar.google.com/scholar_case?case=15384152638009500537&q=Dynia&hl=en&as_sdt=8000003

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Something I think is important that doesn't seem to have been addressed is the origin of this debt. Are they trying to collect on the mortgage deficiency or the HELOC?

If it's the mortgage deficiency, did you have a judgment entered against you? If so, was it legal? Read this to find out:

https://www.google.com/url?sa=t&source=web&cd=1&ved=0CDQQFjAA&url=http%3A%2F%2Fwww.folksoconnor.com%2Fpdf%2Fantideficiency.pdf&ei=IEPHUsaNFZCCogSr-oLwBQ&usg=AFQjCNHSzzJDolUgn6tH2y5d1cDETybatw&sig2=H-6R4aBZi0QcbltpMfWgkg

In short, if the mortgage was for a single family home on less than 2.5 acres, you lived in this home and the home itself was the collateral for the loan, they cannot legally collect the deficiency from you if the home was sold at a trustee sale.

If it's the HELOC they are trying to collect, is there a judgment for that? Same rule applies here if the home was the collateral for the HELOC.

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Indiana University student, bored from studying hope you do not mind me joining the convo.

There is a lot going on with the mortgage industry, all the illegal selling of mortgages, splitting the note from the mortgage, securitizing the documents, the list gets long. It is a lot of work dealing with these mortgage foreclosures. Most of them are fraudulent. It takes a lot of work on the part of the person that was foreclosed on, but you can beat them. The really big issue is were the plaintiff in your case actually the owner of the note and mortgage. Every state seems to handle these issues differently. If your mortgage has a MERS number on it, chances are that you have one of these mortgages that are very hard to trace who really owns it.

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Indiana University student, bored from studying hope you do not mind me joining the convo.

There is a lot going on with the mortgage industry, all the illegal selling of mortgages, splitting the note from the mortgage, securitizing the documents, the list gets long. It is a lot of work dealing with these mortgage foreclosures. Most of them are fraudulent. It takes a lot of work on the part of the person that was foreclosed on, but you can beat them. The really big issue is were the plaintiff in your case actually the owner of the note and mortgage. Every state seems to handle these issues differently. If your mortgage has a MERS number on it, chances are that you have one of these mortgages that are very hard to trace who really owns it.

The problem for us Arizonians is most homes sold here are not technically a mortgage. They are deeds of trust, and when you sign one of these instruments you give the trustee the right to sell your home at auction without having to litigate a foreclosure when you become delinquent in your payments.

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The home was sold at auction, back in 2009 I was relocated by work nothing was selling (no shortsale) and no negotiations for refi. It was part of a HELOC and no judgement was filed. I took everything to a local Attourney (Prescott) and basically at this point its a waiting game to see how and if they respond to DV letter.   

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The home was sold at auction, back in 2009 I was relocated by work nothing was selling (no shortsale) and no negotiations for refi. It was part of a HELOC and no judgement was filed. I took everything to a local Attourney (Prescott) and basically at this point its a waiting game to see how and if they respond to DV letter.   

I'm still not sure if the debt they are trying to collect is the deficiency from the mortgage or the HELOC.  It sounds like both maybe?

 

Anyway, if you looked at that link I posted, you can determine if Citi ever had the right to collect the mortgage deficiency or the defaulted HELOC.  If not, Citi had no right to sell the debt and are as liable (if not more so) than any bottom feeder JDB or attorneys that have since dunned you on this debt.

 

If you already have a lawyer, you should probably be asking him/her about these things anyway.

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