Broadband Tech > General Questions > Collection Agency...What Is Typical?

reply to AZinOH

Re: Collection Agency...What Is Typical?

reply to AZinOH
Several years ago Blockbuster debited a closed checking account for some DVDs they stated I did not return. As I had closed that account, the bank charged me around $60 in late fees. I did not realize this as I had moved and they turned it over to a collection company. I did not handle this correctly and told the collection company I would follow up with BB as I felt I did not owe them anything. A month or two went by and the collection company turned it over to an attorney who filed suit in big boys court (not small claims). As I had a contract with the bank, I now owed around $400 in collection fees. I filed an Answer and we went to mediation. They were now asking for $600 and told them I'd drag the bank into it and spend all day in court. They refused and would not take less then $600. I figured I had little to loose by rolling the dice in court. We went back the following money and I did as I stated. I ended up loosing a owing $650... which I paid right away and the collection company agreed to file the correct paperwork with the court. It never showed up on a credit report... probably as I agreed to pay very quickly.

Your nephew does have a contract with the company and it probably does state that collection fees can be added onto the debt. In my state a company can garnish wages with a judgement but I don't think this is very typical (this is why I agreed to pay in the end) and it basically takes wages down to minimum wage. It can also affect someone's credit and cost them a _lot_ more in the long run. It might be difficult to obtain a checking account, it might be difficult to obtain a debit or credit card. Credit card rates might be higher, auto insurance might be higher, some employers won't hire you if they run a credit report (I work as a claims adjuster and they _always_ run a credit report).

You never know what a collection company will do. I'd recommend that he research this and send the proper letters to have the collection company send the proper documentation or drop the case. It's needs to be done now instead of later. It might already be too late. Sticking your head in the sand almost never makes these issues go away. They only get worse.

reply to Draiman

reply to AZinOH

The thing that I understand about collection agencies, they buy a bundle of outstanding bills from credits for pennies on the dollars.
So my couple hundred dollar debt, had only cost them may 30 to 50 dollars to pick up. If I paid it, the person bugging me would have gotten a portion of that, and the rest goes to the agency.
Yes, the person you talk to one the phone is paid on commissions. Hence why they are so eager to talk to you and to get you to cut an e-check right then and there.

And like others have said, they have a 7 year window to collect on that debt. Though sometimes it will circulate for longer then that and agencies will still try to collect on it.
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Is a person a failure for doing nothing? Or is he a failure for trying, and not succeeding at what he is attempting to do? What did you fail at today?.

reply to CylonRed
This is the law the governs collection agencies:
»www.ftc.gov/os/statutes/fdcpa/fdcpact.shtm

Some agencies may not follow the law but if they do not there are steps you can take.

reply to AZinOH
I'd like to point out that there are generally two types of collection agencies out there.

The ones I consider legitimate are acting as agents of the lender - basically just the lender outsourcing their collections and they almost always follow the rules. They are the only ones that can sue you and so forth. They try to collect for whatever time period the lender wants them to then either sue or charge off the debt. Rarely does that process go on past 9-12 months. As an agent of the lender, they can negotiate payments, lower the amount owed if they wish, and you actually can sometimes negotiate with them to remove the negative entry from your credit report if you pay the debt.

The snakes are the ones that purchase charged off debt from the lenders - at that point the lender has charged off the debt and they are done with it. These are the ones that break the rules about when and where they can call you, often chase the debt way past any statute of limitations for sueing, etc. They have -NO- legal standing to do anything to you - they can't put anything on your credit report, they can't sue you, -nothing- despite what they may claim.

The snakes can't remove the charged off entry from your credit report even though many will promise, even in writing, to do so. Only the original lender can do that and once they charge off a debt, they generally won't. (and legally can't take any monies from you)

reply to pcdebb
Payments do not re-age a debt. Once a dept is charged off - which normally occurs prior to going to collection - the charge off date is what is used to determine the seven years.

Any collection agency calculating the date in any other manner is violating the FDCPA

reply to faughro

reply to AZinOH
All the 7 years is for credit reporting. It doesn't make the debt collectors stop and they might even be able to sue you for another 3 years as the state statue of limitations is 10 years in some states. After that time they can try to collect but cannot sue or report to the credit agencies unless you make a payment and that resets the SoL in your state. There's nothing you can do to stop them from trying to collect the debt except your death. Even then depending on the amount they might go after your estate.
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What we're saying today is that you're either part of the solution or you're part of the problem. - E. Cleaver 1968

reply to craig70130
You are correct, for some states - I was stating for my home state of Florida the charge off date is considered the last activity date even if a payment is made after the charge off. I should have been more clear in the information I was providing.

reply to AZinOH
Here's the list of states that require a new written promise to pay to reset the SoL.

"If you live in one of these states, simply sending in a check doesn't restart the clock. The statute of limitations is only extended by new written promise to pay in these states:
Arizona, California, Florida, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nevada, New York, Texas, Virginia, West Virgina, Wisconsin."
»www.creditinfocenter.com/rebuild···ns.shtml

Also note the debt collector can pick the state the debt was incurred or the state where the person lives now if they are different. You can bet they'll pick whatever state's SoL benefits them. If you opened a credit card in Florida then moved to Ohio they can pick Ohio and a partial payment will reset the SoL on that debt.
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What we're saying today is that you're either part of the solution or you're part of the problem. - E. Cleaver 1968

reply to tcope

I learned the same thing many years ago.

-ALWAYS- close a bank account properly. Don't leave a few dollars, in it, etc. Bad bad bad.

reply to AZinOH