Legal troubles over a decade-old debt to bank
February 13, 2009 2:35 PM Subscribe
[I am asking this for a friend.]
Legal troubles over a decade-old debt to a bank. I am being sued by a law firm representing a collection agency. I would like to find a way to resolve this situation that does not involve hiring a lawyer, since I cannot afford one. I receive income via Social Security Disability.
posted by not_on_display to Work & Money (16 answers total)
I recently received a letter from a law firm hired by a collection agency which has been trying to get me to pay a debt incurred about ten years ago through an overdraft credit line at Bank of America. The collection agency has owned the debt for probably six years now, and recently decided to sue me for the money. The letter came about the same time as a summons from District Courts of Massachusetts (Cambridge Division) letting me know that I had 20 days to respond to both the court and the law firm.
I would like to find a way to resolve this situation that does not involve hiring a lawyer, since I cannot afford one. I would like to negotiate a settlement, if possible, and am seeking advice about how this can be most effectively done.
I cannot really afford to make payments on the debt--as for my financial situation, I am the parent of a minor, and my income is derived from Social Security Disability Insurance and food stamps. I am officially "disabled" by Social Security standards, after having undergone a long process of evaluation a few years ago, and do not work. My annual SSDI income for 2008 was $10,692 plus food stamps amounting to approximately $2760 for a grand total of $13,452. I do receive significant financial help from my child's father, though this is not officially or exactly on the record.
During phone conversations with the collection agency in 2006, I explained and documented my financial situation, proposing to settle the debt for significantly less than the amount they then said I owed including interest. Following these phone conversations, I wrote to them via certified mail to make this same offer in writing. [I've pasted the letter below.] My offer was also less than the amount they were willing to settle the debt for, which was $4785.93. (This figure is several hundred dollars less than the original debt incurred by me). I received no response to, nor acknowledgement of, this letter. Instead, I received continued demands for payment by phone and mail.
My credit is otherwise fine; I have student loans in good standing (deferral) and I am able to get credit cards and have always paid them on time in the rare instances that I use them. This particular loan, however, I have paid almost nothing on, due to a continuous state of financial exigency and, honestly, a long period of denial and irrationally hoping it would "go away".
Any advice would be much appreciated.
Here is the letter, and the offer I am still able to make now:
"I am writing to reiterate the offer I made with representatives of your company, [person 1] and [person 2], during our telephone conversation on 6/17/06. At the time of this writing, the offer still stands: I would be able to get a loan of $2000.00 from my mother on the condition that I show her a letter from [the Debt Recover Company] agreeing that this amount will settle my debt. Upon receipt of such a letter, I would be able to get $2000.00 from my mother and would be happy to pay it to you immediately.
"It was explained to me that your company wouldn’t accept this amount to settle the debt, and has opted instead to accept a monthly payment from me in the amount that I can afford to make. Enclosed is a check for five dollars, to be applied to my balance, as well as documents outlining my financial information.
"As you can see from my financial documentation, it is not possible for me to make anything beyond a "good faith" payment unless my health improves (or some other windfall occurs!) allowing me to substantially change my financial situation. Unfortunately, because my illness is degenerative, this is unlikely. For this reason, and because I don’t know how long the offer from my mother will continue to be available to me, I urge you to reconsider accepting the $2000.00 to settle the debt."