i'll see your $0.01 and raise you $5000...
May 14, 2012 7:27 PM Subscribe
debt collection offer...is it legit?
so...years ago i acquired a bit of debt right out of college. i transferred my balance to numerous different credit cards and was never able to really make a dent in the balance. i was contacted and responded to an offer by the last CC company i had, to make direct payments from my bank account over the period of a year to pay off the debt. ok, now silly me, i know, but i just assumed that after i had handed over my bank account number that things would go as planned. i neglected to look at bank statements very closely, as it would have revealed that the CC company was NOT taking payments from my bank account as agreed upon. the short story: now, i've been sued for the outstanding balance on this card and judgement is for the CC company. they have passed this along to a collection agency. just this week, the collection agency sent me a letter with an offer of "0% settlement" and stated they are willing to accept a settlement of $0.01 on a total balance of over 5k. now i KNOW this is a mistake on their part. it can not possibly be correct. however, if i mail in my payment of a penny, in direct response to their offer, would this stand? for those of you who will tell me that i incurred the debt and it's mine to pay, i understand that and am actually willing to pay much more than the one cent they have asked for. however, my question is: if i respond with payment to their offer (although it may be an error and most probably is), will it stand up in court or anywhere else it needs to?
so...years ago i acquired a bit of debt right out of college. i transferred my balance to numerous different credit cards and was never able to really make a dent in the balance. i was contacted and responded to an offer by the last CC company i had, to make direct payments from my bank account over the period of a year to pay off the debt. ok, now silly me, i know, but i just assumed that after i had handed over my bank account number that things would go as planned. i neglected to look at bank statements very closely, as it would have revealed that the CC company was NOT taking payments from my bank account as agreed upon. the short story: now, i've been sued for the outstanding balance on this card and judgement is for the CC company. they have passed this along to a collection agency. just this week, the collection agency sent me a letter with an offer of "0% settlement" and stated they are willing to accept a settlement of $0.01 on a total balance of over 5k. now i KNOW this is a mistake on their part. it can not possibly be correct. however, if i mail in my payment of a penny, in direct response to their offer, would this stand? for those of you who will tell me that i incurred the debt and it's mine to pay, i understand that and am actually willing to pay much more than the one cent they have asked for. however, my question is: if i respond with payment to their offer (although it may be an error and most probably is), will it stand up in court or anywhere else it needs to?
Best answer: I'm guessing the scam has something to do with the idea that if you pay the 1c you're somehow acknowledging the debt is yours and they are the rightful collectors, and then they'll pursue you relentlessly for the balance.
posted by BlahLaLa at 7:33 PM on May 14, 2012 [12 favorites]
posted by BlahLaLa at 7:33 PM on May 14, 2012 [12 favorites]
Best answer: just this week, the collection agency sent me a letter with an offer of "0% settlement" and stated they are willing to accept a settlement of $0.01 on a total balance of over 5k.
Depending on the type of debt you have, this could be (is almost certainly) an attempt to restart the limitations period for collecting the debt.
Don't send these people shit. Look into resources for protecting yourself from debt collection harassment and get the facts on what you are actually obligated to do.
IANYL, TINLA, etc.
posted by Inspector.Gadget at 7:44 PM on May 14, 2012 [14 favorites]
Depending on the type of debt you have, this could be (is almost certainly) an attempt to restart the limitations period for collecting the debt.
Don't send these people shit. Look into resources for protecting yourself from debt collection harassment and get the facts on what you are actually obligated to do.
IANYL, TINLA, etc.
posted by Inspector.Gadget at 7:44 PM on May 14, 2012 [14 favorites]
Best answer: The statute of limitations differs from state to state, but the clock starts ticking after the last payment on the debt. I'm guessing the debt it out of that time period and they can't sue you to collect on it. If you pay anything towards it though, the clock starts up again, and they can sue you. Google debt re-aging if you want to find more information about the scam.
posted by Garm at 7:47 PM on May 14, 2012 [2 favorites]
posted by Garm at 7:47 PM on May 14, 2012 [2 favorites]
Oh, and since a default judgment has apparently been entered against you (didn't catch that on first read), it would be very worthwhile for you to schedule a flat-rate consultation with an attorney experienced in this area of the law to figure out your options.
posted by Inspector.Gadget at 7:48 PM on May 14, 2012
posted by Inspector.Gadget at 7:48 PM on May 14, 2012
Best answer: I met a collector who loved this scam. They're looking for the name of your bank. Ie, you write them check, bingo, they know where your account is, and with a judgment they will seize every penny you actually owe. The reason they haven't done this yet is they apparently don't know where you bank. This is a well-known collectors' trick.
posted by thelastcamel at 7:52 PM on May 14, 2012 [6 favorites]
posted by thelastcamel at 7:52 PM on May 14, 2012 [6 favorites]
Do some research on debt expiration. I believe the limitations on non-school loan debts is 7 years. But this starts again the moment you submit ANY paymet. So if you're hitting the end of the seven year mark they may be trying to get you to pay up before the debt expires and you can have it stricken from your record.
posted by Anonymous at 8:03 PM on May 14, 2012
posted by Anonymous at 8:03 PM on May 14, 2012
Best answer: The only situation acceptable to is to agree (confirmed in writing by them) that you will pay 10 per cent of what you owe and that they agree (in writing) to remove any negative info from your credit report. They buy these debts for pennies on the dollar, so why should you pay them more.
posted by DudeAsInCool at 9:51 PM on May 14, 2012 [1 favorite]
posted by DudeAsInCool at 9:51 PM on May 14, 2012 [1 favorite]
This lawsuit you speak of, you were properly served? Did you just not show up to a court date you were never notified of or did you go to court and lose?
posted by wierdo at 10:31 PM on May 14, 2012 [1 favorite]
posted by wierdo at 10:31 PM on May 14, 2012 [1 favorite]
One thing you could do is send them a money order for a penny and see what happens. But I'm perverse.
Find out what court entered the judgment, collectors are not above lying. Did you receive information from the credit card company that you were being sued? I, like wierdo, am curious about how you failed to appear at a law suit.
How old is the debt? When was the last time you paid on it? You don't want to make payments on something that is very old because you'll soon be out of the statute of limitations for the collection (as someone said upthread) and you won't owe anything, not only that, it will come off of your credit report.
Before you even speak to these people, get your ducks in a row.
posted by Ruthless Bunny at 5:53 AM on May 15, 2012
Find out what court entered the judgment, collectors are not above lying. Did you receive information from the credit card company that you were being sued? I, like wierdo, am curious about how you failed to appear at a law suit.
How old is the debt? When was the last time you paid on it? You don't want to make payments on something that is very old because you'll soon be out of the statute of limitations for the collection (as someone said upthread) and you won't owe anything, not only that, it will come off of your credit report.
Before you even speak to these people, get your ducks in a row.
posted by Ruthless Bunny at 5:53 AM on May 15, 2012
Response by poster: the law suit is legit. i did get served by the sheriff and did not show to court as i didn't have the resources to pay the debt in it's entirety right then and there. i guess that's not how this works. i figured that i would respond to a settlement from the CC company after the fact. some of us are not well versed in law and i have not had the occasion to become readily familiar with it. i realize that i may have made the wrong choice here 0_o. honestly, i had one of my former landlords served years ago for a deposit dispute, and NOTHING has happened on that front. this was the background for my decision to not show to court, along with the hassle of taking time off work, etc, etc. as far as i can tell, the debt is about 5 years old, so i'm not exactly pushing the statute of limitations on it. i just received another letter from the collections agency stating that their initial offer of $0.01 was indeed a mistake and offered me a 35% reduction on the balance. i didn't realize that the clock starts running after the last payment made, so i'm glad i did not take them up on the 1 cent offer. i think i will do as DudeAsInCool suggests and try to negotiate a 10% offer, which i feel is more than fair considering what they obtained the bad debt for. thanks all, this puts me in a firmer place from which to negotiate and understand my situation.
posted by ps_im_awesome at 3:39 PM on May 16, 2012
posted by ps_im_awesome at 3:39 PM on May 16, 2012
If you have a judgement against you, the statute of limitations does not apply. Be sure to keep enough cash on hand to last you a couple of months and start taking your paycheck as a check. They will eventually find your bank account and garnish, and probably more than they're legally allowed to take.
You may also want to make sure you don't have a warrant out for your arrest. Courts often get upset when people just don't show.
Just in case this happens again, you could probably have gotten a fairly good chunk of the debt forgiven in exchange for a settlement offer before they got the judgment against you. In the case with your landlord, nothing happened because you didn't ask the court to enter a default judgement or issue a warrant for failure to appear. Unfortunately, that's on you when you're representing yourself.
Lastly, if you can afford it (or can get it done pro bono) you need to speak with an attorney. They can look at the record and be sure there aren't any grounds to have the judgement thrown out. (say, if they didn't file the suit before the SOL expired)
posted by wierdo at 6:05 PM on May 16, 2012
You may also want to make sure you don't have a warrant out for your arrest. Courts often get upset when people just don't show.
Just in case this happens again, you could probably have gotten a fairly good chunk of the debt forgiven in exchange for a settlement offer before they got the judgment against you. In the case with your landlord, nothing happened because you didn't ask the court to enter a default judgement or issue a warrant for failure to appear. Unfortunately, that's on you when you're representing yourself.
Lastly, if you can afford it (or can get it done pro bono) you need to speak with an attorney. They can look at the record and be sure there aren't any grounds to have the judgement thrown out. (say, if they didn't file the suit before the SOL expired)
posted by wierdo at 6:05 PM on May 16, 2012
Oh, one other thing. Don't pay them a dime unless and until you have a signed agreement in hand that they are forgiving the remainder of the debt. Their verbal promises are worth less than the paper they're not printed on.
posted by wierdo at 6:17 PM on May 16, 2012
posted by wierdo at 6:17 PM on May 16, 2012
In view of the new information you provide, I reiterate my recommendations above that (1) you consult with an attorney and (2) that you do not contact the collections agency without seeking the advice of said attorney.
The plaintiff which secured the default judgment may well have other ways to collect on the judgmen in your jurisdiction, including asset seizure or garnishing your wages.
posted by Inspector.Gadget at 11:54 AM on May 19, 2012
The plaintiff which secured the default judgment may well have other ways to collect on the judgmen in your jurisdiction, including asset seizure or garnishing your wages.
posted by Inspector.Gadget at 11:54 AM on May 19, 2012
This thread is closed to new comments.
posted by kavasa at 7:31 PM on May 14, 2012