I need helping know how to deal with this debt collector letter.

May 27, 2014 7:31 AM

I recently received a letter from Pioneer Credit Recovery, informing me that my debt of ~$1500 in state taxes has been assigned to them. There are some details that make me unsure how to respond.

A relevant excerpt from the letter:

"Connect Pioneer Credit Recovery Inc. by 6/11/2014. If you are financially unable to pay the full amount of the liability all at once, you may qualify for an installment payment agreement. Contact Pioneer Credit Recovery Inc. to arrange for repayment of your account, or additional steps may be taken to collect this debt."

I intend to pay back this debt as soon as I can. That's not something I can do in the next two weeks, though I could do it over the next two or three months. I don't want to be sued, or have wages garnished.

So why not just call? Because I have vague recollections of being told to do everything in writing in such cases - maybe it's just this old Eugene Mirman bit about being hounded by a debt agency (starts at 29:28) where he mentions not getting his agreement in writing and getting hammered by it. But sending back a formal letter admitting I can't pay it back just yet, and requesting a different plan? Not only am I not entirely sure how to do that, I'm also not 100% sure I'll be at home to receive the return letter in the next few weeks. (Long story.)

The state is New York, in case that matters. Any private questions or thoughts can be sent to [e-mail]. Thank you so much for helping out with something where I feel paralyzing shame and anxiety that leaves me unsure where to turn.

posted by anonymous to Law & Government (19 answers total)

I went through a huge financial crash about 7-8 years ago, and got sued by every creditor under the sun. The thing I found out is that the suits were FAR more pleasant and reasonable, with a judge presiding, than the debt collection companies ever were. Basically, you go into a courthouse, tell the judge that you can repay by $x amount every month, sign something saying that you will do so, and it's over.

(This is in Massachusetts, but honestly...the threat of OMG COURT makes people totally riled up, and court is the one place where those jerks had to be polite to me, and once I realized that, I stopped paying attention to all the threats they threw my way on their own.)
posted by xingcat at 7:43 AM on May 27, 2014

I'm thinking that this may be a hoax. The State of NY has a fairly large apparatus for coming after you if you haven't paid your taxes. I don't think that they're supposed to engage a private collections agency to do it for them.

Try contacting the NYS Department of Taxation and Finance before you do anything else. You might also want to have a competent lawyer handy. You can ask them about your current status, and how to pay off your balance - they'll be happy to tell you. Don't communicate at all with this collections agency until and unless the State themselves tells you that they gave your account over to this private collector.
posted by Citrus at 7:44 AM on May 27, 2014 [13 favorites]

scody's debt collection letter. Start there.

I've been in a fuckload more trouble than $1500 and made it worse for years with the shame and anxiety thing. You need to reframe this as a business transaction, one that you will deal with - but not on their terms - as you are able. It's just money, it's not a character judgement. There is no emotion attached to this money - which is a drop in the bucket - by the state or the collection company.
posted by Lyn Never at 7:46 AM on May 27, 2014 [8 favorites]

Oh, after you send the letter to put the properly machinery in motion, you should then contact the state directly to ask if they will settle the debt or offer a payment plan directly. Maybe they've literally sold this debt to the collection agency, in which case they probably can't, they've already written off the loss. But if they just contract this place to do collections then they may be able to work with you directly.
posted by Lyn Never at 7:48 AM on May 27, 2014

If its a legitimate effort on behalf of a state for unpaid taxes then the provisions of the Fair Debt Collection Practices Act don't apply since its not a consumer debt. (Scody's letter would be inappropriate in that case.)
posted by dcjd at 7:56 AM on May 27, 2014

Ah, good point, except when it's a third party I think it gets middle-groundy. In any case, you can tweak that template to request documentation details in writing, which even if you know it's your debt is good to do as due diligence. If it looks a lot like your debt but turns out to have some wrong information, you could end up still in debt in the end.

Also, the "request details in writing" step itself tends to step you up to dealing with an actual person, and you write back with an offer of $X/month for 24 months - because while they'd love to make you think you HAVE to pay in full by 5:00 today, they will take your money however you can give it to them.

Requesting documentation is not a bad way to begin the process.
posted by Lyn Never at 8:02 AM on May 27, 2014

I'm seconding that this might be a scam. I went Googling looking for any evidence that New York State uses private debt collectors, and found nothing. I did, however, find this page which says what the state does in the case of a delinquent tax bill. I see nothing there about assigning to a private collection agency.

Are you 100% sure you owe this money at all? It might be a good idea to call the NYS IRS and ask about the details of your account.
posted by Andrhia at 8:07 AM on May 27, 2014

I'm skeptical that this is legit. I'd follow the advice of Citrus above and call the state directly to confirm.

To your knowledge have you ever been contacted by the state? Does it sound right that you owe them money?
posted by Ruthless Bunny at 8:08 AM on May 27, 2014 [1 favorite]

Yeah, make sure this is legit. My husband had a tax bill canceled a few years back and we still get legitimate-looking but totally scammy letters from debt consolidation companies and the like.
posted by PhoBWanKenobi at 8:10 AM on May 27, 2014 [1 favorite]

I intend to pay back this debt as soon as I can.

This seems to imply that you already knew that you owe back taxes. Is this a correct reading? Have you been contacted previously by the state saying you owed taxes? Or is this collection letter the first you've heard of the supposed debt?

This is an important point. No state is going to hand-over a debt to a collection service without first attempting to contact you multiple times. If this is the first you've heard of this debt, it's a good bet this is a scam.
posted by Thorzdad at 8:26 AM on May 27, 2014 [1 favorite]

Call NYS. I doubt this is legit. Andrhina's page says they only allow third parties for the top 250 personal income tax scofflaws. 1500 bucks aint that.
posted by JPD at 8:30 AM on May 27, 2014

Another vote for probably not legit based on experiences with overdue taxes in Illinois and Wisconsin.
posted by desjardins at 8:40 AM on May 27, 2014

You might try calling your local Legal Aid office or law school clinic. Such organizations may have their own hey-creditor-get-lost letters that they may be willing to send on your behalf. They may also be willing to chat with you for twenty minutes to give you a run-down of the process, even if they don't have the resources to advise you.
posted by Handstand Devil at 9:02 AM on May 27, 2014

Absolutely get in touch with the NY State Dept of Tax and Finance and clarify this situation before giving a third party ANYTHING AT ALL, including any personal information or even just confirmation that you are actually the person living at the address/number at which they contacted you.

I had tax problems with NY State which totaled over 50x the amount of yours, and which was overdue for 4 years, and they still contacted me and other responsible parties directly.

If I were you I would be extremely suspicious about the claims being made.

Also if your tax ID number, aka your SSN, is anywhere on the letter they sent you, you should immediately put an alert/hold on your credit.
posted by elizardbits at 9:08 AM on May 27, 2014 [1 favorite]

Ah, good point, except when it's a third party I think it gets middle-groundy. In any case, you can tweak that template to request documentation details in writing, which even if you know it's your debt is good to do as due diligence.

FDCPA most always hinges on whether it's the initial party to the debt or a third-party collector. If you owe me $5 I can call you and be a pain in the ass in ways that would be a violation if I refer it to another operation. I also don't owe you validation.

Scody's letter is good but from a legal standpoint it's total overkill. The standard is the absolute bare minimum when it comes to requesting validation - you can scrawl PROVE IT on a napkin with a lipstick and you've met your obligation. The only three pivotal things in Scody's letter are that it disputes (which has implications for reporting), it request validation, and it restricts the manner of communication without refusing all communication (which you can do, but that means they'd just have to go straight to suing you).

Scody spells out some things that prevent you from having a back-and-forth about inappropriate validation (shitty collectors are notorious for sending back a printout of a line item from some crap they bought that just has your name and a dollar figure, which is not legally sufficient) but you can always respond to that. If this is legitimate debt and you're trying to just keep the plates spinning till you have a better handle on things then that would almost be better, no?

Send back a letter that says you're uncertain this is yours since you don't recognize the specifics and you want to see some validation. Add that you would like all communication in writing because it's not convenient to speak on the phone. That's it - you can copy the above and switch the pronouns and it's enough.

The only thing you must do it send it certified with a return receipt so they can't throw it in the trash and claim they never got it.
posted by phearlez at 9:15 AM on May 27, 2014 [2 favorites]

To settle the question of whether this is legit, you certainly can check with the state, but this is not a scam.

Pioneer Credit Recovery specializes in the collection of debts owed to government entities, and is specifically listed on the website of the New York State Dept. of Taxation and Finance as having a contract with them.
posted by beagle at 9:23 AM on May 27, 2014 [1 favorite]

Do you (or could you reasonably) owe money to NYS? If so, then this is likely not a scam. You probably have received a number of notices from NYS about this debt in the past. You can, and should pay the debt directly to NYS.

Deal directly with the state, not the collection agency. The state can help you set up an installment agreement (if available), and can accept payment on your debt. See this PDF for an overview of their potential remedies.

There is no reason to panic about this. Tax debts are very easy to handle, but you have to keep in very regular contact with the tax agency to whom you owe money (in this case NYS Dept of Finance). Look for your last notice you received directly from NYS and call the number on that notice.
posted by melissasaurus at 9:31 AM on May 27, 2014

I can't say whether or not this specific letter is a scam, but I dealt with Pioneer Credit Recovery when paying my own (very old) back taxes in NJ. They're a legit company.

Write down everything when you talk to them - the name of the person you're speaking to, the date, the arrangements you make. In my dealings with them, they had crazy high turnover. Sometimes I had to be a little firm with them in explaining what had already been determined/done. Don't be afraid to stand up for yourself.

I told them how much I could pay, and when, and that was that. In retrospect, I should have done so much, much earlier than I did. You should feel no shame. Just pay them back in increments you can afford.
posted by lyssabee at 10:51 AM on May 27, 2014

I could write a big, long dissertation, but instead, here's a gut reaction:

My hunch is that your best bet is to work out a payment plan. That's assuming that you do owe the money. Spending time on a dispute is unlikely to be a good use of your time (with the disclaimer that there may be aspects of this I'm unaware of). There's even a chance that working with the agency might help forestall more aggressive action by the government further down the road if you do nothing.

And to echo what other people have said, don't let shame or anything be part of the process. Just run the numbers and look out for yourself. Getting it paid and behind you is part of looking out for yourself.

Honestly, two or three months? That would sound great to me, if I were on the other side of the transaction.

(IANAL, IANYL, but I have worked in credit in the past.)
posted by gimonca at 5:48 PM on May 27, 2014