That rarest of all beasts: a debt collector unwilling to take your money
April 5, 2018 8:04 PM Subscribe
I want to pay off a very old student loan, but the account has been closed and shuttled around various collection agencies. I’m hoping you have some advice on how to repay this debt.
I’m ineligible for financial aid until I pay off a Perkins loan in default from 18 years ago. My previous school referred me to a collection agency which then sent me down a rabbit hole of other agencies who bought my debt and gave up on it.
I eventually found the company that owns it, but they are unable to take any payment from me since they closed the account in 2015. They want my old school to “recode” the loan to them and so far my old school hasn’t returned my phone calls or emails asking them to do so.
What recourse is available to me?
Bonus points if your answer doesn’t involve forgery.
I’m ineligible for financial aid until I pay off a Perkins loan in default from 18 years ago. My previous school referred me to a collection agency which then sent me down a rabbit hole of other agencies who bought my debt and gave up on it.
I eventually found the company that owns it, but they are unable to take any payment from me since they closed the account in 2015. They want my old school to “recode” the loan to them and so far my old school hasn’t returned my phone calls or emails asking them to do so.
What recourse is available to me?
Bonus points if your answer doesn’t involve forgery.
Response by poster: many, many thanks cribcage. I do believe they are a debt collector, but the last in a very long line of transferred calls. I asked them if they owned the debt, they said they did.
posted by Homeskillet Freshy Fresh at 9:05 PM on April 5, 2018
posted by Homeskillet Freshy Fresh at 9:05 PM on April 5, 2018
Best answer: Speaking very generally: if a debt collector says, "Yes, we own that debt" and they do not own it, that debt collector might be liable for having violated the FDCPA.
Also, as a general tip: don't waste your time with telephone calls. Nobody remembers who they talked to or what was promised. If you're very lucky, you might get a reputable collection agency that records its calls and whose agents make detailed notes about each conversation—yes, those exist—but it's almost always better to communicate via postal mail. Save a copy of everything you send and receive. That paper trail is how you'll finally get progress. People like the telephone because it's quick, but if you don't get that quick result then it's time to put things in writing.
...and why postal mail and not email? Two reasons. First, emails get lost or ignored. Second, there's extensive case law establishing that if you show you mailed a letter—like, by providing a copy of the letter attached to an affidavit stating, "yes, I mailed this"—then there's a presumption the other party received it. (Usually, within three days.) Postal mail gets taken more seriously.
posted by cribcage at 9:16 PM on April 5, 2018 [6 favorites]
Also, as a general tip: don't waste your time with telephone calls. Nobody remembers who they talked to or what was promised. If you're very lucky, you might get a reputable collection agency that records its calls and whose agents make detailed notes about each conversation—yes, those exist—but it's almost always better to communicate via postal mail. Save a copy of everything you send and receive. That paper trail is how you'll finally get progress. People like the telephone because it's quick, but if you don't get that quick result then it's time to put things in writing.
...and why postal mail and not email? Two reasons. First, emails get lost or ignored. Second, there's extensive case law establishing that if you show you mailed a letter—like, by providing a copy of the letter attached to an affidavit stating, "yes, I mailed this"—then there's a presumption the other party received it. (Usually, within three days.) Postal mail gets taken more seriously.
posted by cribcage at 9:16 PM on April 5, 2018 [6 favorites]
Are you comfortable sharing the name of the company?
posted by praemunire at 9:48 PM on April 5, 2018
posted by praemunire at 9:48 PM on April 5, 2018
Response by poster: General Revenue Corporation
posted by Homeskillet Freshy Fresh at 10:01 PM on April 5, 2018
posted by Homeskillet Freshy Fresh at 10:01 PM on April 5, 2018
Best answer: According to NMLS, General Revenue Corporation is licensed as a debt collector (or collection agency) in several states including Arizona, Connecticut, Idaho, Indiana, Maryland, Massachusetts, North Dakota, Oregon, and Rhode Island.
Without offering you legal advice, I'll tell you that if I spoke to a random stranger who said, "A licensed debt collector told me they own my debt, but I'm not sure they do. They also told me they can't accept my payment, but the debt is causing me problems."—then I'd suggest that person speak with a consumer attorney via NACA or their local bar association. Probably I'd recommend NACA first. (In full disclosure, I'm a member.)
posted by cribcage at 10:16 PM on April 5, 2018 [5 favorites]
Without offering you legal advice, I'll tell you that if I spoke to a random stranger who said, "A licensed debt collector told me they own my debt, but I'm not sure they do. They also told me they can't accept my payment, but the debt is causing me problems."—then I'd suggest that person speak with a consumer attorney via NACA or their local bar association. Probably I'd recommend NACA first. (In full disclosure, I'm a member.)
posted by cribcage at 10:16 PM on April 5, 2018 [5 favorites]
Response by poster: NACA shows there’s an attorney I can speak to here in Iowa. If I were to speak to them I’d likely use the talking point you mentioned above.
posted by Homeskillet Freshy Fresh at 10:19 PM on April 5, 2018 [1 favorite]
posted by Homeskillet Freshy Fresh at 10:19 PM on April 5, 2018 [1 favorite]
Response by poster: Cribcage, unfortunately the five attorneys I’ve contacted here aren’t taking my case.
posted by Homeskillet Freshy Fresh at 2:54 PM on May 2, 2018
posted by Homeskillet Freshy Fresh at 2:54 PM on May 2, 2018
Best answer: I'm sorry to hear that you're having difficulty getting help. If you were able to chat with any of those attorneys enough to get a sense of what they saw as the problem(s), that insight might give you some idea of how to approach things moving forward. If NACA wasn't helpful, you might try a more local bar association.
I'm not in a position to give you legal advice. I'm not licensed to practice law in Iowa, nor do I know anything about Iowa law. I also don't know enough about your particular circumstance. But with that said, and given the nature of this forum and the fact that you're having trouble finding legal help, I think I can safely discuss one possibility that I'd consider if I found myself in a similar situation. This is purely for information's sake. I can't say how much of this might be useful to you—but maybe you can think it over and get a better idea of how you might proceed.
I'd begin by requesting at least one of my credit reports—Equifax, TransUnion, or Experian. From that, hopefully I'd be able to identify the debt's current owner. I like to have specific information. I don't like guessing or relying on others' info. After getting the report(s), I would probably follow up by notifying each of those three credit-reporting agencies that I dispute this debt.
My next step would depend on what those reports said. But maybe I'd write to the debt's current owner and the debt collector (General Revenue Corp) both. I'd explain that I had spoken with a debt collector who owned the debt, that I didn't believe that debt collector actually did own the debt, and that I wanted to pay the debt—assuming I did—but was being prevented from doing so. I would state that this violated both state and federal law.
There's a trick here that unfortunately I can't help with: sometimes you need to identify the particular law. Usually this isn't the case. Neither the FDCPA nor the FCRA require you to notify a company before suing, "Hey, you violated section-whatever, pay up!" But some laws do. In Massachusetts, for instance, the most relevant law to a situation like this is our state's consumer protection act, which requires that you send a letter at least thirty days before suing, and your letter must explicitly reference the act. This matters even if you don't plan to sue, because the whole point of your letter is to get taken seriously—and if they see a reason to ignore your letter (like omitting a required component), then they might. "This dude doesn't know what he's doing, so we don't have to worry."
My letter would include two other components. First, I'd demand something. Maybe I'd demand that someone contact me within two weeks to tell me exactly how much I allegedly owe and to whom. Maybe I'd demand something different, if I wanted something else. Second, I'd give them a fixed time frame for reply. Regardless of whether they're going to deliver what I've demanded, I'd say, "Please reply by [DATE]." I wouldn't give more than thirty days.
I'd print the letter, sign it, scan a copy for my records, and send it via certified mail to both the debt's current owner and the debt collector. I'd scan a copy of the receipts, and I'd save a copy of the tracking once each letter had been delivered. Then I'd see what happened.
Again, this is just what I might do personally—not necessarily what I'd advise a client to do—in a situation matching the broad strokes you've painted here. There's a lot about your situation I don't know, including basic facts like the amount of money involved. (I'm not asking.) Hopefully this can help you get a better sense of what some of your options might be.
posted by cribcage at 7:22 AM on May 8, 2018
I'm not in a position to give you legal advice. I'm not licensed to practice law in Iowa, nor do I know anything about Iowa law. I also don't know enough about your particular circumstance. But with that said, and given the nature of this forum and the fact that you're having trouble finding legal help, I think I can safely discuss one possibility that I'd consider if I found myself in a similar situation. This is purely for information's sake. I can't say how much of this might be useful to you—but maybe you can think it over and get a better idea of how you might proceed.
I'd begin by requesting at least one of my credit reports—Equifax, TransUnion, or Experian. From that, hopefully I'd be able to identify the debt's current owner. I like to have specific information. I don't like guessing or relying on others' info. After getting the report(s), I would probably follow up by notifying each of those three credit-reporting agencies that I dispute this debt.
My next step would depend on what those reports said. But maybe I'd write to the debt's current owner and the debt collector (General Revenue Corp) both. I'd explain that I had spoken with a debt collector who owned the debt, that I didn't believe that debt collector actually did own the debt, and that I wanted to pay the debt—assuming I did—but was being prevented from doing so. I would state that this violated both state and federal law.
There's a trick here that unfortunately I can't help with: sometimes you need to identify the particular law. Usually this isn't the case. Neither the FDCPA nor the FCRA require you to notify a company before suing, "Hey, you violated section-whatever, pay up!" But some laws do. In Massachusetts, for instance, the most relevant law to a situation like this is our state's consumer protection act, which requires that you send a letter at least thirty days before suing, and your letter must explicitly reference the act. This matters even if you don't plan to sue, because the whole point of your letter is to get taken seriously—and if they see a reason to ignore your letter (like omitting a required component), then they might. "This dude doesn't know what he's doing, so we don't have to worry."
My letter would include two other components. First, I'd demand something. Maybe I'd demand that someone contact me within two weeks to tell me exactly how much I allegedly owe and to whom. Maybe I'd demand something different, if I wanted something else. Second, I'd give them a fixed time frame for reply. Regardless of whether they're going to deliver what I've demanded, I'd say, "Please reply by [DATE]." I wouldn't give more than thirty days.
I'd print the letter, sign it, scan a copy for my records, and send it via certified mail to both the debt's current owner and the debt collector. I'd scan a copy of the receipts, and I'd save a copy of the tracking once each letter had been delivered. Then I'd see what happened.
Again, this is just what I might do personally—not necessarily what I'd advise a client to do—in a situation matching the broad strokes you've painted here. There's a lot about your situation I don't know, including basic facts like the amount of money involved. (I'm not asking.) Hopefully this can help you get a better sense of what some of your options might be.
posted by cribcage at 7:22 AM on May 8, 2018
Response by poster: thanks for all your help here cribcage. if you’re open to discussing this further at all, my email is in my profile. I understand there are laws in place that might prevent you from doing this though.
posted by Homeskillet Freshy Fresh at 12:01 PM on May 9, 2018
posted by Homeskillet Freshy Fresh at 12:01 PM on May 9, 2018
This thread is closed to new comments.
Unpaid, still-valid accounts get "closed" for a variety of reasons. The shortest explanation is that a live, "open" account requires tending—for instance, an annual Gramm Leach Bliley letter—and it doesn't make economic sense to keep tending accounts that aren't paying. The collection industry is a high-volume, low-margin business. You don't make much from the accounts that do pay, so to be successful you need to be super-diligent about churning through inventory quickly: identifying the best leads, and tossing the rest ASAP.
The other side is that regulatory pressure focuses on whether creditors are harassing at-risk populations, like debtors whose sole income is public assistance. So put yourself in the creditor's shoes: keeping the account "open" costs you money, you're unlikely to collect anything in return, and maybe you'll end up getting smacked with a penalty for your trouble. Obviously, you close it.
But what if the debtor wants to pay? It's common. It's also common for the creditor to respond by saying, "We can't accept your payment. Your account is closed." Remember who you're talking to: these folks are the office equivalent of assembly-line workers. They have to be. That's how the business needs to operate to keep its lights on. They're nice people, but they aren't well-trained or highly paid, and they aren't supported with a vast framework of resources for dealing with outside-the-box situations. "I'd like to pay on a closed account. Where do I send the check?" is a simple question that I've seen, in the case of major national banks, take almost a year to get answered. More than once.
I don't have enough information about your situation to suggest what you should do. But I can offer that in other situations where I've dealt with a debtor who's having difficulty paying a "closed" debt, I've suggested: threaten to sue. This is controversial, and smart people have disagreed with me about this so take my opinion with a grain of salt—but in my opinion, it constitutes an unfair practice under federal law (eg, FDCPA) and/or state law (eg, consumer protection or unfair debt-collection laws) to purchase someone's debt and then refuse to allow them to repay it. Under the right circumstances, I believe a debtor can sue for damages and/or a declaratory judgment finding the debt to be void.
As you can imagine, that's a carrot-and-stick situation that can get quick results: "Figure out how I can pay you, or else you're going to pay me."
Turning to your situation specifically: some of what you're describing doesn't quite add up. When I hear something like, "they want my school to re-code the loan to them," that indicates you might be talking about a debt collector. Debt collectors and creditors are different—one entity might operate as both, but they're different roles and the distinction is important for your purpose. Are you certain you're talking to a company that "owns" the debt? That's an important piece of the puzzle. If you're talking to a debt collector, you're wasting your time. Make sure you're talking directly to the current creditor.
If you have specific questions about the industry or about ideas you might want to discuss with a lawyer in your jurisdiction, I'm happy to follow up. I'm sorry to hear about the inconvenience. You're not alone. Hopefully you get it worked out without too much more hassle.
posted by cribcage at 8:59 PM on April 5, 2018 [16 favorites]