Forum
|
|
Forum
|
     | Wednesday, December 29, 1999 - 07:18 am  Long story here, but it sounds like one that happens a lot. I've got a lot of questions, forgive me if they sound old. At any rate, prior to this chain of events, I had perfect credit, still do (with everything else). Long story made as short as possible, my mother's credit was horrendous, and she needed a car, the car dealer said best deal was to keep her name out of everything and for me to sign my name and be the "owner" of the car. I didn't have a problem with it at the time, figuring my mom would make the payments and it wouldn't be my problem. Well, at any rate, she defaulted and the car was repo'd. The loan balance was approximatley 5,000. The book value of the car at the time was over 9,000. After taking the car, the creditor started a collection proceding for 5,000 dollars. This may sound naive, but how would there be that much owed after they've taken and re-sold a car worth almost twice the money owed to them? Ultimately I got an attorney to get their collectors off my back. The creditor lost all of my corresondence to them including an offer of 10 percent to end the deal. Ultimately, they charged off the debt. They sold it to a collection agency which offered 50 percent settlement. When I refused their 30 days and one payment of 3000 dollars offer, I never heard from them again. A month later, another collection agency sent me a letter asking for the full original amount. I referred them to my attorney and have heard nothing to date from them (this was 3 months ago). I pulled my report from equifax and it indicates the initial creditor's debt (with slow payment and a chargeoff) and the current debt collector's ownership of the same debt. Though there's no indication of the first debt collector's activity. I was told by my brother (a Car Salesman, go figure) - that my current beacon score is 610, without these two entries, it'd be 700. My questions are as follows: 1) If the bank sold the car at such a loss, why am I responsible for their mistake? They took property from me that's worth twice the value of the loan. Wouldn't that settle it? 2) Can the same debt be reported both by the original creditor and the collection agency? 3) Who should I be dealing with to negotiate this? The original creditor or the current debt collector 4) What's a reasonable amount to settle this? The debt is approximately 5,000 plus the interest that they keep accumulating. The original creditor did call back after my 10 percent offer finally got through their mail room. However this is after the debt had already been charged off and was being handled by another collector. But one voice mail left with my attorney was all I heard from them. 5) Will they keep adding a negative collection account each time the debt changes hands? or do they just replace one with another? 6) Though they've all threatened garnishment, a lawsuit, a judgement, etc - no one's filed suit of any kind. But then, no collection agency has been based in my state. In anyone's experience, will they bring suit? and If they do, will my attorney have any grounds to challenge any of the debt? I feel they've already taken more than what was owed them, but don't know if it'll work that way in court. My goal is to get this resolved. At the same time, I can't see giving them even half of what they're asking after what they've taken. If they sold the car at a loss, that's just bad business to go after me for it. Any advice would be appreciated. Thanks in Advance.
|
| | Wednesday, December 29, 1999 - 09:48 am First question: if you have an attorney, why not ask him/her? Next: what's a beacon score? Next: if they repo'd the car and sold it, they have to notify you of the amount it was sold for, leaving an unpaid balance of...Next: the current debt collector is the legal owner of the "note". Next: you can't have "duplicate entries" on your credit report for the same debt, just dispute them with the credit reporting agency as duplicate entries. I would not settle this until they tell you what they sold the car for. How old is the debt? There is a statue of limitations. Will they file suit? It probably depends on your credit report, because it will tell them how much you make, and whether or not you would file bankruptcy if they sued you. I doubt if any attorney would take on a civil litigation case for less than $3000.00 up front, so is the collection agency willing to put up the money? No. From what I can find out, collection agencies "buy" your paper for about 2 cents on the dollar, so they bought your note for about a hundred bucks, and if they collect two hundred, they doubled their money. Negotiate. Remember this, if they file a suit, they have to specifically state a claim, such as "Plaintiff (you) co-signed on a note, defaulted, auto was sold for..., the balance is..." "Prayer for Relief" will be the amount of money they seek to obtain from you. They cannot simply state in the suit (Complaint) that you didn't pay the $5000.00, they sold the car, and now you still owe them $5000.00.
|
| | Wednesday, December 29, 1999 - 10:31 am Heh. Ok, a Beacon Score is the risk score put out by Fair Isaac in conjunction with Equifax. Secondly, I think the first thing you need to do is find out how much the repossessed car was sold for. It's nonsense that you owed $5,000 and they repo'd it and you still owed $5,000. Third you need to figure out who owns your debt. If it was sold to the first collection agency and they resold it then the second collection agency is the one to deal with. But sometimes collection agencies work on a percentage basis, where they get 30-40% of whatever they succeed in collecting. A 50 percent settlement sounds about right. I sure don't think they'll accept 10 percent. I hope you'll be much more cautious about how you handle co-signing in the future and I hope you're not mad at your mom.
|
| | Wednesday, December 29, 1999 - 05:22 pm Eric L: How do you know your score would be 700?
|
| | Thursday, December 30, 1999 - 03:10 am Eric, Here are some answers to your orginal questions: >>1) If the bank sold the car at such a loss, why am I responsible for their mistake? They took property from me that's worth twice the value of the loan. Wouldn't that settle it? No, you are repsonsible for the whole debt. If the car sells for less than you owe, you still owe the original amount >>2) Can the same debt be reported both by the original creditor and the collection agency? Apparently, yes. >>3) Who should I be dealing with to negotiate this? The original creditor or the current debt collector. Typically, you want to negotiate with the collection agency, most likely they are the legal owners of the debt (they purchased the debt form the original creditor). You may try giving the original creditor a try, however. If they deal with you, then they haven't sold the debt, they are only using the collection agency as a "bounty hunter." >>4) What's a reasonable amount to settle this? The debt is approximately 5,000 plus the interest that they keep accumulating. Whatever you can get them to take is reasonable. I'd offer them whatever you can really afford to pay. The more you imply this may be their last chance to get ANYTHING from you, the less they may be willing to take. Be aware, however, that legally, they don't have to deal with you. But most likely, they will. >>5) Will they keep adding a negative collection account each time the debt changes hands? or do they just replace one with another? They may try to do this. You may be able to challenge the credit bureaus with "duplicate accounts" to see if you can get only the most current one one there. Also, if the debt changes hands, it's likely that old collection agencies will purge their records of you, making it impossible for the bureaus to verify - and hence take it off your report. >>6) Though they've all threatened garnishment, a lawsuit, a judgement, etc - no one's filed suit of any kind. But then, no collection agency has been based in my state. In anyone's experience, will they bring suit? and If they do, will my attorney have any grounds to challenge any of the debt? If they don't feel they can collect the debt from you without incurring more significant losses, they will not bother. Your attorney will not be able to challenge any of the debt unless they have charged excessive interest (interest a collection agency can charge is regulated in each state.) How long has it been? Have the statute of limitations run out? (You can check this here: http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml.) Good luck! Kristy Welsh
|
| | Thursday, December 30, 1999 - 03:14 am I agree with Sean - you cannot assume that the debt collector is the legal owner of the note. The debt collector can be an agent of another creditor, empowered to act for them in collection matters. Or the debt collector can be the assignee of the debt, where they purchased (at a discount) the original creditors rights to collect that debt. I recommend that you ask your attorney to check the Uniform Commercial Code. I forget the exact statute, but there is a provision therein which states that a repo sale must be "commercially resonable". If it is not, then a presumption arises that the value of the vehicle was exactly equal to the amount owed, such that there would be no deficiency. It is a rebuttable presumption, but at least it would place the burden upon the creditor and put them on the defensive for a change. I am not sure about the statement that the credit report cannot list both the creditor and the collection agency. Does that really qualify as an impermissible "duplicate entry"? Anyone? I have no personal knowledge, but I was under the impression that this (at least) was allowed.
|
| | Thursday, December 30, 1999 - 03:36 am It has been my experience that credit reporting agencies will delete duplicate accounts. Perhaps this is not mandated by law, but nevertheless they still do delete them.
|
| | Thursday, December 30, 1999 - 05:24 am Yes, apparently they can have duplicate listings. The FCRA (I have been through this with a fine toothed comb) doesn't forbid this. Phone calls to all three agencies have agreed with this.
|
Credit Forum CreditCourt Forum 2003 Credit Suit CreditFactors Order Credit Reports |