Houston Funding II - Collection Agency

Hi,

This collection company purchased a 4-year-old charged-off cc debt of mine in the amount of $3362. I didn't dispute the debt, or ask for validation when I got the first letter from them in May. A few days ago, they sent me a second letter saying they are assigning my account to an investigator in my area since I haven't cooperated with them. The debt was accumulated in Georgia where the SoL is 4 years and now I live in Minnesota and the SoL is 6 years. They offered to settle for half the amount in the first letter and I'm aware of the IRS consequences of doing that. They belong to the Houston BBB with resolved complaints.

Should I write them (registered) and still ask them to validate the debt anyway? I know for sure it's mine; or negotiate monthly payments with them in writing? I managed to pay-off $12,000 in mostly charged-off cc's through a dmp Program and this is the only unpaid debt I have left and morally, I believe I should start making payments on it because I am in a financial position now to do so. Thanks for the help!

Be aware that if you settle a debt and it is your first time to settle that you can suffer a massive credit score penalty for doing it. However if you have already settled then go ahead because it won't hurt your score at all.

As for the SOL, i think it depends on what state you made your last payment but I could be wrong.

I believe the last payment I made was in late 2002 right after I moved back to Virginia from Atlanta, GA. The original creditor was Providian,which I know they have been sued in a class action for excessive fees. The SoL in Virginia is 3 years, however I still want to start making payments to get rid of it.

As for settling this debt, it would be the first time I've settled anything. I know it's better to have PAID or PAID IN FULL on my credit report and if my score takes a hit, that's ok with me at this point in time. I bought a townhouse a year ago with this debt and other charge-offs listed on my reports, my payment history on the credit cards I do have now is impeccable, along with my mortgage payments of course, and I outright own my car and the only debt I'm taking on right now are small student loans at my community college, so if my score (620) takes a hit, I can deal with it. I managed to buy my home with a score of 593 with an 80/20 mortgage with interest rates of 5.625% (80) and 9.4% (20) both fixed. I just want to own up to any past debt I owe so I won't come back to haunt me when I'm 65.

Erik, you need to be careful with your moves. The SOL of that state is taken into consideration where the account was originally opened. If this account was opened in Virginia and the last payment done was in 2002, this debt is past the SOL period. If you make any payment now, the SOL will be renewed from the beginning. You can be forced to pay off the debt in legal terms. Expiry of the SOL does not erase the debt in anyway. If you are still willing to pay off the account, it is a good decision. There will be a slight improvement in your credit scores as the account has already been in collections tarnishing your credit scores.

Whatever may be your decision, if you are thinking of paying the debt, don't linger your payments. Pay it in one time and get the account update in your credit report.

Your credit score can take up to 150 point hit on first SIF. If it is possible for you to BIF the acct or make arrangements to do so then of course I would suggest that. But if you feel comfortable to SIF it then by all means do so as it is most likely that the current balance now is arife wi th late fee's and intrest that applied before it charged off.

3 years ago my mom got a letter from a collection agency on a 10,000 credit card debt. Unlike the majority of people who have things in collections she disputed it. She asked the "assigned" (agency who bought the debt) to show proof that they had bought the debt and how much the bought it for, how much interest and fees they were charging, what the cash difference was between what she actually owen and what they were asking, and for a copy of the original credit card contract. They weren't prepared in the courts and had none of this imformation, the only thing they had were 3 copies of checks she had written to the credit card company. She said she had never heard of this agency collection her debt before and that the checks were written to a credit card company not to them specifically. Because they couldn't provide any of this imformation she won the case, and it was removed off of her credit report. ALWAYS dispute and ask question. they could be charging 1000 interest on a 2000 debt and want you to "settle" for 4000... always get a complete payment history and a copy of your contract. Another loophole is who is responsible for debt after it is "assigned" some contracts say " Debtor agrees to be responsible for payment of this debt to creditor or its assigned"
if it doesn't say that, you're off the hook.
It's the little things that will help you out.