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Posted: Sun Jan 28, 2007 4:06 pm Subject: Dealing with Debt Collectors

Well after taking a long hard look at my DH credit report we've decided to start paying off all his past debts. As he is set to deploy soon I have been given the task of doing all the administrative work I'm at a loss as to where to start. Some of his old accounts have been charged off and handed over to companies such as Asset Acceptance. Now my problem is I cannot seem to find matching amounts on the credit report, meaning debts that match the exact amount of the charged off card. I'm wondering if these debts being collected are valid debts at all. I don't know how to go about finding out if these debts are valid, and if so how do we go about negotiating with the debt collectors? We just want to clear his credit and start working on rebuilding it asap. If anyone has any ideas, sample letters or just general advice I'd greatly appreciate it. Thanks!!!

Posted: Sun Jan 28, 2007 5:14 pm Subject:

The first thing you need to do is ask each collector to validate the debt, which means to ask them to provide you with documentation as to who the original creditor was, what the amount owed is, and so on. Send your letter to the collection agency by Certified Mail, with a Return Receipt Requested, so you have documentation proving that you made the request.

Collection agencies will frequently fail, for whatever reason, to provide you with that documentation, which is fine, because if they don't, they're legally prohibited from collecting the debt. On the other hand, if they *do* validate, you'll obviously be better informed about the debt and be able to make a better decision about how to proceed for that reason.

Debt validation typically takes several months when it happens at all, so in the interim, while you're waiting for validation, you might want to think about other things you need to handle, like drawing up a budget and disciplining yourself to stick to it.

Posted: Sun Jan 28, 2007 5:41 pm Subject:

Thank you

Well the thing is we have a sum of money right now that we'd like to pay off the debts before DH leaves for the sandbox. I'm guessing faxing or calling the collectors wouldn't speed up the process?

Posted: Sun Jan 28, 2007 6:32 pm Subject:

No. For one thing, the agencies don't *want* to validate the debt because it's such a hassle, so if you fax or call them, they'll just start pressuring you to pay immediately. Also, once you've asked them to validate, they *can't* collect the debt until they've validated -- it's illegal.

Asking for validation benefits you. Either they won't validate, in which case they can't collect the debt, or they'll validate and you'll be able to get your accounts straightened out. Another benefit of asking for validation, as I said, is that it takes a few months, during which time you can start thinking about other things. For example, you need to be aware that paying off older bad debts can actually harm your credit rating and start figuring out ways to pay off the debt safely.

Posted: Sun Jan 28, 2007 6:45 pm Subject:

Ok thanks a million, I just took a look at our CR and I've noticed that there are only two collection agencies, the other two are charged off cards which have not yet been "sold" so we'll contact the creditors directly on those. I really appreciate your help, and plan on getting those letters off in the mail tomorrow Smile

Posted: Sun Jan 28, 2007 6:54 pm Subject:

I hope everything goes well. Working with the original creditor is usually better, by the way... working with a collection agency can be problematic because so many of them are so shady.

Please keep us informed... it sounds like your troubles are actually pretty minor compared to those that a lot of us have, so take heart -- it's probably not going to take much work on your part to get everything straightened out. Good luck. Smile

Posted: Sun Jan 28, 2007 7:51 pm Subject:

kelly? You do qualify under the servicemans debt relief act by the way

Posted: Sun Jan 28, 2007 8:20 pm Subject:

What exactly does the "servicemans debt relief act" allow?

Posted: Mon Jan 29, 2007 4:43 am Subject:

The best info I could get fast for y'all kelly. Link here: http://www.military.com/NewContent/0,13190,Deployment_Active_Legal,00. html

Posted: Mon Jan 29, 2007 8:43 am Subject:

Thank you, I really appreciate the advice!

Posted: Mon Jan 29, 2007 11:50 am Subject:

Whether you live on base or not, get in touch with them ASAP! Good luck, stay in touch & holler if you need outside help. Also pass that around to the other members of your unit, ect. Get the word out!

Posted: Wed Jan 31, 2007 5:24 am Subject:

They can collect on debt even if your request for validation. What they aren't supposed to do is collect on it before the first letter has been sent, and if it has been sent to an old address and not your current one as long as their system says it has been sent then they can collect.

Collection sgencies, most of them only report once or twice a year unless you are trying to dispute it by credit report then they will report again to counter your dispute. Credit Cards gain intrest even when charged off but it is a yearly intrest rate not a monthly.

The account numbers might not match to the CBR's because you are assigned a new account number usualy when you are placed in collections and they may or may not have the credit card number. It does depend on if the creditor allows them to have it or not. The creditor my company works with does not allow us to have the full CC#.

Also, since military members aren't supposed to be in debt I wouldn't go passing around number or web sites because you don't want that information to happen upon to a suerior officer who has it out for your spouse because that creates a whole new set of issues unless you are specificaly asked by someone.

Posted: Wed Jan 31, 2007 7:04 am Subject:

I didn't think they were allowed to collect the debt if you did send a dv letter, especially if you are disputing the amount. That is what the FTC told me.