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Tabby

Hi,
I just read on Budd Hibbs' website that he is being flooded with complaints from consumers who are receiving 1099-C's from Portfolio Recovery
Associates:

"Many claim these debts date back into the mid 1990s and are no longer on their credit reports; most are past State statutes for taking legal actions and the majority appear to be far beyond the seven year statute for credit bureau reporting.

"Think about it. PRA cannot legally collect the alleged debt, because the debt is barred by the statute of limitations. Their philosophy seems to be that if the consumer won’t pay PRA, then the consumer should pay someone-and that someone is the IRS-so PRA can reap the benefit of a tax deduction? The question seems to be whether *Creative accounting allows that PRA can deduct the amount of the debt as shown on the 1099-C, and not the pennies on the dollar that they actually paid for the worthless debt."

This was a timely report, as my brother-in-law just received a 1099-C from PRA this week on an old debt which he sucessfully disputed two years ago. Just wondering if anyone else out there has received one, too, and what your thoughts are on this latest scam.

Thanks!

Posted: Sat Feb 09, 2008 10:41 am Subject:

Wow! Thats a new low, even for the bottom feeders! I would think that is a violation, since the debt is unvalidated, but I haven't the foggiest on how you would go about handling this.

I guess the first thing I would do is contact the IRS and tell them the situation, that it is an unvalidated debt, that PRA chose to do this because they could not validate.

This might be a good one for a lawyer...wow I really don't know how I would handle that if I got one!

Tabby

Yeah. I also read where Asset Acceptance is doing the same thing. Evil or Very Mad

Posted: Sat Feb 09, 2008 11:46 am Subject:

I would think that you could sue PRA over it, especially if they were DVed in the past and couldn't prove the claim. This smacks of flagrantly ignoring the law and just looking for another way to collect on a bogus debt.

If they were never DVed, I would do it, mentioning that filing a 1099-C on an unproven debt could be defrauding the IRS. Actually, that should be researched! I would think it is defrauding the IRS as well as the consumer, I mean come on, they are basically saying, "Well I say this person owes me. No, I have no proof but will get paid anyway so file with the IRS." But I am sure that someone on the form they file they have to sign under perjury that it is true and correct, but it ISN"T true and correct if the debt is not validated! I would pursue this line aggressively...get the company in trouble with the IRS.....believe me, if that is the case the company has much bigger troubles then dealing with lawsuits from consumers. Smile

Tabby

Yea, I was thinking the same thing. He sent the DV back in September 2006 and never heard back from PRA...until he got the 1099-C in the mail this week.
Looks to me like they are still trying to collect on it..even if it is in the form of a payback from the IRS.

DAMN their souls. If the IRS doesn't get them, somebody else will!

Tabby

OOPS...sorry for the double post! Embarassed

The duplicate post has been removed - Jason

Posted: Sat Feb 09, 2008 7:10 pm Subject:

Get ahold of the Infernal Revenue Sadists, post haste. Tell them about it, and see what they say. If the answers are not to your liking, contact the Office of the Taxpayer Advocate [within the IRS] for assistance. You may also benefit from spending some quality time with a tax professional [not the guy at the local HR Block!]

Posted: Sun Feb 10, 2008 6:26 am Subject:

Seeing as how the debt is so old, and chances are the OC already filed the 1099c, I'm thinking tax fraud/evasion.

Posted: Sun Feb 10, 2008 2:54 pm Subject:

Ignore the inane ramblings of Nonsense Collector, he is the cheat, not you.

Posted: Sun Feb 10, 2008 2:55 pm Subject:

And do what JCEMT said, you should contact the OC and ask them about when it was charged off and if they filed a 1099-c themselves...if you get THAT proof...then PRA is in a whole world of hurt!

Posted: Sun Feb 10, 2008 2:58 pm Subject:

Tomorrow I'll call my local IRS office tomorrow and check. Just to find out myself it is proper. That would be the perfect place to ask as they are the experts.

No Nonsense Collector · Posted: Sun Feb 10, 2008 3:01 pm Subject:

I ARE TROLL- UGH!!

Posted: Sun Feb 10, 2008 3:24 pm Subject:

Please don't feed the troll......he's just trying to get a reaction from us.

Posted: Sun Feb 10, 2008 9:35 pm Subject:

Hate to tell you this but it is legal to collect on debts that are past the SoL, legal action can not be taken against you when a debt is past the SoL of your residential state.

Good luck in getting this resolved. It's going to be a funky thing if this is to become a trend for very old collection accounts.

Posted: Sun Feb 10, 2008 10:23 pm Subject:

True FYI but a C&D if past SOL will pretty much stop them trying to collect. Can't get a judgment and can't contact, that pretty much makes it a debt that cannot be collected.

The 1099 thing is bound to get interesting, I know it's legal but I wonder how it works if someone requested validation but did not receive it.

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