Thanks Nascar, well that will be a bummer for me as I have a pretty astronomical cc debt to settle over the next few years. By the way, what does TL stand for? I know CA is collection agency and isn't JDB junk debt buyer?
Thanks!

[markofkane]

TL=Tax Lien, but I can be wrong.

[NASCAR_Devil]

TL=trade line

[markofkane]

oops, sorry, I WAS wrong!! (insert embarrassed smiley here)

[DOLLARSandSINCE]

When you settle your debt you need to account for that 1099. I would offer no more than 80% of the original balance after subtracting off all the junk fees they tag you with but I would shoot for 50% of the original balance. For example, if you were loaned 5k and the balance after charge off was 8k then I would try to settle for no more than 4k which is 80% of the original balance. You would be taxed via a 1099 on 8k-4k which would be roughly .15% x 4k= $600. Your final cost would actually be $4600 out of 5000 received. The credit card company would save 20% of the loss on their taxes which means they would save .2 x 4k = $800. This means they actually received $4800 on a 5k loan. The IRS makes $600.

This math is why you see offers all the time of 80% of the final inflated value which is a royal rip off for the consumer. They often make offers of 80% of that 8k which would be $6400. This means the Credit Card Company is already profiting by 6400-5000 or $1400 dollars and doesn't even count the 20% right off on the ficticious loss they will claim of $1600. To make matters worse the consumer will be 1099'd for an additional .15% of that $1600.

Note: I use a tax rate of .15% but it could vary depending on an individuals tax bracket.

One of my favorite things to do is whip this math out on a collector when they make me some bogus offer over the phone. Then they will start arguing with me and I start making fun of their math skills. I tell them its simple math but if they don't understand I will start with the basics. 1+1 = 2. I usually get them pissed off then they hang up. hehe.

[NASCAR_Devil]

You ought to record that and post it on-line. That would be classic!

[DOLLARSandSINCE]

That is a pretty good idea (hehe). I just bought a device that lets me run a line into a recorder via a mic jack from a phone and also lets me reverse and run out of recorder via the ear phone jack back to the phone. I am going to purchase a tape recorder soon and start recording for evidence. If I get a good snip I will try to post it somewhere. It will probably take a while because I seldom get phone calls due to the CD I sent off.

In 2005 I was put in Arbitration and a stay was granted. Now a junk debt collector is suing me. What should I do? I am going to court since the debt was charged off by the original creditor and ceded to Chase. Now the junk debt buyers have it.

omg im so glad i found this! hope you can offer some advice.

for whatever reason, like the others seeking advice, i fell behind and had all together stopped paying one of my credit cards. i was young, and so on...anywho, my husband and i are trying to settle up all our accounts and rebuild our credit. so when we were contacted by a debt collector on this account i mentioned, we thought, "ok great, another to work with, hope we can work it out so we can afford to start paying it off." in all honesty, i was glad and rdy to settle it. they said they'd settle for X amount, they wanted a big hunk up front,. i told them i coulndt afford to. they basicly bullied me down to agreeing to pay 300 up front, even tho in my head i knew i couldnt afford to. so gave her my bank acct number and what not to have it taken out. fine, done, rdy to start dealing with that one now. a few days maybe a week goes by, we get the letter saying (this will be direct from the letter)

"this letter is to remind you of payment or draft to be posted to your above mentioned account. your payment will be posted on the regularly scheduled date. please call withing 48hours if there are any changes or problems."

well 2 weeks go by, and still the money is in the bank acct. and we are kinda nervous about it. so monday morning we call and the lady we were dealing with says, "ya i tried to contact u that it didnt go through, you gave us the wrong acct number." ok so in trynig to deal with them we decided to just see if we could settle it with the original credit card company ourselves. the collectors, as you know, were aggressive, rude, and i couldnt get a word in edgwise once i told them i didnt want to deal with them or do it anymore. in my head i planned to call the original company. so i called the original company, gave em my info, they looked up and they said they didnt see any kind of note on the account. we were indeed able to set up repayments with them. which we did. well dumb me, i though i'd be nice and tell the collectors that i was jsut going to settle with the company. so here we are now, paying the company, made our first payment to them and everything, BUT the collectors still say they will call until we settle with them. now i dont know if they dont believe me settling with the credit card so they think they have a right to try to collect from me, or they do still have a right? r there some crossed wires? would talking to the credit card company to deal with them help? or are the collectors trying to bully me into paying them even though i don't have to?

[paulmergel]

let the cc company know the CA is still calling.if after that the CA is still calling.file AG,FTC and BBB complaints,because this is a bottomfeeder.

I love how the Author of the post says she was beaten down with having to understand FDCPA yet she couldn't even quote the law. Clueless... I have been defending myself against these scumbags and have won every time.

The FDCPA, while just plain outdated, is actually pretty straightforward and easy to understand for a piece of legislation. I'm not sure why people have so many issues with it.

That being said, I find it highly suspicious that the original poster claims, on the one hand, that doing anything you legally have a right to do in order to protect yourself from illegal activity will only enhance your likelihood of being illegally harassed by these sleazoids, and then, on the other hand, adds the disclaimer that she/he/it isn't saying you shouldn't do what you're legally allowed to do to protect yourself, blahblahblah...

The whole thing sounds like an attempt at intimidation by some bottom feeding, scum sucking, lowlife junk debt collector. The implication is if you act within the law bad things will happen to you, so shut up and pay up or else. The disclaimer seems to be added on just in case someone tracks the original post to one of these thugs and nails them for violating the FDCPA -- which is what making intimidating claims like this is -- a clear, blatant violation of the FDCPA. A debt collector cannot make threats even by implication.

[griff685]

I have recently been contacted by a junk debt collector, attempting to collect a credit card debt from 2004. I lived in VA when I got the card, and during the entire time I used it. I moved to a different state in 2005. The statute of limitations to this type of account is 3 years from last payment or last activity on the account. Does this apply to me? The balance was 503.00 (written off by creditor) They are on me for over $2,000.00

Thanks for your time in response to this inquiry.

[Chrys Henderson]

Hmmm.. I looked up that fair debt collection website where it says the SOL is 3 years. However, no state statute was referenced. So I went here:
"http://law.findlaw.com/state-laws/civil-statute-of-limitations/virginia/"

And the actual code:
"http://law.justia.com/virginia/codes/toc0800100/8.01-246.html"

The SOL for written contracts is 5 years. 3 years is for verbal agreements. At any rate, 2009 is 5 years. What date did it default (SOL are set from Date of Default)?

I am a 55 year old and I was sent a debt buyers summons they are suing for 2,000, in which was from 3 years ago at boa bank and it actually isnt valid, i was paid up when I closed. as soon as the person delivered the suit, I immediately responded back to the courts, and they sent me a receipt and date with the case management conee for sept 8. today i receive in the mail, a judgement from arrow financial, and I do not know what to do. The courts are closed, please i need your advice, thank you so much

I am a 55 year old and I was sent a debt buyers summons they are suing for 2,000, in which was from 3 years ago at boa bank and it actually isnt valid, i was paid up when I closed. as soon as the person delivered the suit, I immediately responded back to the courts, and they sent me a receipt and date with the case management conee for sept 8. today i receive in the mail, a judgement from arrow financial, and I do not know what to do. The courts are closed, please i need your advice, thank you so much