So I'm 90 days past due and I get a call from a local law firm.

Something doesn't seem right about this law firm being on the case when you are only 90-120 days out. The general rule of thumb is they may try 3 different collection agency's before finally pressing suit. Are you sure you do not have any other debts from years passed that the lawyer could be working on? Have you pulled your credit report(s) and I stress REPORTS as Experian was nice enough to merge my credit score with another person and I still receive collection calls for him.

That's because Experian is very anxious to be sued and they're playing triple dog dare because so very few people have the courage to go against a CRA. You're not the only one, you should sue them.
"http://articles.latimes.com/2009/may/01/business/fi-experian-privacy1"

Some creditors do sue right away, it depends on who has your account. H&H seem to work with NCO, and NCO sues at the drop of a hat.

The problem with threatening bankruptcy is that it could expedite a lawsuit by some creditors rather than serving as a deterrent. But at any rate, wait for the dunning letter to come in the mail before you call or talk to any collection agency.

Also, you don't want to let any of your creditors to even think that you have a bunch of money lying around for settlements because that also may trigger them to expedite collection proceedings, so be very careful how you word that.

There are a lot of unofficial (and hence a waste of time) "complaints" against H&H, but hardly anyone has sued them for FDCPA violations. NCO on the other hand, bad bad bad... One of America's worst, according to Bud Hibbs:
"http://www.budhibbs.com/collectorpages/nco_financial_systems.htm"

Thanks for the reply. I realize that I must be careful here. The idea was to tell them that due to a potential lawsuit, I might possibly be able to get a loan from a family member. I don't have the money yet. Nor can I guarantee I will get any. (wink)

Can anyone give advice as to how I should handle this?

Mcstiggs

At any rate, they should have sent you a dunning letter in the mail. No letter? Don't even talk to them except to possibly say "I'll call you when I get the legally required dunning letter in the mail". You shouldn't negotiate at all until and unless you have that piece of paper in your hands.

Here are some threads about H&H:
Hunt & Henriques.
summons received.

What about the default insurance that the creditors take out on the acct in case of default. Are the collectors entitled to anything if there is a charge off and the creditor was paid in full? I have been searching this for a while, Neil Garfield says its fraud on behalf of the creditor selling the acct and the collector to trying to collect on an acct that has been paid in full.

Creditors dont take out default insurance....write offs are a cost of doing business.

Not to mention, whether they have insurance or not is going to do you very little good in the courtroom, so it's just a red herring and a distraction.