Dealing with possible SOL in IL
Date: Wed, 11/09/2011 - 08:00
back in college (graduated in 2000) I had a couple of credit cards. I either paid them off or settled with them all. I had one follow me for a bit and when I could afford to pay them, I did. Nothing major, just a thousand bucks or so.
Now I have started receiving phone calls at work from the lovely Kelly Smith at ER Solutions in Renton. I've told them I won't give them any info on me and requested they not call me at work. I've done this 3 times at work, one of them actually asked for my home number, I refused that as well.
I also got a letter from them, explaining I owe $1600 and change, 30 days to dispute, etc... and also some legal "we're required to explain to you that xyz" from Crescent Recovery, whom ER is collecting for.
Ok, I don't remember having this card in the first place, so I'm sending them a DV letter today. It's possible that one of the wonderful frat guys who were slogging T-Shirts for credit apps stole my information, but there's a very, very slight possibility that it is, in fact, my debt. I just don't remember this card. I had a few, but really believe them all taken care of.
I'm assuming that, with SOL in IL being 10 years, that this is not a debt that they can sue me or obtain a judgement or anything against me for. None of these cards were used or paid on after maybe May of 2000 as I was jobless at the time, so I don't see how I would have made any payments.
So, if they send me validation of the debt, but there were no charges or payments on the account outside of ten years, then they can still try to collect, but can't sue, is that right?
I'm not in great financial shape as it is right now, so couldn't pay anything even if I wanted to and if I COULD pay, I probably would consider not, due to their aggressive insanity and nastiness when I've been nothing but cordial and businesslike on the phone with them.
I've read through the forums and think I've got a handle on this, let me know if I'm off-base in my thinking, thanks!
I'm not sure where you got your information for SOL in IL but, i
I'm not sure where you got your information for SOL in IL but, it's 10 years for written contracts. Credit cards are almost always considered "open accounts" not written contracts. The SOL for open accounts in IL is 5 years. I would just send them an FOAD letter.
Whoopsie, that's what I meant, just wasn't sure if a DV wasn't w
Whoopsie, that's what I meant, just wasn't sure if a DV wasn't worth it. I guess I better go run a credit report as well to ensure no shenanigans.
So, a FOAD letter and if they continue to call me etc... I call the Ag or whatever.
Thanks.
BTW, I've searched around this site extensively, nice job everyone is doing. I get the POV of Creditors and the like, but they'd probably get a lot more out of people if they weren't sucks jerks.
Hang on there... I wouldnt send the FOAD letter just yet. You
Hang on there...
I wouldnt send the FOAD letter just yet. You are talking about a debt overf $600....if you send them a FOAD letter, they may just send a 1099 to the IRS and you will have to pay taxes on the debt. I like to use SOL as my last resort. I would still send them a certified letter like this:
To Whom it May Concern:
This letter is to let you know that I dispute your claims regarding the debt identfied by account number ________, as listed in your letter to me dated ___. In accordance with federal law you are now required to provide proper written validation of said debt. Please provide this validation to me at my mailing address listed below.
(name)
(address)
Sky, From the original post, I gathered that this is a 3rd party
Sky, From the original post, I gathered that this is a 3rd party collector (ER) collecting on behalf of another 3rd party (Crescent).
I thought only the original creditor could send the 1099 to the IRS.
Also, to the original poster, if you've told them to not call you at work and yet they continue to do so, I would include language reiterating (in writing) that you are not to receive calls at work wihen you send your DV letter, if that's what you choose to do.
No, the 1099 is not only limited to the original creditor. Any
No, the 1099 is not only limited to the original creditor. Any time the owner of a debt writes off an amount of debt over $600, the IRS requires them to file the 1099 for that amount. It isnt only limited to the first owner of the debt. A good example of this is when an OC charges off a debt and sells it--the debt has not been forgiven, and you are still liable for the full amount, so there is no 1099c filed there. But, if a debt buyer grabs it up, and then they settle the debt with you for, say, 1,000 on an original debt of 3,000, then they are supposed to file a 1099c with the IRS for the 2,000 that they took off of the debt. The IRS considers that to be income for the consumer. In many cases, the OC never settles the debt at a discount with the consumer, so no 1099c is needed there. But a debt buyer may write the whole debt off, in which case they will show that amount as a loss to the IRS on their taxes, and the IRS will show it as income on yours. If you corner a CA with SOL and a FOAD letter, they basically know they will never get the money from you. This leaves them only two options--either try to sell it to another bottom feeder, or cancel the debt and take the loss.
Let me get this straight... A junk debt buyer can purchase a $
Let me get this straight...
A junk debt buyer can purchase a $1600 debt for say...$400. And I'm assuming that's what we're dealing with here since it's a 10 year old debt, well past SOL and with a CA collecting on behalf of another CA.
Anyway, they take this $400 investment and settle it with the consumer for say $500. This would be a $100 PROFIT for the CA and, as far as the consumer is concerned, he just saved $1100. And yet, the CA, who just made a profit can somehow still write this off as an $1100 loss and then 1099 the consumer?
That doesn't sound right to me at ALL!
It is true--the IRS doesnt care how little the JDB paid for the
It is true--the IRS doesnt care how little the JDB paid for the debt. The fact remains, that the consumer is still liable for the full amount of the debt. It is that amount that the IRS deals with. If you owe a $3000 debt, and no matter how little a JDB paid for it, they settle with you for $1000, then you had the benefit of $2000 worth of crdit card usage, or a loan, etc etc without having to pay for it. THAT is why the IRS does it. It is not so much to reward the debt buyers, but it is more to account for the consumer. The IRS doesnt feel that a person should, for example, gain the benefit of a $3000 credit card bill without having to pay for it.
In either event, in most cases this is a rather small penalty--in the example, we're talking about that $2000 that was forgiven being added to your tax liability. There isnt a lot of tax on $2000. But even so, I still prefer SOL to be used as the last resort.