Junk debt buyers...please take time to read, will help you

Thanks for making junk debt buyers clear to many on this forum. I would also suggest that you check with state laws. The fdcpa of course doesn't apply to original creditors (though it does debt buyers). However, in my state, the Texas Debt Collection Act (similar to the FDCPA) indeed does apply to original creditiors as well as third party collectors.

You make it sound like people shouldn't be liable to pay off their debt. Essentially, wouldn't that be theft? Is it OK for people to steal? You say THEM, like collectors are really the free loading criminals in this situation. Deleted for name calling! Frogpatch!

um, hey guest or should I saw 'Junk Debt Buyer who's scared to use his name' Reread what was posted. No one ever said people shouldn't repay what they owe, they were just trying to clear up some quests people had regarding how your type of company and the fdcpa work in regards to each other. Now go away.

To get an idea, you gan go here:

debtconnection.com/default.asp

It talk a bit about portfolios for sale and more.




And holy crap....I need to get back to another thread...

How can a junk debt buyer sell an account to another buyer when the debtor has provided proof of payment in full? Or a better question is, how can I get them to stop selling an account I paid in full to another collector? I have provided proof of payment in full to 3 different collection companies. This is an account I paid in full (not a settlement, but in full) 3 years ago.

I am currently in a lawsuit over old debt. They got an arbitration award by the NAF and now are trying to get it confirmed in Arizona. I am doing all I can to fight it in court but have yet to get in front of a judge. Any help is appreciated.

OK Beatle, here is a question for you.

How often do the JDBs buy accounts with the original signed credit card agreement and statements included, in the account's info?

I just paid a settlement for a student Loan will they pay the Dept of Education? because I know that The Dept of Eductation does not have a Statute of Limitations so if this junk debt buyers dont pay them , they will haunt me forever. How does this work when it pertains to a student loan. Do they keep this money of do they pay off my debt with the Dept of Educ.

namor,student loans aren't sold normally to junk debt buyers.i would demand a pif from them.guest a junk debt buyer doesn't have original creditor paperwork because they buy it from somebodt else,that is why they are called junk debt buyer.that or it is past the statute of limitations.haven't seen or heard of one junk debt buyer that wasn't a bottomfeeder.one other thing namor,who did you work out the settlement with?if it was bottomfeeder i would file an immediate FTC,AG complaints.

Quote:

Kane, that post was from 10/30/06. Besides you shouldn't respond to those kind of posts, those people just want to stir the pot and cause drama. Just let the moderators take care of them, we'll edit or delete their posts as necessary.

oops, sorry. I would have edited it out, but I cannot. You can delete if you want. :)

Quote:

Soaplady, you are so smart and I thank God that you are here to help and or give advise to all of those with a student loan situation including myself.

Thank you,
Luke

The initial post on this topis is a well written summary of the industry.

The number of accounts in a debt portfolio are astounding. When dealing with huge numbers of accounts then there is bound to be errors. Who to blame???? The original creditor... the account rep hating his/her job at the crappy call center that is maybe or maybe not in the US.... best advice is to not ignore the calls or letters.

very good advise

I was reading the ENTIRE thread. About all of this Junk-Debt Buyers...if your debt is 'split' amoung all of these people, and you have all of tese different 'creditors' on your CR, is their anything you can do about it? I mean, it would look like ( on your CR, anyway..) that you owe SEVERAL 'accounts', instead of just one that has been 'split'. I hope I'm asking this question clear enough.

Not sure I understand the question... a $5000 credit card debt would not be "split" into two different debts. But a person with a number of different credit cards that had gone delinquent would see those accounts places with a number of different collection agencies... each agency needs to be contacted and dealt with independantly. Occasionally more than one account will be placed in the same agency.... but then you have the issue of dealing with different collectors in the same company.

Maybe I should have asked you to clarify the question instead of trying to answer it.

Very good advice, but these last post have made me confused on the "split debt"

If a debt is on the debtor's credit report for legal a maximum of 7 years, and a debt buyer lists it again; Isn't that illegal? Its the same debt. So how can these buyers list themselves on someone's credit report if the debt they are listing is already there or has been there for the legal duration?
My guess, they can't, but no one is doing anyt hing about it.

"Section 803(4) defines "creditor" as "any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does NOT include any person to the extent that he receives an assignment or trans-fer of a debt in default solely for the purpose of facilitating collection of such debt for another." Since the accounts that MCM buys are delinquent when purchased and are being transferred for the purpose of collection, we believe that MCM is within the class that the "creditor" definition expressly "does not include."(2"

When they sue, are they calling themselves the "creditor" - according to this, by deffinition (the law is quoted here) they are NOT.

I apologize if I wasn't clear enough. I mean if you owe $1000.00 on a debt, and you have paid HALF of it, and the OC 'sells' the OTHER half of the debt ($500.00) to a CA, NOW you have 2 accounts, on your CR, for the SAME debt, but..DIFFERENT amounts. I've had that happen. Hope this is a bit more clear.

Also should be noted that jcemt responds to many many outdated posts :shock:

Jcemt i won't even reply to the guest even though I want to on your behalf.....jcemt rocks. I also wanted to share there is a lot of good information on a site called InsideARM: Submit your Debt Portfolio and explains the industry and you also see the companies that sale.

Where is Jcemt?? Hope things are ok.

Here is an article written by a debt collection attorney. I highlighted in bold the paragraph that describes why you should never sign a statement agreeing to pay the balance owed, in addition to why you should always object to monthly statements of account.

All of us know it is more difficult to collect purchased debt than originated debt by using the traditional legal collection approach. The difficulties from a lawyer's perspective lie mainly in problems of proof. A creditor that originates debt has access to the documentation that courts require attorneys to introduce as evidence in order to obtain a judgment. Many debt purchasers either do not have access to the source documents or can only obtain those documents at great cost. How then can debt purchasers utilize the court system to collect debts that are legally due and valid? Ken Gelhaus reports that in New York the problems of collecting on purchased debt have increased greatly in the last year. At one time in New York, court clerks entered a default judgment on claims for "sums certain" without running the papers past a judge for review and signature. In recent months, however, clerks are refusing to do so and requiring that a judge's order granting default judgment be obtained.

In one of his recent cases, Ken reports that he applied for a default judgment using the affidavit of an officer of the purchasing plaintiff. The affidavit, although able to reference the date of the purchase of the debt and the balance purchased, was deficient in that it did not include any actual business records of the originating creditor. The court found that the affidavit of the debt purchaser was insufficient and conclusory. The court suggested the debt purchaser furnish a copy of the assignment or contract assigning the claims, along with a copy of any statement or record clearly demonstrating the calculation and the amount of the claim. If monthly statements were furnished to the defendant, copies of the most recently sent statements should be annexed. Reliable and factual information concerning the claim is required.

Even if we as attorneys include such items, they are business records of the originating creditor, not the purchasing plaintiff. At least in New York, these business records would have no probative value, because no one at the purchasing plaintiff has "personal knowledge" of the creation, maintenance, issuance, and tracking of the statements. In the eyes of the court, such affidavits are hearsay and therefore not admissible. A purchasing plaintiff is unable to swear to the authenticity of the originating or source documents of a credit transaction because they do not have personal knowledge of the events which transpired at that period of time in the life of the credit agreement. The original cardholder agreement, any correspondence, and monthly statements issued by the original credit grantor are not admissible as the purchasing plaintiff's business records, as the purchasing plaintiff has no personal knowledge of how those records were created or maintained.

How then can the purchasing plaintiff's counsel obtain a judgment for their client in the face of a court's refusal to grant judgment on a legitimate debt purchased by a third-party? The obvious answer is to obtain the affidavit of the originating creditor and annex the documents of the originating creditor to their affidavit. The originating creditor would have actual and personal knowledge of the events which led to the creation of the debt, as well as the events which lead to the sale of the debt. A second alternative would be to attempt to obtain a novation of the original credit agreement, which might be accomplished by either obtaining a signed statement from the debtor agreeing to pay the balance owed. Alternatively, if the debtor refuses to sign such a statement, the purchaser could send monthly statements which, if not objected to by the debtor, might be introduced by way of the purchasing plaintiff's affidavit, indicating that no objection had been made to the statements of account. Therefore, the debtors are estopped from denying the existence of the balance.
Absent a willingness by debt sellers to sign a business records affidavit as to the origination and sale of the account, or a novation by the purchasing plaintiff of the original debt, lawyers will be increasingly hard pressed to obtain judgments for legitimate debts purchased by debt buyers. If purchasing plaintiffs wish to continue to be able to use the court system to enforce their purchased debt, it is going to be increasingly necessary for documentation to be readily available for their counsel and the courts.

Great information! Thanks, Nascardevil!

I DV'd a place that said I owed them 7k or something over a year ago and I have yet to be sued. I don't think it called attention to my account at all. Actually I think they sold it off because I got a call about 6 months ago and I threatened to sue the guy for not validating the account properly and reporting it to the agencies which are both violations of the fdcpa until I receive full validation. I did not give either agency a chance to send many bills because I DV'd it as soon as I got the first bill and disputed the entire account.

It is a tricky situation because my wife opened the account in my name not hers without my knowledge and racked up the bills. Technically I could dispute the entire thing but I risk her getting into serious trouble. When they called though I told them it wasn't my account and I would require full validation including the contract I signed which I told them does not exist because I never had an account with the company they are collecting for.

I am hoping to ride out the SOL on the two accounts she did this on so I won't get sued. I am not sure what defense I would take if I were sued prior to the SOL expiration. I have a couple years remaining I believe. I am sure if I do get sued I will be hammering this board for advice though.

I am curious about one thing that I read in a prior post about them being able to 1099 for the written off debt settlement amount. Is there any way in the negotiations when settling to make sure they cannot do that. Like in additon to having the account reported as paid in full to also have some language which denies them the option of making it income to me? Is it a choice they have or a law they have to follow in sending out the 1099's?

If you can get them to committ to it in writing, I have always asked for deletion of the TL, the CA(JDB) not to sell any remaining balance and no 1099C be issued. If they "forgive" a debt in excess of $600, I believe federal law states they must issue a 1099.

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!

TL=Tax Lien, but I can be wrong.

TL=trade line

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

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.

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

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?

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.

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.

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

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

How can a junk debt dealer say in a summons that they represent the orginal creditor?
Is this not fraud? During discovery all this (jdb) was send me copies of old credit card statements. When the orginal creditor was contacted,they stated that a law firm in Ga. now owed the account, not the firm taking legal action against me.

If the OC has sold the account, then they are completely out of the picture. The JDB cannot show that the OC is the plaintiff in the suit. You can file a MTD based on this but they would probably re-file with the correct owner listed.

I want everyone on this thread to know this: I was tormented by a debt buyer for years and then sued in my District Court. I prevailed against them because (of course) they could not produce an original contract, evidently they don't include the signed contract when they sell those portfolios. If they sue you, demand not only their proof of assignment but the original contract, they have to have it to sue you, Supreme Court already decided that several years ago.