I am scared

First off - register with this website - we're here to help and it's easier once you are registered.

I dealt with this (well, my boyfriend got into the mess but I was his representative on the phone 'cause I can sound more serious than he can!). They told him over and over again that they wanted a certain amount to even begin to work with him ($1000 up front and 179/month for 4 months after that). The card was only $250 originally, so imagine my shock to discover this skeleton in his closet! I went around and around with the credit card people and over and over again I told them if they wanted $1000, they would have to wait - finally they did and eventually everything worked itself out.

Request a debt validation letter - tell them you need that before you can do anything. Ask if the $800 you can pay now will lock in a payment plan - if you seem willing to work with them (and giving them a take it or leave it isn't working with them in their opinion) they might work with you. All you can do is your best... but KEEP on them - offer them $800 this month, and 100 a month until it's paid off (or something like that).

Good luck and keep us updated!

Don't make a payment until you are sure about the company being authorized for this collection. You should get something in your mail within 5 days after the first call is made. They need to give the complete details of the debt along with copies of proof obtained from the original creditor. Without reviewing this info, it won't be worth sending money out of fear. You don't know for sure if they have your account info. If your money goes to the wrong hands, some other company will contact you later for the same account.

The CA can take legal actions only if they have genuine reasons. As you are ready to pay the account, you are in the safe side. Ensure that the money will get posted towards your account only by this company.

I'm a former employee of Phillips & Burns. The amount is correct that you owe. In your contract with clout it states that they will still charge late fees, over the limit fees and interest even if you stopped paying. The company will not sue you though. They do not have a legal department as they claim. Is so, ask them for a bar number, which they have to provide by law, or a collections license, which they may not have. It is a scare tactic. Always contact your states Attorney General and the FTC to make sure they are licensed in your state. Check out budhibbs.com.

Hey Lisa...

I'm so sorry you're so scared. It's never easy when you know that you do owe money but the person is making threats in order to scare it out of you. What everone is saying here is correct...make sure you get something in writing first. After reading this posts and hearing some stories...the nightmare really begins when money is sent to the wrong hands.

Hi, Lisamae:

I'm sorry you're scared, too. I've been in your position -- most of us here, have. I know it won't be much consolation, but most of us have had to deal with much, much worse situations than this.

Everyone has given you good advice so far, so please do follow it. To this I would add: please start learning about how the debt collection laws work. The main law you should focus on right now is the FDCPA16 (Fair Debt Collection Practices Act).

The fdcpa gives you very broad protection and a lot of rights, all of which you're probably unaware of right now -- that's why you're so scared. You probably have the same impression that many of us used to have: that the collector is an all-powerful leviathan who owns your soul, and there's nothing you can do about it. Nothing could be further from the truth -- in fact, once you learn the law, you'll see that it's actually almost exactly the other way around: you have almost all the power, and the collector has very little.

Once you understand just how much protection the law gives you, you won't be frightened anymore, I promise you. There was a time when I was a nervous wreck, crying, losing sleep, spending weeks on end with a pounding, racing heartbeat from stress, even contemplating suicide. No longer. Now I handle these matters very calmly and routinely. You will, too. Good luck.

Did a mod edit my last entry to include that link to the text of the fdcpa? If so, thank you -- I should have thought of that. If not... wow, is the board programmed to do that automatically? That's pretty impressive.

I really don't think that Phillips & Burns is likely to sue you for $1789. The expense that they would have in sending someone to represent them in court would be too great. Even if they did receive a judgement in their favor they would then have the expense of actually collecting it. collection agencies often use these types of scare tactics over the phone. Don't get too stressed out over this idle threat.

You can send them a 'Request for debt validation' letter. In this letter request copies of their agreement with Clout Financial that gives them the authority to collect on the debt, your contract with Clout Financial stating the terms of the debt with your signature, and the complete payment history on the account. Make sure you send this via certified mail so you have proof of the fact that they received it. If they don't send you these 3 items for debt validation then they will be in violation of the fdcpa if they make any attempt to collect the debt as per Section 809(b). Wait 30 days and if they haven't responded or failed to provide all the information you asked for then check your credit file with each of the 3 major credit bureaus. If they haven't validated your debt and it still appears on your credit file then they are in violation of the FDCPA since reporting a debt to the credit bureaus constitutes an attempt to collect. Each one of these violations is worth $1000. If they reported to all 3 credit bureaus then you can threaten to sue them for $3000 (it's a great feeling when you do that, I know from personal experience).

Debt Validation is the strongest weapon in a debtor's arsenal against a collection agency. I used this technique to clean 3 collection accounts off of my credit files. It's amazing how unprepared these collection agencies are to fight someone who challenges them.