Credigy: how should I respond to this? Please advise

hi and welcome--

here's the deal as I see it. It is never recommended that you skip out on paying a legitimate debt in here. however, since you paid off nearly the balance with the arrangements you had made with the old collection agency, it would seem that you arent just trying to skip out on a debt.

When a CA tries to collect on a very old debt like this--11 years old--they can only take legal action if you do not use the expired statute of limitations as your defense. First, are you absolutely sure that this debt is past the SOL? When you make a payment it restarts the clock, and if your last payment was made in 1999, it could possibly be still within the SOL because some states have longer time limits than others. What state do you currently live in? Let's find this out first before we tell them that the SOL is expired....

You have a couple of options. First, you could send them a validation request. The problem there is, whatever they produce(if they produce anything at all), you wont have anything to refute it with because you dont have the records of those payments you made. Your second option is to send them a complete cease and desist letter. This basically tells them that they are not to contact you in any way regarding this debt. By federal law, they must abide by that request. However, in your specific situation, I would prefer to make sure the SOL is expired first, before sending this one out.

Me personally, I would send the cease and desist, if the SOL is expired. I would tell them that you made and kept payment arrangements for almost two years on this debt, so they dont have any business trying to collect a debt you already paid. I would then tell them the statute of limitations is long gone, and that they are immediately to cease any and all contact with me concerning this matter.

Any letter you send them needs to be sent certified mail, return receipt requested, so you can prove that they received it. But get back to me on your state and we will make sure the SOL really is past

Hi skydivr,

Thanks for the reply. Here's the info you requested:

1. Last payment
The last payment was in 2001. That was the year I contacted the bank and the collection agency that I no longer can pay the minimum amount due to my situation. The bank said the account already charged off and the written it off as a loss, so they don't care. The collection agency was still after me, but all I can do is send a few dollar / month while keep telling them I don't even have a roof to live permanently(!). At the end, they stop chasing me and no communication whatsoever from them.

2. State I live in
I live in CA and has been living there since 1994.

I was thinking also of sending them a debt validation (DV) letter, asking them to show proof that:
- The debt is still owned by me (after 11 years) and I'll require proof that I agreed and signed an agreement for that debt. I.e. credit card agreement I signed
- The SOL has not expired (according to http://www.fair-debt-collection.com/SOL-by-State.html#5, CA SOL is 4 years. Since I made payment and stop doing so in 2001, that means the SOL expired in 2005)

One thing that I feel strange is how Credigy, just out of the blue, start chasing me for such old debt and they didn't even check my credit report. I.e. no inquiries or account exist under Credigy name.

Oh another thing: I just look at their collection letter closely and the amount they claim I owe seems to be the original amount that I owe the bank and old collection agency back in 1997. If Credigy is truly authorized to collect, the amount should be less than the original amount since I already pay at least 30% back then.

hi linux--

ok, the SOL is long gone, you are correct there. Of course, they can still try to collect on it, but they can only sue you if you do not use the expired SOL as your defense.

The dollar amount is something else--you need to know that they can legally continue to add any interest, fees, or other charges that were originally allowed in the credit agreement. So, it may be that they have an old amount, or it may be that the amount has accrued interest since then. I cannot say, of course, but nonetheless, if they were still adding interest chances are pretty good that the outstanding balance would be pretty hefty after all these years.

Based on all of this information, I woluldnt worry that they havent looked at your credit report--did you check all three?? They may have looked at another one. I would check them all, but if they didnt look at any of them I would not be that surprised because they know this is a very old debt, and federal law means it would have dropped off your report long ago. They know that too. So, they wouldnt go looking there for info. What you should be worried about here is if they start adding this account to your credit report because then you could have a problem.

Your best bet now, in my opinion, would be to write them a letter that we call a cease and desist letter. Mine would look something like this....

Quote:

Hi Skydvr,

Thank you so much for the help! I did check all 3 credit bureau and as of today, I don't see inquiries or account related to Credigy or the bank which I owe the money back then.

I took your letter and modified like this:

[quote]To Whom It May Concern:,

This letter is being sent to you in response to a notice sent to me on xxx. Your claim is disputed and I request the following legal evidences / proof:

??????? What the money you say I owe is for;
??????? How you calculated and determined the amount you say I owe;
??????? that you has been assigned the debt by [bank name] and given legal right to collect such debt;
??????? that I have signed and agreed with any terms related to the borrowing of money for the amount you say I owe;
??????? that the status of limitation for such debt has not expired;
??????? that you are licensed to collect in my state

Be advised that this is not a refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b) that your claim is disputed and validation is requested.

This is NOT a request for ???????verification??????? or proof of my mailing address, but a request for VALIDATION made pursuant to the above named Title and Section. I respectfully request that your offices provide me with competent evidence that I have any legal obligation to pay you.

If your offices are able to provide the proper documentation as requested in the above, I will require at least 30 days investigating this information and during such time all collection activity must cease and desist.

If your offices fail to respond to this validation request within 30 days from the date of your receipt, all references to this account must be deleted and completely removed from my credit file and a copy of such deletion request shall be sent to me immediately.

I would also like to request, in writing, that no telephone contact be made by your offices to my home or to my place of employment. If your offices attempt telephone communication with me, including but not limited to computer generated calls and calls or correspondence sent to or with any third parties, it will be considered harassment and I will have no choice but to file suit. All future communications with me MUST be done in writing and sent to the address noted in this letter by USPS.I also request that all current and future communications be performed in writing to provide solid records for all of our communication in this matter. No other method of communications is accepted.


Best Regards,
xxx
USPS Delivery Confirmation
USPS Return Receipt[/quote]

Essentially, I am using the SOL as my defense. I will also send this letter with USPS certified mail and return receipt.

Do you think this letter will work and capture my intent and your suggestion above?

hi linux--

To be honest, there are times when a DV letter is a perfect fit. I am just not so certain of it in this situation, because at this point you know that the debt is past SOL. However, it would at least be a good idea to send it and see if they are trying to change the age of the debt illegally--CA's often claim that a payment was made within the last couple years--when no payment was actually made. They do this so they can show on paper that the clock has restarted. Now, if you DID actually make a payment right now, for example, the SOL would restart on the debt. They know this. So many times, a CA will falsify a payment so they can "re-age" the debt and make it appear that they are within the law. For that reason, I guess it would make sense. But at that point, all you will learn is that they have violated the law.

Sure, why not--go ahead and send that one out. just be sure to send it Certified Mail return receipt requested, so you have records of it being received.

Thank you all for the help. I will send them the letter and I'll keep everyone up-to-date.

Hi all,

So I wrote a letter to Credigy with certified mail and return receipt. Basically, in the letter I requested for the following:

- debt validation (DV): that the debt is truly mine and transferred to Credigy legally
- Statue of Limitation (SOL): that the debt has NOT pass the SOL.

Credigy responded by sending me a letter, containing the payment slips from the debt counseling company - DCC (I use them to negotiate payment with the creditor back in 1997), which then made the payment on my behalf (I pay the DCC, DCC pay to creditor).

The funny thing is that the payment slips shows the following:
- Last payment made was March 2002 (I paid up until 2001)
- After March 2002 through Oct 2002, the payment slips shows ZERO payments made by DCC.

Now, Credigy has not responded to my request for evidence that the debt has NOT went past SOL. They just send the above payment slips.

Assuming, based on the payment slips, the clock "reset" again in March 2002, that is still BEYOND the 4 years SOL for California, as indicated here http://www.fair-debt-collection.com/SOL-by-State.html#5

So my question now is: should I write them back telling them that I still request validation on the basis of SOL?

My friend told me that Credigy CAN still sue me and take me to court, but the judge will dismiss the case anyway because of the SOL. So Credigy [probably] won't sue me because they KNOW the SOL has past and they will lose in court, judging by having them NOT responding to my SOL evidence.

What do you guys think?

Oh one more thing: I noticed from here http://www.bcsalliance.com/y_debt_sol.html that:

You do not have to pay debt that is considered too old by your state. Every state has laws governing the time in which a person or entity can file suit to collect a debt.

If this is still the current law, then Credigy can't legally collect the old debt.

Sorry for all the questions, but I just want to get the bottom of it before I respond to Credigy.

Any suggestions guys?

It becomes (at this point) a moral obligation only. If you choose to pay it then so be it, you no longer have any legal obligation to this debt.

Hi JCEMT,

You are correct. I've indeed pondered about this, but I saw the debt as a very old one and already beyond the SOL, which means to bluntly put it, the debt is "forgiven". The same way as the 7.5 years bad-credit remains in my report, I have a fresh start afterwards. Granted, the debtor may file a 1099-C, but that will be another thing that I have to deal with. Of course, I also don't have the money to pay Credigy right away.

However, just going back to my thread above, I just want to make sure I am doing the right in responding to Credigy and they wouldn't found any 'errors" in my part that makes them say "AHA!" and sue me succesfully. Hence, I was looking for this board input in that regards.

On a sidenote, regardless of my debt, I also don't like the way some collection agencies try to pursue the debt and the tactics they use to scare the consumer. Take one example: I had another bad debt before but I managed to pay it all off through counseling. Lo and behold, another collections agency chased me for that same paid off debt, even though I send them a letter showing the debt is paid-off. They called my condo manager and said they're a lawyer, threatining my condo manager (what does he got to do with it??). Only a letter from my lawyer stop the collection effort, which shouldn't take place in the first place.

ok, the 1099-C thing I dont think you need to worry about because this is not the original creditor anymore. They cannot take it as a P&L write-off like the OC could because it isnt their loss. They probably paid no more than 8 cents on the dollar from the last junk debt buyer that had it. So, I dont think they can file a 1099 on you on this debt.

Second, they can legally collect on the debt, but ONLY if you dont tell them in writing to stop. If you send them a total cease and desist letter, and they keep calling anyways, then you can turn around and sue them for it.

Third, they CAN still sue you. And they CAN still win. The only way they cannot win is if your affirmative defense in response to their complaint is that the SOL is expired. If you dont bring that up as your defense to the suit, and ask that it be dismissed on those grounds, then the judge will allow them to sue you and possibly win. This is an "affirmative-only" defense, meaning you have to invoke this defense. The court wont do it for you. That is why so many junk debt buyers go after old debts, and then try to get a default judgment by not properly serving the summons....its the only way they can try to get around you declaring the SOL as your defense and shutting their case right down.

Finally, I agree--its a moral dilemma. There really is no way at this point to even know exactly what you owe for real, and why. You see, they didnt even send you proper validation. All they sent was some receipts for payments you made. They didnt send anything, from what you said, that shows there is still an outstanding balance. They didnt send anything that details that balance---breaking it down to show you where they got that amount from. They didnt validate this debt properly. So, you have a couple options, three to be exact, that I would suggest one of.

1--if you feel that you paid this debt, and do not intend to pay any more on it, then send the cease and desist letter, certified mail RRR. That should put an end to it.

2--If you feel that you still need to pay more, then you may consider contacting them about a settlement....maybe even make them an offer. The worst they could say is "no". Keep in mind, if you accept responsibility for this debt, and ESPECIALLY if you send them as much as one penny, then the SOL clock restarts, and you will no longer have that as a defense.

3--you could send them a certified letter telling them that under the law they have not validated the debt, and remind them that any further collection activity until they do so is illegal. Then, ask them for proper validation, including:

proof that its your debt
proof of the amount they claim is owed
proof of their authority to collect on this debt
proof that they are legally entitled to conduct business in your state