collection interest?

[rmcnellis]

What is the name of your state? montana
if you have a line of credit which you default on and it goes to a collection agency (not into judgement), are you obligated to pay the interest? i could understand paying interest on the original amount, but can the collection agency also charge you interest? also, if you contact a collection agency regarding a debt you owe, are you simply at their mercy? if you are paying something on the debt, can they still get a judgement against you? can they delegate the amount you must pay each month? a collection agency my husband is working with said he must pay $600.00 a month for the next 3 months or they will garnish his wages even though it is not in judgement and he has been making an attempt to pay off the debt. we are trying to settle with them on this 10 year old bill. they said if we pay this $600.00 a month ( a total of $1800.00 in 3 months), they will reduce the amount he owes by $1000.00 (so instead of $2800.00, it's only $1800.00) but they want it done in 3 months - any advice for dealing with these hard ass collectors? we had been trying to pay this bill off about 6 months ago because it was on my husband's credit report, but the collection had been sold so many times we never could track it down. then we found out the company that has had it for the last year is the same company he has another collection with - only they had been sending the $2800.00 collection letters to the wrong address! they are just totally unbending. any advice is appreciated. thanks.

 

[Ladynred]

Whoa, wait a minute ! Are you saying that the last time a payment was made to the ORIGINAL CREDITOR was TEN YEARS AGO ????

If that IS the case, then the Statute of Limitations ran out a long time ago, as the SOL in Montana is as follows:

STATUTE OF LIMITATIONS (IN YEARS)

Open Acct.: 5
Written Contract: 8
Domestic Judgment: 6 (over $5000) Renewable
Foreign Judgment: 6 Renewable

If this is NOT the case then:

Yes, interest can continue to be added by virtue of the terms of the original agreement or contract.

Are you at their mercy ?? Well, no, but I would NEVER recommend calling a collection agency. They use the phone as a weapon of intimidation so you have to take the phone out of their hands. Make ALL your communication with them in writing and use certified RRR to mail everything. This gives you a verifiable paper trail should you need one.

If you're not paying what THEY want, then Yes, they can still sue you. They're under no obligtion to accept less... except they're greedy money-grubbers and all they want is money so they usually take it and keep yelling at you that its 'not enough'.

They CANNOT garnish wages UNTIL THEY WIN A LAWSUIT !! There's NO other way this can happen. If they can't or are not going to actually sue you then their threats are illegal under the Fair Debt Collections Practices Act (FDCPA), which you need to read immediately and get cozy with it - learn your rights and the CA's restrictions under the law.

As long as you are talking on the phone to these sleazeballs, they will be unbending. Start writing LETTERS and do NOT talk to them. Don't answer their calls except to get an address where you can mail your letters. You can stop the calls with a Cease and Desist letter and tell them only to communicate by mail.

Ok.. IF this debt is past the SOL as I noted above, you may not have to pay anything more on this. Sending any payments to a collection agency DOES NOT necessarily restart the SOL. I'll have to dig around in the Montana statutes, but in a lot of states it takes a NEW, WRITTEN, SIGNED agreement to restart the SOL. If you've never signed ANY agreements to pay them, then you may not have to at all any more.

Things to determine:
1- When was the ORIGINAL CREDITOR last paid ?
2 - Is this on his credit report , and if so, what is the date of last activity ?
3 - If its NOT on his credit report (original creditor), then its likely it IS past the SOL as well as the time limit for reporting per the Fair Credit Reporting Act

 

[rmcnellis]

the original creditor was last paid in 1995 - actually, it was a discover card that my husband (not at the time) maxed out and never paid on. it is on his credit report (last activity 1997) and that's how we found it six months ago - we were trying to buy a house and the underwriters on the loan wanted $3000.00 of these collections paid off. About $3000.00 was in judgement (not this particular one) and they said we had to pay those off. well we paid the judgements and all the rest of the collections off except one we had been making payments on for about a year and one we could not track down. well, about a month ago we got this letter from the collector we have been paying on for a year ( a different representative though) about this $2800.00 collection (the discover card) from 1995. well, they had my husband's name right and everything, but the wrong address - to which they had been sending this letter for over a year. When we got the notice, we called right away and that's when they said all this about paying $600.00 a month and they want to debit our checking account. At first they wanted to set up all 3 payments right then and there, but i said "no way" and that we would call once a month and make the payment arrangements. She did threaten my husband to garnish his paycheck until the whole $2800.00 was paid unless he agreed to a $100.00 payment THAT day to be debited from our checking account and he was terrified because he has had judgements against that have garnished his wages, so he agreed and gave her our account info. So, that's the story. we have not yet made a $600.00 payment - we are holding off to hear what anyone has to say. We haven't signed anything saying that we have agreed to pay, but did make the $100.00 payment last Saturday. Thank you so much for your advice.

 

[Ladynred]

Ok. I do believe that you have NOT restarted the SOL on this thing. Here's the Montana statute:

http://data.opi.state.mt.us/bills/mca_toc/27_2_4.htm

"27-2-409. Acknowledgment of debt or part payment. (1) An acknowledgment or the part payment of a debt is sufficient evidence to cause the relevant statute of limitations to begin running anew.
(2) An acknowledgment must be contained in some writing signed by the party to be charged thereby.
(3) Part payment is any payment of principal or interest. "


Since there was NO WRITTEN ACKNOWLEDGEMENT with your signature on it when you made the panicked payment on the PHONE to the CA, this should NOT have restarted the SOL. Its possible that if you had actually written them a check, with your signature on it, that this could constitute the 'written acknowledgement' stated in the law.

I have asked an atty if my interpretation is correct. If it is, then you can send this nasty CA a cease and desist letter based on the expired SOL. I'll post back as soon as I have that atty's interpretation.

Oh.. one more word of caution - watch your bank account !! Once they have your bank info, they can and WILL dip into your account when they feel like it and could very likely DRAIN IT. If I were you, I'd call the bank and block any further transactions of this nature from that CA.

 

[rmcnellis]

joint acct

my husband and i are both on the checking account - i still go by my maiden name. the CA spoke only with my husband about debiting the account, can they still "clean it out" as you say, without my permission as well? thank you so much for all the research you've done and the great help you've been.

 

[Ladynred]

My initial response is 'Yes', they can still go in and debit the account again, claiming your husband's initial 'authorization' to do so. However, to be absolutely sure, I'd call the bank and find out. If it would require your assent as well, then you're safe.

BTW, mind telling us who the collection agency is ??

 

[rmcnellis]

NCO financial is the CA.

 

[Ladynred]

Oh Lordy... one of the top 5 WORST CA's out there ! I have to deal with them myself and they're NASTY people. I deal with them by NOT talking to them, EVER. They use the phone, as do all CA's, as a bludgeon. You HAVE to take that weopon out of their hands entirely and deal with them in writing only.

 

[rmcnellis]

I just want to be absolutely positive that I am in the right on this issue before I send them a letter saying they need to stop contacting me and my husband. What I am wondering about now is, will this debt stay on his credit report indefinately as "unpaid" or will it, like the others we have paid, go off in 7 years? And am I correct in saying the CA or Discover can no longer obtain a judgement in this matter because the SOL has run out? I cannot thank you enough for all you have done. Had it not been for your help Ladynred, we would have been up a creek. I feel my husband was irresponsible for not paying his bill, but sheesh! thanks!

 

[Ladynred]

I haven't heard anything to the contrary from the attorney on my interpretation of the laws I posted here. I have also found out that even if you somehow did restart the SOL, the payment your husband made was under duress, which, under MT law, would give your husband a right of rescission and pretty much voids the whole thing. Being illegally threatened with garnishment and subjected to that kind of nastiness and pressure is definitely duress !!

Provided that my interpretation of the MT laws is correct, and given the 'duress' factor, I do believe you can tell this CA to go pound sand, the debt is time-barred. They could not legally sue you and get a judgment. That doesn't mean they won't try, in which case you'd have to use the expired SOL and the state statutes as your defense and the whole thing would be thrown out.

As for your credit report, negatives can only stay on your report for 7 years from the date of last delinquency (meaning last time it was paid on and never caught up again). Actually, if the date it was last paid (to Discover) was 1995, it should already have dropped off. Paying a collection agency will NOT change this 7 year reporting limitation.

**** update - heard from my attorney friend. This was his reply:

"Any waiver of right must be in writing,with clear language and signed by BOTH parties. This is in the Uniform Commercial Code as accepted by all States.

Montana's laws are poorly written, but unambiguous, any waiver of rights, or acknowledment of an obligation, must be in writing.

Make sure she closes her account,as these scam ca's will drain it dry. "

SO -- I was right !! You didn't restart the SOL. Send them the letter. Here's a good one (from this same attorney):

http://community-2.webtv.net/Y-Chat/WhyChatsCredit/page3.html

The MT statute code you need to use in the letter as to the statute of limitations is this: 27-2-202

Make sure you send it Certified, RRR. Keep all the copies and keep track of the green card/receipt you get back. File it for safe keeping .

 

[rmcnellis]

following up . . .

Just to follow up, I sent the letter certified registered a few days ago. I haven't received the recipient card back as yet. Now, what if this CA won't stop contacting me? The other night she called 17 times in 3 hours and left some pretty beligerant messages on my machine. So then the next time she called, I answered and told her not to call anymore, yadda, yadda. If I get the little card back from the letter I sent and they still call me - should I get a lawyer? Would it then be harrassment? What's the next step? Thanks a million.

 

[kevinss]

Limiting contact

Ladynred,

In your experience, does asking a creditor to cease communication by phone make them more likely to go after a judgement, or to go after one sooner than they would have had you communicated with them by phone?
I ask because I, personally, have been afraid to ask them to cease phone communication ONLY because I was afraid they would realize that I knew my rights and use them. Obviously, certain agencies are more likely to go after a judgement than others, but how does the method by which you communicate affect their practice?
The answer I'm hoping not to hear (but am probably going to) is that it's all up in the air and you take a chance either way.
I personally haven't had a problem with them contacting me by phone yet, but this might be good information for everyone to have.
I know this doesn't apply to this person's particular situation because she's very obviously "on top" here, but this thread prompted the question.

 

[Ladynred]

Hopefully you kept the green receipt with the number on it ?? If you did, you can go to www.usps.gov and use their 'tracking' page to find out the status of your delivery, that'll tell you if its been delivered before you get the green card back.

IF these idiots call you again after you KNOW they've gotten your letter, it wll definitely be time for a strongly worded 'intent to sue' letter, and if they ignore that, then be prepared to follow thru with it. Definitely file a complaint with the FTC and your State AG's office. KEEP those recordings !! Keep a record of every single one of those calls. 17 times in 3 hours is DEFINITELY harrassment - file complaint with the phone company as well.

These 'beligerent' messages are a violation of the FDCPA. If they call after receipt of the C&D, then you should consider contacting this law firm - Edelman, Combs, & Latturner, NCO is on their 'hit list' of CA's they're collecting info on to file a class action suit. If you go to their website www.edcombs.com, then go to their Special tab, you'll see the list of bad CA's they're after. I have been in touch with them about another CA, they're interested

Kevin - as for whether or not sending a CA a C&D letter if you're within the SOL *could* be risky. Unfortunately, there's just no way to tell. If you tell them to stop ALL communication, its certainly likely they'll try to sue, so at least stopping only phone communication affords them some avenue of contact with you.

 

[rmcnellis]

Thank you!

Just wanted to say a final thank you for your help with this. The CA did call me once after she received the certified letter and she started to leave a nasty message so I picked up the phone and got nasty right back. She hasn't called since.

 

[Ladynred]

ROFL !! I love it.. they can dish it out but they can't take it !!
Hopefully they'll fade back into their cesspool and not bother you again.