Trying to settle with hard hitting collectors

[laywerless]

What is the name of your state? Florida

Hi,
I owe a large debt (12,000) in my mother's name. After countless efforts to work out a reasonable payment plan after filing a chapter 7 myself, the debt was finally charged off and is in "finalization". Is that just a word used to intimidate? We have offered 40% (5,000) right off the bat but they just threaten to sue and seize my mother's assets. How long do these threats usually go on before they really take action? How likely are they to settle for 50% rather than sue? How likely are they to file a 1099 on the remaining balance if they do agree to settle? I am sick over this issue and my mother is terrified by their aggressiveness. I had taken responsbility for this debt in writing by certified letter and tried to make payment arrangements, but now this collector cares nothing of me as I have no "legal" attatchment to this debt...

Is there any hope?

We have been told "oh, they take people to court for the full amount all the time and win" but I wonder is this usually in cases where the debtor just ignores the situation and doesn't make a lump sum offer.

thanks in advance for any advice...

from stormy florida with stormy finances!

 

[Ladynred]

the debt was finally charged off and is in "finalization". Is that just a word used to intimidate?

Well, charge-off just means they're going to write it off as a bad debt and that is legit. "Finaliaztion" ?? Who knows, sounds like an initmidation word for sure, which is typical.

We have offered 40% (5,000) right off the bat but they just threaten to sue and seize my mother's assets.

Chances are pretty good they can't sieze a damn thing. There ARE exemptions from judgment that saves most of your personal property. FL has a 100% homestead exemption, so if she has a home, its untouchable.

How likely are they to settle for 50% rather than sue? How likely are they to file a 1099 on the remaining balance if they do agree to settle?

Impossible to say, but if the debt is just now at the charge-off stage, the chances of a 50% settlement are pretty slim. Not impossible, but slim. If you settle, a 1099-C is likely, but they don't have to. They can just as easily sell the remaining balance to another collection agency.

but now this collector cares nothing of me as I have no "legal" attatchment to this debt...

Hes right - you are not legally liable, its your mother's name on the account !! You cannot assume her account.

We have been told "oh, they take people to court for the full amount all the time and win" but I wonder is this usually in cases where the debtor just ignores the situation and doesn't make a lump sum offer.

They win most often when people ignore lawsuits -they get lots of default judgments that way. IF you can make a lump sum payment, you might avoid the judgment, just make sure its all on paper.

Is your mother working ? Is she head of household ?

 

[laywerless]

Settlement battle

Thanks for the reply Ladynred, you have been a great source of information to me in the past as well...

yes my mother is working, however she retires in March. We are hoping this drags on at least that long so she doesn't have wages that can be garnished... She is head of household as well. Just to clarify, this was "charged-off" about 3 months ago and is with a collection agency called Encore. I have heard that they generally buy the debt for pennies on the dollar and would be crazy not to settle, any truth there?

If we did end up in court and a judgement was issued, can they garnish her social security? We have been informed by a bankruptcy lawyer that they can garnish wages if this were to occur. Bankruptcy however is not an option for her because she has too many assets. We are just wondering if we are doing the right thing by making this offer and waiting. Will they eventually counter-offer (generally speaking). I realize they could in all actuality do "whatever" but I am curious how successful people can be in reaching a settlement with these companies.

Thanks again for your attention on this matter,
Heather

 

[Ladynred]

Ok, IF they sue and get a judgment and your mother is HOH, they can't garnish her wages, HOH in FL is exempt from garnishment.

Her social security can't be garnished either, just make darn sure the SS isn't co-mingled with other monies gets direct deposited.

Yes, they buy debts for pennies (or less) on the dollar, but they will always try to collect the full amount you owed the creditor to maximize their profits. Since this is a relatively 'fresh' debt, they probably paid a bit more for it. There's no reason you can't keep trying to negotiate a lump sum settlement. Some will go as low as 50% 3 months after charge-off, but if they know she has assets, they may stonewall you.

 

[laywerless]

Thank you

Thanks again Ladynred,

I don't think much is encouraging to my mother at this point. I do think I had the definition of HOH backwards as she is single with no dependants... we will continue on the course we are going now and hope for the best. I have been doing all the talking to this company and my mother has not called or answered any calls, in your opinion would they take an offer from her directly more seriously as she is the legal debtor?

Also, a bankruptcy lawyer told her that if we wanted he could try to negotiate the settlement for us by writing a letter (for $175) but obviously could not guarantee anything. Do you think this could be beneficial by keeping them wondering if she is going to go bankrupt if they don't settle, or probably a waste of our money.

Thanks again,
Heather

 

[laywerless]

Creditor agreed to settlement, now is playing games...

Hi again,

The good news is: My mother negotiated a settlement we could all live with! She sent a postdated check for the full amount with the arrangement that she would cancel the check if she did not receive a letter stating the settlement details ,before the agreed upon date . She received a nonsense letter yesterday with no mention of a settlement, only a statement with the agreement to cash the check and "credit" it to the outstanding balance!

She will obviously cancel the check if they can't fax a letter with the proper wording. Our question today is, how must the letter be worded to insure that my mother is not being tricked, and that an actual settlement has been offered?

Thank you for all of your advice along the way,

Heather

 

[cmorris]

She will likely need to cancel her bank account! Once they have a check in hand, they have the account number; NOT good. Always, always, always get things in writing first.

Put a stop payment on the check and close that account. Send a letter certified mail return receipt explaining why and asking for a new settlement letter. The letter they send you should state will accept XX as paid in full. The balance cannot be transferred or sold to another CA or placed back with the OC.

Hope that helps.

 

[laywerless]

Thank you

I forwarded the message to my mother. Thank you, I appreciate the fast reply!

Heather