I'm glad I read this before I was about to pay. The agency that I was about to pay has offices in NY, Oklahoma & Arizona, none of which are protected by the FCRA. Also, I happen to live in Illinois, also not covered by the FCRA. BTW, California has the strictest laws on this. Got this information from: http://www.creditinfocenter.com/debt/CanCreditorSue4SettlementDifferences.shtml **************************************************************** "I negotiated a settlement with a creditor for less than I owed. The creditor is now suing me for the balance. Is this legal?" Yes! You need to read the following information carefully. Some collection agencies will agree to settle with you for far less than you owe and then turn around and hire another collection agency to collect the difference. However, in many states this is illegal. Once a creditor deposits or cashes a full payment check, even if she strikes out the words "payment in full" or writes "I don't agree" on the check, she can't come after you for the balance. The states in which this law is enforced: * Arkansas * Colorado * Connecticut * Georgia * Kansas * Louisiana * Maine * Michigan * Nebraska * New Jersey * North Carolina * Oregon * Pennsylvania * Texas * Utah * Vermont * Virginia * Washington * Wyoming Some states have modified this rule. In the following states, if a creditor cashes a full payment check and explicitly retains his right to sue you by writing "under protest or without prejudice" with his endorsement, then he can come after you for the balance. But those exact words must be used. If he writes "without recourse," communicates with you separately, notifies you verbally or writes on the check that it is partial payment, it is not enough. * Alabama * Delaware * Massachusetts * Minnesota * Missouri * New Hampshire * New York * Ohio * Rhode Island * South Carolina * South Dakota * West Virginia * Wisconsin
This continued collection action is illegal if you have written evidence that the account was settled. That is why you must get any settlement agreement in writing BEFORE you pay! To cover oneself, the language that the matter (debt) is closed, and any further collection attempts or activity will be considered illegal should be always be included in a settlement agreement. Debt is a business transaction; if the extendor of credit elects to "settle" by accepting a lesser amount; then all is closed at that point. This is a standard "arms length transaction" accepted by both parties. There is no doubt that there are businesses out there who will attempt to collect the percieved "balance", but if the CA has purchased the account, and is acting on their own behalf (and for their own interest), then a settlement is a legal business transaction which ends it. Any continued collection is not legal, and is a desperate attempt to capitalize on a consumer's ignorance and/or fear.
biz, So if I make the settlement with this collection agency for less than the entire amount, they can't turnaround a sell the remainder to another collection agency, thus creating another SOL with that collection agency? On the settlement letter, it lists the original creditor's name and account number. I just want to make sure once I pay the settlement amount, this account is dead and they can no longer sue me & affect my credit, either through them or another collection agency,
A couple of items I would clarify with the CA (before you enter into a Settlement Offer). 1) Do they "own" the account, or are they acting as "Agent" for the OC? 2) Are they licensed to conudct business as a CA? and in your state? Again, we have two "realities" here; the legal aspect, and the "real world" aspect. 1) Legally, if they "own" the account (they have purchased the debt from the OC), and they enter into a legal agreement of Settlement, then it is a "closed case". (MAKE SURE YOU GET THIS IN WRITING!) 2) "Some CAs" "may" try to sell the balance, or continue collections efforts, BUT.....if you have the documentation to prove a "Settlement", then you have all the defense you will ever need. So, to clarify, if they agree to a lesser amount to "Settle", you are done, BUT...make sure you have documentation to legally cover yourself in the event of any "mistake" on the part of the CA.
I'm almost certain the CA (cavalry portfolio services) bought the account from the OC (BofA). Not sure if they are licensed to collect in Illinois. On my credit reports, BofA lists this as a "chargeoff" with a balance of "0". If I let the SOL run it's course & not pay, they then could sell that to another collection, correct? (BTW, I have settlement letters, certified mail receipts w/return signatures, and taped conversations!)
Yes they can keep reselling the account if you dont pay it. BOA will list as chargeoff with 0 balance.
Well, I have finally decided to pay the collection agency for the settlement. I can only hope (with my fingers crossed) that this will work out. I feel very confident with all the "paper trail" I have created and from the advice of everyone on this board, that this will be resolved. My final request to the CA was to get a written letter stating a) no other action either from them or another CA can be taken against this account b) how it will be stated ver batim on my credit report. Thank you all!
I just noticed that the number under "original account number" on my settlement letter does not match the "original account number" on my credit report. Does this mean that the CA created a bogus account? The first 7 numbers are correct, but they're incorrect after that. The original account number is the number that's on your credit card, correct? Shouldn't when I requested validation through the credit bureaus this have been caught??
Yes, but shouldn't the "Original Account Number" on the settlement be the same as the account number listed under the credit bureaus? This is how it reads on the settlement: Original Institution: MBNA Original Account Number: 5329019089738** Cavalry Reference Number: <8 digit ref. number> Balance Due: <balance> On my credit bureau statement, it lists the MBNA account as: 53290199992530** Could this be because of MBNA merging with BofA? My credit card was through MBNA, but it is listed under BofA on the credit reports. I would assume if this is a bogus account, this would be highly illegal. Correct?
I do not believe they would actually try to scam the debtor by altering a 16 digit account number. It would make no sense, how would they follow-thru on this scam?
That's what I thought. Probably nothing to worry about, but it's just been so stressful trying to get this thing taken care.
Don't be too alarmed by the different account number; this is a procedure done by Bank of America (and previously MBNA). When an account goes into "Charge Off" status, they change the account number. Please notice all the "9s" in your new account number. This is a labeling that the account is a Charge Off, a throwback to the days of "R9" listings on credit reports fro Charge Offs. This does give you a legitamate reason to dispute with the CRAs. Dispue as "Not Mine" due to "Account Number Not Mine" or similar wording. But I would request some clarification, just to cover yourself. You probably can "test" the account number by telephoning one of the 800 numbers and seeing what thay state for the account status.
