Hey guys, first post. I've found myself in kind of complex mess here. I had a car accident back in 2010, after switching insurance carriers about two weeks before. I was lazy and hadn't gotten my photo inspection and as a result, had my collision coverage temporarily deactivated. SO, after they junked my car, I still had an outstanding debt of roughly 10k to GMAC, which GMAC then charged-off instantaneously. I tried to fight the charge-off because I'd never missed or been late on a payment, but because it was a new / financed car, I was required to have collision coverage. They refused. I continued to pay my monthly bill as I felt it was the right thing to do, but after a while it started to make me mad that they charged my debt off. Regardless, I still kept on paying. After I changed jobs in Feb. of this year, I ended up making significantly less money and can't afford the payments (or much of anything for that matter - I make roughly 16k/yr now instead of the 32k/yr I was making before). They turned it over to a collections agency and I received a notice which gives me the chance to "dispute the validity of this debt." Additionally, I've been getting barraged with calls at work (once or twice a day - every day) which I never answer. I'm not really sure what to do, but my Dad already said he'd be willing to give me 1/2 of the money that's still outstanding, to help me get through this rough patch, but what's the point if a negative notification persists on my credit report?
I guess what I would like to do is get the best result possible for myself, while still paying back as much of that debt as possible (which looks like it'll have to be settled at no more than half of the outstanding 5k).
Can I request a pay for delete from the original creditor (GMAC), if the outstanding amount has already been turned over to a collections agency? Or do I just have to deal directly with the collection agency? I'd rather not put any money in the hands of those guys if I can avoid it.
If the debt has been charged off and sold to the CA, then you'll unfortunately have to deal directly with the CA. Have you already sent them a DV letter? If not, that should be your very first step. This is an interesting situation that I haven't come across before. I'm curious, did they give you any other reasons for why they immediately charged off your account? It seems strange to me that they would do that just because you didn't have collision insurance in place at the time. You should also call your old insurance agent and give him/her a real earful. They should've never canceled your insurance until you had full coverage in place first.
Hi Josh, thanks for the response. I appreciate it. I will be mailing the DV letter tomorrow morning, first thing. I'll bet my situation is unique enough that you might never encounter it again, that's how bizarre the chain of events was. Just my luck, ha! As far as I know (and it's been a couple years since I spoke with GMAC) the lack of collision coverage combined with the loss of the vehicle was the only reason given as to the charge-off. I disputed it unsuccessfully. I guess their rationale was because I didn't have the stipulated, required collision coverage and the remaining loan amount was an unsecured debt for a piece of property that no longer existed, that their chances of collecting the outstanding amount were small, thus, it was written off as bad debt. I couldn't really give the insurance agent a hard time because I was duly notified of the photo inspection requirement and just procrastinated on it. A day or two before the crash, I got a letter informing me that my collision coverage would be disabled until I took care of the photo inspection, so I was definitely aware of the situation. The ten day grace period should have been sufficient.
I understand the thought process behind why they charged it off, but it just seems strange to me that they would do it immediately without even reaching out to you to discuss payment for the remaining balance. You continued to make payments for awhile anyway, and what if you had been willing to just pay off the remaining balance in full? Anyway, let us know how they respond to the DV letter.
Well, I was probably being sort of hyperbolic in saying they charged it off "immediately." The story is actually more complex. I had the car junked for what I hoped would be 250 bucks back in my pocket to go towards the outstanding amount, but I had it towed without the title being in my name (oops!). The towing company said that because I had misinformed them, I would instead be charged $150 for the tow and (if memory serves me correctly) another 30 bucks a day for up to 60 days of storage, after which they would auction the car for parts, if I didn't get a copy of the title or a lien release from GMAC. Needless to say, I was on the phone immediately trying to get the situation cleared up, but I could only reach their off-shored customer service operation. When I sent the GMAC Auto corporate offices several letters informing them of what was going on, they did nothing - no call to the towing company - and let the car sit, which was something that, at that point, I had no control over. Turns out, GMAC were the ones liable for storage and towing charges - not me - which more than likely pissed them off, so they gave me 30 days to pay the outstanding amount, which was somewhere in the neighborhood of 10 G's. I didn't pay. They charged me off.
When did they receive your DV letter? They technically don't have to respond to your DV request, but if they choose to ignore you and not properly validate the debt, then they need to cease collection activities too.
Well, it's 5 months later and the first company buzzed off, but I just got another notice from a local attorney's office. It had a little payment thingy attached to the letter. In the letter they specifically say they will validate the debt upon request, so I'm sending another one through... will report back. Thanks!
In the original contract....was their a clause that specifically stated that if vehicle is totaled, the entire loan amount becomes due within 30 days? I don't understand why you couldn't simply keep making the monthly payments on the vehicle? (I realize it was gone, but for a loan company to move from accepting monthly payments to demanding the note be paid in full, to me, sounds ridiculous) I don't see how their chances of collecting on an unsecured debt for a vehicle that no longer existed would be considered small if you had been all along making your payments on time.
1.) Did the letter from the local attorney include the attorney's physical signature (not a facsimile or computer printed signature)? 2.) Are you prepared to litigate? If you are, I would file against the original CA for violating 809(b), and 807(6)(B); and against the lawyer for violating 809(b) - if the lawyer had reviewed the information from the previous CA, they should have seen that the account was already subject to the prohibitions of 809(b). Hey, maybe the thought of paying out $1,000.00 right after they've obtained the account will make them want to slink away as well...
