I'm trying to figure out what to do as quickly as possible, so any reply would surely help me. I've learned some already, but not enough. I was contacted desparately by my mother last night about a collection agency who contacted her and threatened to sue her if they don't have payment by the end of today. They are trying to collect a $8743 debt for FirstCard (FirstUSA?) , and offered to settle for $6127 , or 70% The debt is not disputed, and she hadn't paid her bill to the credit card agency for 7 months. I don't know if the credit card co. has charged off the debt to the collection agency. Should I call them? I think my mother got a letter from the credit card agency that they'd send off to a collection agency on July 8th, so it might be close to a 30day assignment date. Can I still try and settle with the credit card agency? Can I do better than say a 50% settlement? My mother has no mony at all to pay this, I have barely enough to do 50%, and can't do the 70% they offered. Would a payment schedule in good faith be accepted? Should she consider Chapter 13 as well? she's 60 and has terrible credit anyway. The card was also jointly owned with my father who past away 5 years ago, and most other cards dropped their balance at that time because of the death. I'd like to get a settlement agreement in writing, I've seen a few 'form' letters on this board, but I don't know what to send, or the best way to approach this problem. They are obviously pressuring us for a response, but I'm not going to react until I know the best thing to do. Help? -d-
What I would not do is use your funds. Look at the totality of your mothers situation. If she owes much more money tha 1st USA, you may well be more help to Mom by paying a lawyer to place her in bk. You have no way of knowing if they'll sue or not. But, you and Mom have time. They have to serve your mother and then a resonse and trial date,etc. You are pobably 4-6 months away from any law suit. Get Mom to a lawyer and examine all of her options.
What is her means of income? In some states, social security income cannot be garnished, therefore eliminating that fear. I would send a cease & desist letter, to get the calls to stop.
thanks for replying, i'm still digging and looking for information and options. i asked my mother last night about other debt and she says that she has no other credit card debts or loans other than her current car loan that she is paying off regularly. she insists that this is the only outstanding sum to pay.
A CA cannot call your mother and threaten to sue her. That is about as illegal as it comes. Find out which state they are calling and post it and your state here. If you are both 1 party consent states I would get a tape recorder and a microphone and tape the calls. Your biggest problem is the cc is so huge that even suing them for violations would probably not come close to the original bill. You can also start the 30 day validation process so send that certified or fax it over for proof.
in answer to a couple of questions, the collection agency is in Minnesota, we are in MA, and 1st USA is in Texas? we are certainly all in different states. i read in the fair consumer act that they can't threaten to sue unless they intend to. my mother has been working under the table as a home healthcare worker for many years, she's not had any W2's for probably 30 years and was supported by my father.
OK, first thing to do is: take a deep breath and relax. What I would do first is to send them a validation request letter CRRR. This will buy you time. Next, NEVER talk to a CA on the phone unless you have a recording device AND it is legal in your state to use one. In your validation letter, express that ALL communication be done in writing. If the CA is true to form, the validation will be weak. You then send a 2nd validation letter insisting on original signature and itemization of charges and interest and fees. This buys you another month or so. Now, as you state, your mother's credit sucks anyway. So stop and think, what would happen IF they sued and got a judgement. Does she have a job where her income could be garnished? Does she own her home? Even if they put a lien on her home. they would not be paid until (1) she sold the house or (2) she passed away. Stop and look at the whole situation. What the CA did was illegal. He/she knew that it would throw your mom into a panic and she would desperately try to find a source for the money. They count on your lack of knowledge of the law. Unfortunately, you didn't record the call so proving that threat would be difficult. If you received another call today to ask if you have the money, I would tell him to put his threat in writing and that all communication will be in writing and hang up! Hope this helps. PS: You are not responsible for your mother's debts. She is.
Your mother given her under-the-table, cash only income would not bode well filing a chapter 13 bk as that is the wage earner's plan UNLESS she collects social security. If so let me know and I can spell out her options in that regard. If you don't want to post everything publicly feel free to email me privately. I would be more than happy to help. clc
First of all, a CA may threaten to sue if they intend to carry out the threat. Given the size and freshness of the debt, it may well not be an idle threat. Does your mother own her home? Does she have a bank account? Does she draw a survivors pension from your fathers plan?
a little more information: my mother does own the house, the mortgage was also cleared when my father passed away. the CA suggested that she take out a second mortgage to pay off the debt, which I think is a bad idea because she wouldn't want to pay off a mortgage either. she probably has a bank account, but would certainly have a minimal balance. she does not collect social security yet, so perhaps a ch 13 doesn't make sense? sending letters and such buy her time, but in the end what will it get us if we end up having to pay anyway. do CA's ever just stop trying to collect? could she win in court? if I/we can manage a 50% settlement now, that sounds better than sending off letter after letter and waiting a year, going to court, and then having to pay the entire amount. 50% now is better than 100% later. i know my mothers debts are her own, but she does not have the money, and having her harrassed by agencies and ending up in court is something I want to avoid for her. still in a quandry. your advice is helping me greatly, thanks to all of you. as far as ch 13. goes, i don't mind posting publicly, it may help someone else, but that's pretty much everything now, except for her exact savings amount. she has also willed her house to me in the case of her death.
I hate to say this but, your mother has a problem. The creditor has likely done an asset search and knows about the house. Chances of a lawsuit are very high. They can't force her to sell it but, they can win and place a lein on the house. The lein will sit there drawing interest at a rate set by state law. Before the house can be transfered, the lein must be satisfied. A Chapter 13 bk won't work because, you have to have verifiable income. Would a chapter 7? How much equity does your state exempt in a chapter 7 bk? I wonder, could your mother go to work and show some sort of income that a trustee wil accept? You may well need to see a lawyer about this entire mess.
a bit more info: I spoke with a man at the collection agency, and he said that they do not own the account but were hired on a contingency basis to collect on behalf of 1st USA. He said the 70% settlement we were offered came from the bank and he wasn't flexible on that. his boss signs off on what is acceptable or not for payments, and he agreed to pay 50% now and the other 20% in 30 days. his other option was to pay 40% now and a payment plan for the rest over several months. they obtained the account on july 30, so today is the last day they can close out an account. they must give the bank a response either settled or refusal to pay by tomorrow. so, is sending a request for validation an option in this case, and do i need to do it today? am i better off having the CA tell the bank a 'refuse to pay' and begin working with the bank. in that case i would think the bank would try to tack on any attorney fees or whatever and this "70% settlement" might not come back again. again, we are not disputing the validity of the debt, but i'm trying to find the best (and cheapest) strategy to pay it off. another note is that her name is the primary and only name on the card. thanks!
What if the mother put his/her name on the home as well. It is understanding that a lien would could be put on the house, but when she dies, the money would go to the child, then to satisfy the lien???? Could she sell the house to you for well below market value?
ddwasky, First things first - both of you need to relax. These damn CA are famous for this type of crap (Run, jump, mortgage your house, get another job, we will sue) PLEASE, I've heard it all. Don't get me wrong, I'm not saying there is nothing to worry about, but I am saying it's NOT as bad as it looks on the surface. Those bastards have to follow the law, and if they harass you on the phone, inult you, or just call at late hours, it's all very serious violations on they're part.........this is what I would do: Send out the validation request. This only takes a moment of your time, and it will shut they're mouth ASAP. The reason you want to do this is not only to stall things a bit, BUT TO MAKE THEM SEE YOU HAVE SOME IDEA OF YOUR RIGHTS (very important) otherwise they will walk all over your mother. As soon as they send you proper validation then you might want to discuss this with a BK attorney. Once you chat with the attorney, then he or you will have some leverage in negotiating the debt for pennies on the dollar - and if they don't go for it, then you just go ahead and file. Good luck, Sal
oh, i'm not worried, i'm pretty relaxed, i'm just thinking about the right thing to do. i just have lots of questions... consider them relaxed questions.. if i send out the validation letter, i think it needs to be postmarked today since it's day 30ish... can it be faxed and be legal.. I suppose that's in the FAQ.. and the man i've been talking to has been pretty helpful and easy going, not harrasing at all.
oh, one more thing, i had them fax me a settlement letter with those terms spelled out on it.. 70% now, 20% within 30 days. so at this point, i am left with 1. send a validation letter today to buy more time, certified and with return receipt requested (post office closes at 5pm) 2. accept those terms thinking nothing better will come along 3. refuse those terms and begin dealing with the original debtor after the CA files a "refuse to pay"
ddwosky Forget about how nice the guy may or may not be - they will do or say anything to get you to commit. YOU DO NOT HAVE TO COMMIT TO ANYTHING RIGHT NOW!! I honestly feel whenever they try to rush you about paying this at a certain date (it's almost always BS) Just send the validation via Fax or US mail CRRR and make them wait!!!!!! -Sal
I'm seriously considering the validation letter solution, I asked my mom what the date of the first letter she received is, and she said July 9th. The CA told me they took over on Aug 30th and need something by today... when do the 30 days start? I believe it's from the first date of contact, which should be the 9th.
Don't worry about when she got the first letter - they cannot prove you received it. Secondly, she does not loose ANY of her rights under the FDCPA if she sent the letter out later. When your mother sends out the letter, she in essence STARTS the clock!! Good Luck, Sal
40-50% to settle in full won't be out of the question if you can stall them. Although if they know she has assets (the house), they might not go that low. I think the second or third CA to have our accounts offered 50% settlement after they were charged off.
