Asking for advice.....................

There is another way to look at this.

You have an agreement with the first company. They acknowledge that verbally, and agree verbally to your original terms.

A new company comes along and claims they bought the remaining debt from the first company. They originally claim the full remaining amount that would be due absent any settlement agreement.

The first company agrees verbally that they sold it to them, and claims verbally that they have agreed with the second company that the settlement agreement is binding.

You had payment arrangements with the first company for debiting payments on an agreed schedule from your checking account.

------------------------------------------------------------------

At this point, you have nothing in writing.

What is to stop this CA from later asserting that, based on the records they got from the first CA, the full amount was due, and ignoring the settlement agreement? What is to stop this CA from selling the debt to a new one, again ignoring the settlement agreement?

You are, however, dealing with a new debt collector, that has contacted you for the first time, so their obligations and your rights under FDCPA are in accordance with such an initial contact. In particular, FDCPA forsaw the need to verify debts when transferred to new debt collectors, to ensure the new debt collector was the correct party owed, and that the amount they claim is due is accurate.

------------------------------------------------------------------

Has the first company sent you anything in writing acknowledging the terms of the settlement agreement?

Has the first company sent you anything in writing indicating they sold the debt to the second CA?

Has the second company sent you anything at all in writing?

Has the second company agreed, even verbally, on the original agreement terms?

Has the second company withdrawn money from your checking account, based on an authorization that you only made to the first company, and not to them?

 

"I am suppose to call tonight to speak to a manager of the first company to send to me in the mail the payments I made, the settlement agreement and the amount due at time of sale on the settlement agreement."

You also want them to include in writing that they transferred the debt to the new CA, subject to your settlement agreement.

If you have problems getting the first CA to cooperate in providing the above in writing, you could then "dispute and request validation" under FDCPA from the second CA. In fact, since the notice from the second CA indicates an incorrect balance that is not due under your settlement agreement with the first CA, it would be appropriate to do so anyway. You would summarize the terms of your settlement agreement with the first CA, and request validation, including an accounting for the debt and payments applied to it in accordance with this settlement agreement. Send it in writing, CRRR, to the second CA, and include a copy of their own letter with the erroneous amount.

If they want to substantiate their right to collect on the debt they purchased from the first CA, they should obtain the above from the firt CA and forward it to you. That would establish both the amount and terms of the debt that were transferred, to ensure it is in accordance with your settlement agreement, and that it was in fact transferred.

You are not trying to dispute that there is a debt owed, but do want to force the parties to put in writing that the debt was transferred, subject to your settlement agreement, and that the first CA acknowledges that sale and transfer, and the second CA agrees to the remaining correct amount due and has corrected its records to reflect that. In your dispute and validation letter you would make it clear that you have requested this accounting from the the first CA but to date have not received it.

That would make it to the advantage of the second CA to put the pressure on the first one to provide written validation, as without it they have bought a disputed unsubstantiated debt. Legally, they would also be prohibited from collection activities until validation was provided, as long as your validation request was sent within 30 days of their initial letter.

 

You want the second CA to send you "validation" of the debt from the first CA who they claim sold it to them, which would indicate both what the remaining balance is under your settlement agreement, and that the debt has been transferred. You might also receive such validation directly from the first CA.

 

"My time now is limited, isn;t it because I did call them this past week?"

Why do you conclude that?

You want to pin this down promptly because it is in your interest to do so.

You may have limited time to make best use of your rights under FDCPA, assuming the second CA sent you an initial collection letter that included the usual wording that if you didn't dispute it within 30 days, they would consider it valid. That is primarily to preserve some leverage for you to use should they fail to respond with validation but continue to demand the non-settlement amount in violation of the first CA's settlement agreement.

"I have never had a collection agency garnish my wages. Could it come to that in Kansas? "
You are going down paths that no-one has yet started on. A meteor could fall from the sky, too.

"What if the first CA does all that you have mentioned and the second CA refuses to send the validation ?"
See above.

 

Again, keep in mind the goal.

You have an agreement with the first CA. Based on that agreement, they had no right to sell the debt to anyone else claiming that any amount was owed other than that amount remaining under that agreement.

That agreement is at this time verbal, but as of now, the first CA has acknowledged it, and claims the debt sold to the second CA is subject to it, and that the second CA agrees. You want this in writing, with recognition of it by the second CA. The second CA has sent you a collection letter listing the original debt less payments made, not in conformance with your agreement.

Since the debt has been transferred to a new CA, FDCPA gives you the right to dispute and request validation, blocking collection until such validation is provided. If the second CA continues to press for collection without validation, they violate FDCPA, as long as your validation request is sent to them timely, within the 30 days that if you dispute they cannot consider it valid.

Although it is possible that the first CA is stringing you along, and it is possible that they may have intentionally sold the debt for the pre-settlement full remaining amount, at this point they at least verbally acknowledge the agreement. It is to your advantage to pin this down now.

As a general aside, you are best off raising issues sooner than later, and at least no worse off for doing so. In fact, whenever you are dealing with a contract with another party, it is better to raise any issues immediately, to allow the other party to comply, and remedy any breach. You would generally want to do this in writing, with verification of their reciept (sent CRRR). If it turns out they have no intention of meeting their obligations, you want to know earlier rather than later, so that you can take what actions you need to do to look after your own interests, and mitigate your damages.

First, you have a right to dispute and request validation from the second CA, and hold up payment until they provide it.

Second if these 2 are trying to collect on the full amount in violation of your agreement, you are better off knowing it now, before you have paid them more, since your best leverage to getting this put in writing is that once they do so, the second CA will get paid in accordance with the settlement agreement, just as you have already been paying the first CA.

If they are trying to pull something, they must weight the probability of receiving what was agreed to, against whether they would collect the pre-agreement amount, or possibly nothing more, and possibly even be sued for breach of contract and FDCPA violations.

If you were in their position, would you choose the bird in the hand, or the possibility of two in the bush? More directly, if you were the second CA, and you thought you had bought two birds in the hand, but it turns out you were sold two birds in the bush, do you step into someone else's dispute hoping to get those two birds, or do you just demand that the seller reimburse you for the fair value of the one bird delivered?

 

Given the above, what do you want to do?

Send a letter, CRRR, within 30 days of receiving the second CA's initial letter, to the second CA, disputing the erroneous amount in their collection letter, and requesting the name and address of the original creditor, and original account number (to pin down what debt we are referring to), and request validation of the debt. Include a copy of the second CA's letter that had the erroneous amount. Note the "Certified" number on your letter, so you can prove what was sent, and keep copies of everything.

Include in your letter that proper validation must include an accounting for all payments made to the first CA (reference them by name), and must indicate the remaining amount due in accordance with the existing settlement agreement with the first CA (by name). That should be sufficient to make clear to both CAs that you want documentation that the transfer of the remaining debt is subject to the existing settlement agreement, since you have already raised this issue with the first CA on the phone.


If in fact the second CA and first CA are in agreement that the debt was sold subject to your settlement agreement, the first CA should send the above validation, in the form of a statement from the billing system of the first CA showing payments made, in accordance with your settlement agreement, to the second CA, which should then forward it to you so that they can get paid. The statement may explicitly show a reduction due to your settlement, and the remaining balance due should reflect that settlement, as well as all payments you made, to arrive at the remaining amount due on the debt to be transferred to the second CA.

If, as is claimed by the first CA, the debt was sold to the second CA subject to the settlement agreement, there is no legitimate reason for the first CA to fail to provide such validation, and for the second CA to fail to send it.

By having the second CA provide it in response to your validation request, you are documenting both what the first CA claims is due in accordance with the agreement, since it is produced by them from their records and represented as accurate validation by them, and you are documenting that the second CA agrees that this is what they are due on the debt, since they sent it in response to your validation request. You thus pin down in writing the amount remaining due under the existing agreement you mentioned in your validation letter. You also pin down that first CA did in fact transfer this debt to second CA.

 

If you get any attempt to demand payment, or other threats, without providing validation, then something is up. There is no legitmate reason to not provide documentation of the remaining debt in writing, since by doing so, it is already clear the second CA will get paid.

Maybe the first CA sold the whole remaining debt in violation of your agreement, and just lied to you about the second CA agreeing to the settlement terms, or the second CA bought the settled debt, but hopes they can force you to pay the full amount or later sell the amount remaining and ignore the settlement, or maybe the first CA doesn't have clear title to collect on the debt in the first place.

Regardless, at that point you would start filing complaints against both, with your state AG, FTC, BBB. You would also seek an attorney.

 

Like an established and acknowledged border between countries, a contract or agreement, even a verbal one, has a value to both parties. To preserve its value to you, however, you must insist on asserting your rights under it, and insist that the other party acknowledge it also, if they expect to receive the value due under it to them. This is most effectively enforced while there is still a value to both parties in such acknowledgement of the agreement, i.e. before the remaining payments have been made.

The above viewpoint is mostly derived from looking at this as a problem in game theory, or negotiation, and although law recognizes the concepts of "offer", "acceptance", and "consideration" as elements creating a binding contract, whether verbal or written, what we are looking at are the incentives to abide by an agreement, once achieved. For example, at root, the basis of reaching a stable settlement in a series of transactions, or rounds of a "game", is "tit-for-tat", where you don't cross the other party, or they will cross you. Neither party has an incentive to deviate from the agreement because both parties have at stake not just one particular transaction, but the full sequence agreed to.

In the absense of an expected series of transactions, the incentives are different, and might best be described as "take the money and run".

Whether we are dealing with international disputes, or a series of payments on an account, the most stable outcome to both parties is often in performing "as agreed", regardless of concepts of law. We recognize concepts of "honest" vs. "dishonest", and "fair", vs. "unfair", not just in a legal sense, but at an emotional level, and in fact, even our primate relatives appear to have this programming, so it is probably genetic as much as social convention. Debt collectors use these same human responses in coercing payment short of litigation.

You would have clarified things, for example, if on reaching your original settlement agreement, either you insisted on a written signed agreement, or you had sent your first payment under it along with a letter summarizing the agreement and the phone conversation in which it was reached, and indicating that acceptance of the included payment constituted acceptance of the agreement, with your check refering to the agreement in the letter.

Their choice then would be to repudiate a verbal agreement they already claim to have made with you, at the loss of this payment and possibly any other payments since they would basically be saying that they could not be trusted to keep agreements, especially verbal ones, or to accept payment and document their acceptance of the terms already agreed to.

On transfer of this debt to a new debt collector, however, FDCPA also gives you the right to demand written documentation of the debt. At this later date, that is useful to force both parties to put in writing the remaining amount due under the agreement.

Note: I am NOT an attorney. This is just my layman's take on your situation.

 

Whichever CA is asking to be paid (presumably they bought the debt, or maybe they were assigned collection of the debt by a party that bought the debt) is the one obligated to send you notification of your dispute and validation request rights under FDCPA within 5 days of their first contact with you. They are therefore also obligated to respond to your dispute and validation request letter, as their notification was required to say they would, if they expect to collect.

If you dispute and request validation timely (within 30 days of that first letter, or anytime if they never sent you that letter), and they fail to respond, but they continue to demand payment, they violate FDCPA. They don't get to point the finger at the CA they bought the debt from, and make you meet their legal obligations for them. It is their responsibility to send that validation. Furthermore, you have presumably already told them in your request that that validation must include an accounting for the remaining balance in accordance with the existing settlement agreement. If the first CA does not cooperate with them in substantiating their purchase, ownership, and right to collect on the debt, that is their tough luck. They may have legal recourse against the first CA, but that is their problem, not yours.


Who is the first CA that you reached the agreement with?
Who is the second CA that claims they now own the debt, and are due payment?

 

Then, as the new CA trying to collect, Asset Acceptance is the party you would send your dispute and validation request letter to, CRRR.