Discussion in 'Credit Talk' started by ATM, Feb 17, 2001.

  1. ATM

    ATM Guest

    Hello Marie and to everyone else! Iâ??ve been reading the info here on creditnet and have also just started reading over the info on the Yahoo Credit group you recommended Marie.

    Here is my situation: In late 1996 I defaulted on an auto loan with American General Finance. The loan amount was for about $6,500.00 and my mother was a co-signer on the loan. They took back the automobile and sold it off at an auction and then sent me a notice that it had been sold for $2,500.00 and that with interest (23%) I still owed them $6,500.00.

    I left it alone and they attempted to contact me a few times over the years, as well as send me letters. It wasnâ??t until late 2000, that they transferred the account to Premium Asset Recovery Corporation (PARC). I got a letter and a phone call from PARC in October of 2000, and they asked me to pay 50% of the balance on the account. They said if I wanted to have the trade line removed or changed to R1 status then I would have to pay more than 50%. I called American General Finance and asked them about the account and they told me (at two different times) that the account had been SOLD to PARC and that I needed to contact them. When I called PARC back about the account, they claimed over and over that they do not own the account and that they are just collecting on it.

    Itâ??s now 2001 and Iâ??ve done nothing, and they have just kept sending me the same letter asking me to pay the account. They have started to call more often now and leaving messages on my voicemail. BTW, it was late November when I had spoke with someone at PARC on the phone and he said he would request original documents from American General as per my request. When I requested this over the phone he asked me if I was just trying to get out of paying the debt. I told him that the interest and balance due was incorrect (it really is). Anyhow that was November and I never got a response to that. I know I should have had it in writing so I guess thatâ??s where Iâ??m at now. Iâ??m wondering if I should go with the validation letter 1? BTW, I disputed the account on both my reports as well as my motherâ??s reports and they all came back â??verified.â? I know they do not have the original contracts anymore, so Iâ??m not sure what or how they could verify the debt. Any help Marie or anyone else can offer would be greatly appreciated. Thanks for your time!
  2. Marie

    Marie Well-Known Member

    a little clarification...

    A little more info:

    Does anyone have a judgment on you?
    This is really important b/c a judgment changes the whole equation.

    The interest accruing.. is that before the writeoff? Normally, interest etc accrues until writeoff... then the account kindof dies... stays at the same amount while it's passed to collection agencies... then, and only then, if someone gets a judgment on you, interest starts again at a set rate (like 10-12%). Normal interest. Just trying to figure out if the collection agency is trying to tack on 23% interest. Oh, that would be so sweet for you. If they didn't have a judgment and were trying to add interest illegally.. you'd have them by their... well.. it'd be nice.

    Have you EVER made any payments since the car was sold? ever? even small ones?

    1. Check the statute of limitations in your state. They may be at or near the SOL (the date at which they can no longer collect on the account) unless there's a judgment. That's what I'm guessing. Probably why they're stepping up their efforts. Try to figure out the last date of activity on your account. When was the car sold? when was the account written off.

    link for sol:

    Figure this out and get back w/us. You can always start the validation process and it'll never hurt you... only protect you. Figuring out if the sol has passed just adds to the idea that they can't collect a thing from you.

    Always send the letters certified, rr requested. Glad you found kielsky's info and the yahoo group too.

    Hey, you may want to post your exact question there and see what "Due Process" and the guys say. I'm pretty sure they'll also tell you to start the validation letters.

    By the way, once you look at this with the proper perspective it starts getting funny. Big bad collectors, and all they can do to you is call and leave messages.

    Oh, if I were you, and you want to request info from them... do it ONLY by letter now. If you talk to them on the phone they may later lie and say you made agreements to pay (therefore agreeing to the assignment of the debt to them).
  3. ATM

    ATM Guest

    Sounds great....

    So far it looks pretty good. The SOL has run out. Here in California its 4 years for a promissory note. My last payment to them was in mid 1996 and I still have proof of that and all the notices they sent me back then. I'm certain that they have no judgment against me. However, my credit reports say that it was charged off in 1998. I myself do have the original contract and in the fine print it does state that after a repo they can and will keep the interest running (which was a nasty 23%). So as of a few months ago the letters I get in the mail state I owe American General over 12k now. They first broke that down to 50% of that and then the last offer was 50% of 6k (but with no deletion from credit reports). What do you think? I'm thinking I should send out those letters from Yahoo credit group, on Monday? Thanks again!
  4. Marie

    Marie Well-Known Member

    Go for validation

    Well, Sol applies to last date of activity (and some states have a +/- 180 days). Remember, I'm just a layperson not a lawyer (or this post wouldn've cost you 1,000!!!)
    Ha! You may be close on the sol(over or under)...

    Did you pay after the repo? Or was the repo about then? Do you still have any records proving any of this?

    You might want to make a quick call to a Cal. credit atty and get an opinion on when your state defines when the SOL starts ticking. You could also have them review the validation letters and add to it if necessary. Your debt on this one is so big that a couple hours of atty time would certainly be warranted.

    Regardless, sending the validation stalls them til they prove it (and it actually could help you if they provide info that confirms the sol). They're going to assume you don't even know about SOls, although sending them a validation letter will set them on edge a bit. They don't get many good validation letters. I'd send the nasty one, Michael's original validation letter (He later posted kinder,gentler letters). The nasty one sounds like an atty did it.

    I was reading on that link I gave you that SOL is an ABSOLUTE defense against court action... whereas the other stuff we do are affirmative defenses (not nearly as strong).

    I'd be a bit sneaky. I'd call your original lender and see what info they can give you (be nice over the phone) and then later send a letter (just a normal letter, not a validation) to the original creditor asking for documentation: proof of the sale of the car, copies of the paperwork, original loan agreement too. A letter documents your efforts. Basically, I'd question everything. Get a copy of the account activity including all payment activity and how/when they were posted. It'll help you.

    Then, if you figure out the SOL has run out (and an atty agrees) I'd finish the validation process w/the collection agency. Then send them a letter regarding the SOL. The atty can help you.

    Wait, then see if they pursue. If you're past the SOL and you've asked for validation and they come after you anyway, they're violating the FDCPA, FCRA, yadda yadda. Send all copies to FTC and Cal. ATty general. Oh, then the fun can begin. For every violation you can get 1,000 in our state.. plus, in theory, you could sue them for the full amount of the open contract 12K...

    Right now, stall their efforts, validate the debt, get all the records you can... and hope they've inadvertantly gone past the SOL but I wouldn't mention the SOL to the collection agency if you're not absolutely you're past it. It could tip them off and get them filing a lawsuit when otherwise they might not... This will be interesting. Would be cool if they can't do a thing to you.

    Oh, go ahead and get all your credit reports. If you don't get a letter from the collection agency validating within the first 30 days, on the 31st day after they have received the letters then dispute with the CRAs as "not mine". You can legally do that. They haven't validated so the debt isn't legally yours. Nice, eh! The second validation letter is almost a courtesy... and if the CRAs say "verified" you've set them up for possible damages too (it sets up more harm to you b/c of the collection agencies blatant violations of your rights)... It's just more ammo as to how they're harming you and how you should be compensated... More harms, more likely they'll drop it all and never call you again. Plus, if you ever really did want to file suit, you could.
  5. Marie

    Marie Well-Known Member

    Just reread your letter... and

    You know, if you ask for info from them and they manufacture dates you've got them over a barrel. YOU HAVE your notices!!! You're so smart and so ahead of the game!!!
    Don't admit to anyone that you have your original contract, by the way... just ask for what they have.

    I'd definitely validate and request all info everyone has.. in writing. Ooooh, this could be vacation money for you!!! This may be better than Vegas.

    You have so much to gain on this one. Send the letter and talk w/an atty. If the collection agency tries to bs you on dates you might even get the atty to file and take it on contingency.
  6. kev

    kev Guest


    Hi, I've been reading some of your post off and on the past few days. You seem to be pertty thorough, somewhat knowledgable and persistent. Got any money making ideas
    (/credit related)? Feel free to send an email if convient.
  7. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    I Do Not Completely Agreeâ?¦

    Although Iâ??m sure Marie means well, I do not completely agree with everything sheâ??s advised. From reading all this thread, I canâ??t find any instance where PARC (the collection agent) has, or is at serious risk of punishment for breaking the law. Simply because a state related SOL has run, only means your collection account is stale-dated not unrecoverable. A collection agent may (and often does) attempt recovery efforts long after SOL expirations. Itâ??s a common practice, unquestionably with the law.

    Perhaps what Marie meant is that the collector cannot â??sueâ? (litigate for recovery) if the SOL has expired. However a collection agent can certainly continue collections, irrespective validations that may or may not be sent. You see after the initial contact a collector must send the validation notice. But if you fail to validate on the first round, you may again at some later date. Yet doing so has little stopping affect in real-world terms.

    Also it would NOT be a violation of Fair Debt Collection Practices (or FCRA), were the collector to pursue collection activity after an expired (stale) SOL! This is a common misconception and thus easy to understand why one would suggest otherwise, but such factually wouldnâ??t be the case.

    What youâ??re essentially dealing with here is a Deficiency Balance claim, one clearly under California Financial Code §22328. The original creditor would have had to follow certain guidelines, or waive its ability to collect certain amounts. Case law is sometimes contradictory when considering whether interest is applicable, but in most cases it isnâ??t. You may wish to consider challenging the interest accrued, expressly on the basis of contradicting CFC §22328 (as well as Civil Code §1788, inclusive, against AGF).

    Deficiency Balance collections is a hard nut for the collector. Why do you think AGF sold the asset? They know the likelihood of recovery without engaging litigation is iffy, whereas if your account was getting close to a stale (SOL) date? It would behoove them to cull (sell) the asset while top dollar could be obtained, through a pool sale to an acquisition creditor (in your case, a collection agency).

    Dependant on your personal credit goals, my immediate recommendation would be to let sleeping dogs lay. Let the reporting statute run which isnâ??t all that much longer, about three (3) more years. But if this doesnâ??t fit in your plans, many other solutions can be worked out.

    As it stands now the collection agent has more bark than bite, because the claim has no teeth (if stale). They canâ??t sue (and would be hard pressed even if they could), which is why theyâ??ve offered a discount. Theyâ??ve really tipped their hand, so take advantage of it if waiting for the reporting period lapse isnâ??t in your plan.

    Believe me, since it appears your account is stale. PARC will most likely take 25% of the debt, AND issue a credit reporting redress! Theyâ??ve got nothing to gain by doing otherwise if youâ??re not likely to pay, so consider giving more negotiations a shot? This is often best through legal counsel or an experienced debt negotiator. That is, if youâ??re not skilled in negotiations yourself or arenâ??t familiar with the subtleties of collections.

    Keep The Faith,
    Anthony Villaseñor,
  8. Claudio

    Claudio Guest

    RE: I Do Not Completely Agreeâ?¦

    In that case, just write the collection agency a letter requesting them to stop contacting you. If they can't sue you because of SOL, and they can't contact you as per your request, what else can they do?
  9. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    Good Call, Howeverâ?¦

    Sharp thinking regarding the dispatch of a C&D (Cease & Desist) letter, but this is not necessarily the best tactic. For instance if ATM wants to have the trade removed from his/her credit report, a C&D would only alienate the collection agent. You probably wouldnâ??t be surprised to learn that collectors sometimes do stupid things, just because a consumer ticks them off. A C&D could tick them off, and make matters worse.

    Now if ATM had only six (6) months or so before the end of the reporting period, then yes, a C&D wouldnâ??t hurt at all. So it depends on oneâ??s objectives, not necessarily whether or not a certain tactic is permissible.

    Keep The Faith,
    Anthony Villaseñor,
  10. ATM

    ATM Guest

    RE: Good Call, Howeverâ?¦

    Thank you so much everyone for th input. I really need to get rid of this account asap. It's the only negative thing I have on my reports and I guess you could say I have a lot riding on having clean credit. The thought of getting them down to 25% sounds very good to me now. I'm just trying to figure out if making an offer like that will work or if I should go ahead with the validation letters. Like everyone, I would liek to just see this account vanish once and for all. I'm not going to trust these sneaky guys (PARC) and here's why...They told me over the phone that $3200.00 would be enough for payment in full. Well the last letter they sent me (last week) asked me to pay $3200.00 by the end of the month...whta the letter also states is that, the $3200.00 is for the "minimum amount due of the scheduled payment." I never had any conversation or agreed to this. I had asked what they would settle for if I could pay up and they told me $3200.00 and I told them I would get back to them, end of story.
  11. Marie

    Marie Well-Known Member

    Will you pay a debt you don't

    Well, I'd still say start with the SOL. If it has expired, they can't do a thing to you except try to keep a negative entry on your reports.

    If it's expired and you want to pay them anyway... I'd say that's crazy. Unless you're applying for a jumbo mortgage and that one negative entry is going to cause you a much higher interest rate (hence, the 3200 is worth paying) then I'd think you could get them down lower... If the SOL has expired, the only thing you're paying them for is to remove the credit bureau entry... not for the debt (which is against their contract with the bureaus, by the way).

    If you want to do nothing with the collection agency you certainly can let them sit.

    And while you do nothing, you can always dispute the credit entry with the bureaus and roll the dice, hope the collection agency doesn't verify.
  12. Marie

    Marie Well-Known Member

    I did mean can't sue...:)

    Good points. When I say they can't really come after you I mean can't litigate (if the debt is stale). If they did it would be stupid, unless they count on you not showing up and hence them getting a deficiency judgment.

    Since you seem very familiar with dealing with stale debts, in Cal (or any other state by the way) is there anything really stopping them if they know the debt is stale?

    For example: ATM gets confirmation that the debt is indeed stale. Doesn't he only have to send a cease and desist to get them to permanently leave him alone? While that deals with the actual debt, it deosn't deal with the corresponding credit report implications...

    If his goal is to deal with the credit report implications (especially if the debt is indeed stale)... then he has a couple of choices.

    If he requests validation, and he receives none, he can in turn send a series of letters asserting his rights (FDCPA (809) validation).

    Then, by daisychaining statues, if the debt is not proven to be valid, then the collection agency is not knowingly in violation of the FCRA.

    ATM now has a trail proving he has requested validation, has received none (or not legally binding validation), and he can stipulate damages that are now "knowingly, willfully" being inflicted upon him via the collection agency by continuing to report info that is erroneous.

    If the agency doesn't validate, it's as thought they've just made up a debt and are using his credit reports to blackmail him into payment... which is what they're doing (without completely making up the debt, course).

    While nobody wants to litigate, stipulating the harms will often times back collection agencies off. Especially if the CRAs, the FTC, and in my state, the state's atty general are copied on the letters. The FTC has at least been fining collection agencies lately (Perimeter, for example) for flagrant violations.

    I think I sometimes won because I wasn't going to back down, I had some knowledge of my rights, and even if my approach was shotgun... within all the letters I did actually hit some valid points which made them aware that it'd be better to go after the suckers who don't even know their SOLs have expired.

    As an aside, maybe I'm also a bit idealistic. If I caught a collection company blatantly ignoring the SOl, not validating a debt, and still pursuing me, I would sue the *&^$# out of them. If for no other reason, to provide a case (case law) that might help others after me. I'm tired of the bankers, collection agencies, credit bureaus et al flagrantly violating our rights and getting away with it because it's cheaper to pay off 1 person who actually catches them than to actually follow the laws that were intended to protect all of us.

    Regardless, ATM should do what's best for him. that's really all that matters :)
    I just would hate to see him spend 3200 to get his credit cleared. Sounds a bit expensive to me for one item. and if the debt is stale, that's what he's doing.

    Just try clearing the credit first.
  13. Marie

    Marie Well-Known Member

    RE: To:Marie

    Appreciate the sweet offer. Actually, the funny part of all this is, my stuff is almost clean and I hate fighting with collection agencies/ credit bureaus. I find it somewhat disgusting how flagrant the abuses are... besides, I have a great career that I truly enjoy. But thanks a lot. :)
  14. Marie

    Marie Well-Known Member

    They're trying to say you've g

    You other guys pipe in here, but I just reread this and they're trying to say you've agreed to a novation (a new deal) with them.

    By the way, just for reference (and it's in a lot of posts here and elsewhere) A paid collection account is just as harmful as an unpaid one. Your fico/ beacon/ empirica scores will not go up one bit for a "paid" status on your reports. The only thing that would change your scores would be a complete removal.

    Should he completely ignore this letter? Or should he respond and negate it saying he has never agreed (course, if the novation isn't in writing and handsigned by both parties I don't think it matters anyway).

    Here's the other kicker, if you pay, then your Paid date is your last day of activity. Your 7 year clock starts over again if they haven't removed the trade line completely. Which means: you could pay them 3200, they don't remove the tradeline (because a lot of times they say that violates their contract w/the CRAs... which it does).

    They get your money for a debt you don't owe, they update the status to "paid" 2/2001 and you eat the entry now until 2/2008. Paying a collection without FIRST getting in writing that , if you paid a negotiated settlement the tradeline will be removed, actually HURTS you.

    They'll tell you they'll remove it but they can't sign anything agreeing to the removal... but just trust them. And then you'll really get screwed.

    Just a friendly warning. I had this happen to me. 3 years later I ran across the validation thing, did it, and the tradeline was removed. I requested validation not because the debt was outstanding but because I wanted validation for their entry on my Equifax report...

    I just wanted to make sure you had all the scenarios before taking action.

    By the way, have you even tried disputing directly with the bureaus as "not mine"? that works a lot w/collection agencies because they normally don't rereport your account every month... it's normally a 1 time deal
  15. Marie

    Marie Well-Known Member

    Did you get notice of intent?

    Did the original creditor send you notice? Do they have proof they sent you notice? If not, you're not liable for the deficiency anyway.

    "If a borrower receives notice that the lender intends to dispose or liquidated the collateral, after repossession, they are liable for a deficiency balance (Cal. Financial Code §22328). Although if the creditor cannot prove that its denial of a borrower's right to reinstate (pay what is owed and redeem the collateral) was reasonable, the lender is not entitled to the deficiency balance. Further more, the amount recoverable is limited to any excess (or balance) remaining on the debt."
  16. kev

    kev Guest

    RE: To:Marie

    What career is that, if I may ask, just wondering?
  17. ATM

    ATM Guest

    RE: Did you get notice of inte

    Marie: When I last disputed the account with all 3 CRAâ??s (on both my files and my mothers) they all came back as verified. When I did this, there was no collection agency involved yet.

    So many options here and Iâ??m not sure which one I should take. I figure I am going to attack this one way or another starting this week. Like you Marie, I can be very ambitious and I wonâ??t give up until this account is nuked one way or another. I canâ??t afford to wait it out even another years as I have so much riding on my credit worthiness in the eyes of lenders.

    Marie, I was wondering if it might be possible to view the letters you had created for your creditors? If you no longer have them then thatâ??s okay, but I thought it might help guide me in taking bits and pieces and creating the right letter for me to use.

    The mirror site link you mentioned doesnâ??t seem to come up. I have been spending time on the Yahoo credit group and still trying to find the info you spoke about in regards to explanations for each of the letters.

    I keep reading all these posts and hearing about people getting things deleted and Iâ??m happy for them allâ?¦yet here I am with just one account and itâ??s causing me so many problems. Iâ??ve learned my lesson and will not ever default on another loan againâ?¦having bad credit, as you all know, REALLY suck! lol
  18. ATM

    ATM Guest

    Anymore info Marie or anyone?

    I'm planning to write a letter tonight and FedEx it to the collection company tomorrow morning. Thanks! BTW, I posted on the Yahoo board, but no response so far :-(

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