Thoughts on Strange DV reply

[treehugger1]

Here is the summary so far.

I had some accounts with CAP1 that charged off. These accounts went to the standard national CA's such as Allied, NCO, etc. I DV'd all of them and eventually the accounts were assigned to a collection firm upstate. I again requested DV and also a cease and desist request. Today, I received verification of the debt from CAP1, and a letter suggesting I call them to discuss reasonable payment options.

I have some questions?

Should I assume the third-party collector (law firm) is no longer a player? Under the FDCPA, the CA is responsible for sending the DV to me. Has CAP1 retracted the debt from the law firm?

What I find interesting is that CAP1 included a statement in their letter that they will honor my cease and desist phone communication request. Well, I never sent a DV or C&D to CAP1. I've only applied the C&D to the CA's and collection law firms. What is going on here?

Should I give them a call and see what they are thinking? They are the OC. I also know that CAP1 waits a long, long time before they sell any debt and they seem to prefer to assign debt.

Any thoughts on this?

[treehugger1]

Thanks, BB. After thinking about it this morning, I woke up and wrote a letter with a proposal to the address listed in the package. My proposal is 100% of the original amount at first default (30 days; no late fees, 0% interest,etc) to be paid in 60 equal installments. I'll even mention that this is a better deal then they might get in a BK 13. I do not intend to call them, but the cost of a stamp is worth seeing how they respond. In my state, the only thing that re-sets SOL is a payment. This particular account is not all that big <$2000.

[AngelinaCatHub]

Thanks, BB. After thinking about it this morning, I woke up and wrote a letter with a proposal to the address listed in the package. My proposal is 100% of the original amount at first default (30 days; no late fees, 0% interest,etc) to be paid in 60 equal installments. I'll even mention that this is a better deal then they might get in a BK 13. I do not intend to call them, but the cost of a stamp is worth seeing how they respond. In my state, the only thing that re-sets SOL is a payment. This particular account is not all that big <$2000.

I advise you to not contact them but list them in your bk13. The damage is done already regarding your credit to them. Also a payment outside of the plan is preferential and you could complicate your bk.

Any debt incured after your plan, you can pay, but this one is before your plan. 'Hub

[treehugger1]

ACH, At this time I am not intending to file a formal BK for reasons I have stated elsewhere. My process has been quite informal and I am now down from 20+ unsecured accounts to 10 unsecured accounts. One of these BOA, just gave me a great 0% five-year payoff plan. I had this with BOA last year but got in a bit of a jam and they refused to rewrite the plan. A few weeks ago, they changed their minds and gave me the new plan.

As small claims, legal action comes up, I deny everything except my name and address, and attempt mediation of the debt through teh local court systems. So far, this has been acceptable to me. The 9 remaining accounts are all big financial players and they are incredibly difficult to deal with. You would think they would want their money, at least the principle. But, nope.

[treehugger1]

Update - Phone Call

Thanks to all for insights. I called CAP1 this morning and here is what happened. These two accounts are not the same accounts that went to the law firm. Still waiting for DV on those accounts.

1) I was speaking with their "recovery department."
2) First they said they could not speak with me as I sent a C&D request. I told them the C&D's went to NCO, and not CAP1. After a few minutes, I convinced them that I have no C&D with CAP1.
3) These are two accounts that are small; one with a balance of $850 and the other with a balance of $1500. The representative offered close to a $1700 settlement on the combined accounts but wanted the payoff over 3 months.
4) I said, NOPE! But, I was willing to pay them in full over 40 - 60 months. No interest, etc. They said that the only way they would do a longer payment was over 10 months at the current full amount owed. I said, no, and I'm sorry we can't work something out. Have a nice day.

Bottom line is that this is no different than what they were attempting 18+ months ago. They apparently believe that whatever collections/business model they are currently using is the one they are staying with.

On these accounts they were unwilling to take approximately $60.00 per month for 40 months. This is only a timespan of 3 years and 4 months. You would think that these guys must believe economic recovery is right around the corner, and they'd rather gamble that getting $2350 repaid to them in 40 months is not in their best interest. Keep in mind that they have not received a dime from me in 6+ months! I'm laughing so hard right now, I'm in tears. What a bunch of goofballs.

[OhioFiler]

Well what is stupid is that you only owe $2550 at this time. Best they could get selling the debt is maybe around $250 on a really good day. But yet, even if they got one years worth of $60 a month payments they would have made 2x more than if they sold it. I am not sure what hanging on to this debt gets them either. Sure it get more interest, but then when it does come time to settle that gets reduced, like they did this time. And more interest is only "good" if you collect it.

The part I don't understand right now with lenders, if they just worked on getting the principal back and not worry about interest or fees there would be a lot more work outs.

No, the only people to offer me what I considered fair settlements was BoA and it was so fair I was almost ashamed I didn't have the money to pay it off. No wonder we are so screwed in this whole financial mess. No one wants to take a little something over a longer term. Its an all or nothing deal almost.

My guess is banks look at the cost of setting up a longer term interest free collection cycle coupled with the tax loss associated with not writing off a receivable against the value of the collection itself.

If I as a bank, write off a receivable today for $25,000 I reduce my taxable income by $25,000 saving federal taxes of approximately $7.500. I can invest that $7,500 immediately in an income producing investment rather than wait for 60 months to see IF you actually make the promised payment.

Also, we tend to look at these anecdotal cases on their owm merit. The banks are applying policy based on ten of thousands of delinquent accounts and I'm sure overall the statistics favor the decisions they make even if the decision seems unreasonable for any given case.

[StartingOver08]

Or, maybe the banks are not as hungrey now...after all they have the TARP funds and no accountability....why should they have to 'work' for your money

[treehugger1]

I rest my case. It clearly appears that the financial institutions are not some Gods of finance. If their models are so effective, then why on earth are they in line at the trough? LOL