Almost done.....but

[crazychristo]

My wife and I filed Chapter 13 9 months ago but the payment ordered by the trustee was very high. We allowed the BK to get dismissed and began working with our creditors to settle our debt. We worked extremely hard to negotiate and settle each of our credit cards. Citi ($12,000 on $32,000) AMEX ($4,000 on $16,000) HSBC ($200 on $800) and a few other small accounts. We also received a settlement offer on two BOA accounts ($6,000 on $22,000). We almost had enough to make the one time payment and be done with all credit card debt when we received letters from Portfolio Recovery Associates LLC saying they purchased our account. When I called them they were unwilling to settle for any amount and they are charging us a huge amount of interest and fees. Can anyone give me some advice???

[falken]

when we received letters from Portfolio Recovery Associates LLC saying they purchased our account. When I called them they were unwilling to settle for any amount and they are charging us a huge amount of interest and fees. Can anyone give me some advice???

I would make a reasonable offer, put it in writing along with a cease and desist. Tell them they are only allowed to contact you by US Mail for the purpose of accepting the offer. Kind of a "this or nothing" tatic.
I have had several portfolio accounts, they have always sold the account right after a c&d letter. If nothing else, maybe the next group will be more willing.

[StartingOver08]

Portfolio Recovery rarely has the information they need to prove you owe the debt.

I would not even make a reasonable offer to them, just DV them. Go to this site for more detailed info on how to handle Protfolio Recovery (and other nasty CA's): www.creditinfocenter.com

[splinter]

Give them a hard time and make them jump through every hoop and make them prove and comply with everything and maybe they'll go away. But if they want to push it, they can sue and get a judgement against you for the full amount plus legal fees. Allowing your BK to be dismissed is risky. I'm surprised B of A didn't offer a better deal. I was offered 15% on my two highest balances of around 8k apiece. But this was from 2006. So with interest and fees, they're probably around 15k apiece now. But I'm filing Ch7 next year, so I'm not paying anything.

[LuciluS]

Making Settlements on a Credit Card Should be settled with the Credit Card, INMHO. Make sure everything is in writing and states no further collections on specific credit cards as the CC company could sell the deficiency.

I received a letter, yesterday, from a Collection Agency on a deficiency of a Motorhome we voluntarily surrendered in late Nov. & was sold at Auction in Dec. The original creditor has stated this is an error on their part. Dummy me didn't get such in writing. However, we are filing BK in 9/09 so CA doesn't really have time to file suit, get judgement and serve me.

Also, the deficiency of each credit card will be Income on your 2009 tax return. It doesn't matter if they don't send you a 1099. You are required by the IRS Laws to report it as Income Unless you can prove your were Insolvent at the time of each transaction occurred. As a Disabled Accountant, INMHO, there is no way to prove insolvency on each transaction date as you had money to pay.

[crazychristo]

My wife and I have decent salaries but we have no real assets. We lease a vehicle and are upside down on two mortgages. The chapter 13 was requiring us to pay $2400 a month for 5 years.

[BigJohn]

You now are a prime target for your creditors, they knew you were in a CH13 and now you are not. Most will not really deal with you for the reason they know you have income and assets. If you were able to file a CH7 you would have and they know this. So now it is blatantly obvious to places like Portfolio Recovery what you are doing. So they are going to hold out for all of it.

This is nothing new, you kind of boxed yourself into a corner by leaving the CH13. This is the epitome of why when people come on this board ranting about the joys of debt settlement you get strongly cautioned against it. For the exact reason of what has happened to you.

So for the advice, have you paid the other creditors yet? I can't imagine the settlements you struck with your other creditors was less than you would have repaid over 60 months in a CH13... You show around $24,000 that you are settling your debt for, that would be about $400 a month for 60 months, what was the amount of total debt in the CH13 and your monthly payment?

Also if Portfolio Recovery bought one of your debts they had to have bought it since you have been out of the CH13 so you have been out of the program for at least several months. The OC cannot sell the debt while in the CH13 unless the Trustee approves.

Anyways, you are kind of stuck if you have settled with the others and now have this hanging over your head. You simply have two choices. One is to pay them off for what they want and the other is to wait for them to sue you and then defend against it. You probably stand a reasonably good chance of being able to win a case against them.

If you have no settled with the others I would see about re-filing your CH13 and this time completing it. You simply only pay what you can afford to pay based on your schedules. So you clearly have income and assets and I would be more worried about those since now you are a sitting duck.

We had about a half dozen original creditor debts sold to such companies as Portofolio Recovery Service after we filed chapter 13.

I brought this up on the board and it seems creditors can sell debts to whoever they want without permission.