My debt was sold to a collection agency. Now the original lender contacted me again

[rae]

Hi,

I have been out of work and a starving student for the last 3+ years. My job was outsourced. I searched for work diligently, but was unable to find something in my field, so I finally went back to school. My credit card debt has not been paid on in over 3 years. After I lost my job, I paid for it for a year and a half. But I finally ran out of savings.

I told them at the time that I was out of work and had no money to pay them. After about a year, they sold the debt to a collection agency who contacted me. Since that time various collection agencies have contacted me. I still have no job, but I just graduated. So maybe they think I will get one?

Does anyone have any experience with the original lender contacting them? Why would they contact me again if they have sold it? Or maybe they never really sold it and those other collection agencies didn't really have the debt like they said they did?

My plan is to get a job in my new field and contact them about a settlement. But now I don't know who really owns the debt.

Any advice would be much appreciated.

[treehugger1]

It does not sound as if your debt was "sold." Call the original creditor and ask them who has the debt. I've done this many times. I have never had a creditor fail to answer my question.

I should add that all of my accounts that have been sold, the original creditor reports $0 balance on those accounts. I don't know if this is common, but it is the case for all of my debt that was sold. The buyers (Junk Debt Buyers) occassionally show up as "factoring" companies or appear as creditors on my credit reports. I could give a shit less.

[rae]

Thanks. I'll check my credit again to see if the original creditor is listed as zero. For a while, more than one company was listed, but supposedly that's been taken care of. I got a letter from a collection agency two years ago that said the debt had been purchased. It's bounced around to several different collection agencies since then. So that's why I'm surprised to get something back from the original lender. I'll have to check on the "factoring" companies. Currently, one of the collection agencies is showing up as owning the debt on my credit report.

[rae]

p.s. Northland supposedly owns it. I heard they were a junk debt buyer. There are a lot of complaints about them online.

[pepperoncini]

p.s. Northland supposedly owns it. I heard they were a junk debt buyer. There are a lot of complaints about them online.

Northland called me this week about a Target accout that we stopped paying on just last month. I was wondering if they are collecting on behalf of Target National Bank...?? The account is NOT charged off yet and we're only about 45 days late at this point...

[catleg]

There are a couple of different Northlands, if I recall correctly. It is not uncommon for a CA to be associated with a JDB. But just because the CA called it does not mean they own the debt. (necessarily).

Incidentally in my ch13 case, Target held onto its debt and filed a proof of claim but then very shortly thereafter sold it to Roundup Funding LLC out of Seattle. Target's credit card receivables are 50% owned by Chase. (I think).

[epiphany]

I have never been able to get clarification to this but during my bankruptcy I was given the impression by one CA that they were able to return the debt to the OC.

I told this CA that I was filing bankruptcy and they wanted to know which chapter. At that time I was pretty green and wouldn't tell them..told them to talk to my lawyer (I was filing a 7 so it wouldn't have mattered if I told them) and the agent told me that if I told him, then he could just send the debt back to the OC right then.

Don't know if he was blowing smoke (although to what end I can't see) or if he was really able to do that. I'd love to know the answer.

ep

[rae]

Hey Epiphany, would it have made a difference in your case if the original creditor had gotten the debt back? That's what I'm trying to find out. Is it more likely that an OC would discharge the debt? I would think a collection agency would be more likely to hire a lawyer to try and sue than to charge it off because they paid for the debt. But I'm not sure if it makes a difference who owns it. i was just so surprised to hear back from the original creditor after not having heard from them for 2 years.

[treehugger1]

Epiphany, The question at hand refers to debt that has been purchased. I have had accounts sent to CA's only to be sent back to the OC's a dozen times. I have not had any accounts that were SOLD returned to the OC.

I see a lot of confusion related to assignment versus sales of debt on the web.

It is the sale (and purchase) of debt that can be confusing on one's credit report. For instance LVNV ( a true junk debt buyer) will purchase debts and report to one's credit report as if they had some original contract. The "open" date of the account is generally very recent when compared to the open date of the OC who sold the debt. The JDB's do this because quite simply they get away with it. On the other hand, in a court of law, one could require the JDB to show proof of the original debt. This is important for the consumer to know in that the SOL refers back to the original debt and OC. I suspect this is why a JDB will not always pursue their lawsuit when an answer is filed that refers to the true SOL.

On the other hand, I see many lawsuits brought on by collection agencies and/or collection attorney's who DO NOT OWN the debt. I would guess they know they are operating well within the SOL.

Again, I seriously doubt a OC will buy back a debt that it has officially SOLD. That would be insane. If someone knows of a case where an OC bought back a sold debt, please post it with appropriate references for all to read.

[rae]

So it sounds like the letter I got from the CA was very misleading. They said they had the account now, and implied they owned it and I was not to mail payment back to the original lender. But I'm not sure they ever said outright that they owned it.

[rae]

p.s. I know they never said they were "assigned" it, though.

[pepperoncini]

Why should one not tell a CA that they are filing for a BK13?

[catleg]

Why should one not tell a CA that they are filing for a BK13?

No reason in my opinion. But it won't stop them from calling. So therefore why bother telling them anything?

[epiphany]

Thanks Tree. I had no idea there was an "assigned" status. Thought they all were sold so that clears it up for me.

I have no idea if it would be harmful to tell a CA of your intent to file BK13, except that then maybe they would still pursue you because they figure there are some assets there.

Catleg, I beg to differ. Of my 20 plus creditors (some of them CAs) that I told I was filing, all but two stopped calling me and it was a huge relief. Cap one was even reporting four accounts discharged on my credit report before I had actually filed.

ep

[epiphany]

Hey Epiphany, would it have made a difference in your case if the original creditor had gotten the debt back? That's what I'm trying to find out. Is it more likely that an OC would discharge the debt? I would think a collection agency would be more likely to hire a lawyer to try and sue than to charge it off because they paid for the debt. But I'm not sure if it makes a difference who owns it. i was just so surprised to hear back from the original creditor after not having heard from them for 2 years.

It would have made no difference to me. I was filing BK. But this stuff is pretty unpredictible. There's no script that creditors follow and everyone's experiences are different.

It sounds like your OC hired a CA to collect for them but that CA was unsuccessful and maybe called off. Not sure what you mean by it being more likely that an OC would discharge the debt. The only way it is going to be discharged is in bankruptcy.

Or did you mean charged off? If and when they do charge it off, it will be sold if it's still salable. You might also want to look up the SOL for collecting a debt in your state if it's already been three years since your last payment. You might be hearing from the OC because you are nearing the sol (four years in some states) and this is their last chance to collect.

I've been brain dead, I know what tree is talking about when he says "assigned" debt. And he's right...it's hard to tell the JDBs from the CAs.

ep