Skeletons coming out of closet, now what do I do ??

[werebroke]

It has been 3 years since our chapter 13 was dismissed (we could not afford the steep payments).
The first year was pretty quite, then we started getting calls from debt collectors. I believe most of our creditors have sold off our debts. Currently we are making small payments to two debt collectors, renegotiated every 6 months. Now we have received a letter from PYOD LLC. stating they will settle my account for 25% of the balance.
This would be $6711. I wish we had that money to settle but it would completely wipe us out of everything.

The letter goes on to state:
Unless you notify us within 30 days, after receiving this notice that you dispute the validity of this debt or any portion thereof, we will assume the debt is valid. If you notify us in writing with 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, we will obtain verification of the debt or obtain a copy of the judgment and mail you a copy of such judgment or verification. If you request of us in writing within 30 days after receiving this notice, we will provide you with the name and address of the original creditor, if different from the current creditor.

We are a debt collector attempting to collect a debt and any information obtained will be used for that purpose.

The law limits how long you can be sued on a debt. Because of the age of your debt, PYOD LLC will not sue you for it, and PYOD LLC will not report it to any credit reporting agency.

Minnesota Residents: \This collection agency is exempt from licensing under Minnesota law as a debt purchaser."

So now what ??? It flat out says they will not sue us. Should we contact them and try and set up payments ??
Not sure what to do, anyone have ideas ?? FYI (it is unsecured credit card debt).
We are getting annoyed with the phone calls and renegotiating every 6 months and are contemplating filing chapter 7, but doubt we would qualify.

[LadyInTheRed]

I am assuming this is not one of the debts you have been making payments on.

It sounds like the statute of limitations has expired on the debt. Do not start making payments because that probably would restart the statute of limitations (depending on state law). I wouldn't settle. If the SOL has expired, they won't be able to get a judgment against you as long as you answer any lawsuit by asserting the SOL defense. It sounds like they don't even intend to sue you, but that doesn't prevent them from selling the debt to somebody who will. Use caller ID to screen their calls.

[werebroke]

LadyintheRed, thank you for your reply !! Indeed it is not a debt collector we have been paying. I don't believe the SOL has expired, I think in Arizona it is 6 years and it has only been 3 years. (we moved from AZ to Minnesota 3 years ago) But all of a sudden we get this letter. My wife has thicker skin than I and wants to avoid and not reply at all. It does seem that 3 years has passed and time has been on our side.

[LadyInTheRed]

Listening to your wife is almost always a good idea. Ask my husband.

The terms of the credit card agreement may specify that a different state's laws apply. I read that Bank of America, Chase and Discover credit card agreements all provide that Delaware law applies, which has a 3 year SOL. They could still try to sue under another state's laws, but you can argue that the 3 yr SOL applies. How successful that argument would be probably depends on the laws of the state where you are sued.

If you don't have the money to settle all of your debts and get your creditor's off your back, I'd either wait them out or file BK.

[frogger]

The law limits how long you can be sued on a debt. Because of the age of your debt, PYOD LLC will not sue you for it, and PYOD LLC will not report it to any credit reporting agency.

To me, this sums it up. You should do exactly what they do. Nothing.

[bcohen]

It's a trap. They want you to either make "good faith payments" or enter into a payment agreement--either of which will reset the SOL in your state. Then, they can and will sue you for the full amount Ignore the letter, DO NOT pay anything, DO NOT agree to pay anything, and DO NOT communicate with this debt collector in ANY way!

[AngelinaCat]

^^^^^^ I second, third, and FORTH the above motion.

[keepsmiling]

I read that Bank of America, Chase and Discover credit card agreements all provide that Delaware law applies, which has a 3 year SOL. They could still try to sue under another state's laws, but you can argue that the 3 yr SOL applies. How successful that argument would be probably depends on the laws of the state where you are sued.

Very good to know, I had no idea. NJ's SOL is pretty long but this might overrule it. Thanks LITR for mentioning.

[werebroke]

Good Info, so there seems to be a consensus that I should not even send them a letter to validate that I have any debt with them?
It makes me nervous just to ignore it, but my wife is pretty convinced to ignore it.