Questions on letters from debt collectors + can they sue you?

[AZGuy23]

I was reading through the "sticky" on here on how to deal with zombie debt and one of the tips said...

"� Do not negotiate with collection agencies. You owe nothing to them unless you signed a contract with them. If you intend to pay off the debt, contact the original creditor and make arrangements exclusively with them. In all likelihood, the debt was charged off by the creditor, and they will not take an interest in recovering it. If it is charged off, you are free from that burden. Pen a cease and desist to the collector, citing the Fair Debt Collection Practices Act and advise them that further action will result in your pursuit of legal recourse against them.[2]"

How does this play into being sued by a collection agency? Are they allowed to sue you...or can only the original creditor sue you? If the debt was charged off and sold to a collection agency, what legal right does that collection agency have to the money?

Second question is...what is the correct process of dealing with a collection notice? I received a letter from a collection agency offering me a settlement for a debt I had with Sprint. It says that if I do not agree with the debt, I must notify them within 30 days...should I do that or should I ignore it? Additionally, I don't know how old the debt is...it's from at least prior to Feb, 2007 (I have another letter from a different collection agency who was trying to collect on it back then).

[AZGuy23]

To clarify a little, the debt with Spring seems to be from 11/2005, well past the SOL. Should I reply back with a letter stating that the debt is past the SOL or just ignore it?

[bcss]

As I understand the the debt buyer has the same rights as the original creditor. If it's really past SOL tell em to go pound sand. You could ask for for verification, they probably don't have anything. Don't pay anything, you'll restart the SOL.

[AngelinaCat]

Do not say anything in the affirmative to the Junk Debt people, as they are probably taping you if you are talking to them, (such as: "is it a nice day there?" as an offhand question) and will edit the tape to make it seem that you reaffirmed the debt.

Go check out GoingDown's signature. That contains all the info you need to send to a Junk Debt Buyer.

[AZGuy23]

I have actually not talked to them on the phone, the collection attempt came via a letter in the mail. I'll check out GoingDown's signature for more info.

[GoingDown]

To clarify a little, the debt with Spring seems to be from 11/2005, well past the SOL. Should I reply back with a letter stating that the debt is past the SOL or just ignore it?

I'm just going to quote myself on this one...

Speaking from experience, I have a LOT of debt that is beyond the Arizona Statute of Limitations.

NONE of my SOL creditors nor my SOL junk debt buyers have ever sued me.

I think it is exceedingly rare for a creditor or a junk debt buyer to sue someone over debt that is beyond the statute of limitations.

You can help to make sure that they don't sue you over SOL debt by sending them a cease and desist communications letter that says something to this effect...

"Cease and desist from any communication with me.

The Arizona statute of limitations has expired. If you file a lawsuit against me, I will fight it in court, and I will win, and I will ask the court to make you pay my legal fees and court costs, since I have now notified you in writing that this matter is time barred by the Arizona statute of limitations."


[PLEASE NOTE THAT I NEVER USE THE WORD "DEBT" IN MY LETTERS]

If I was a junk debt buyer or a creditor or a debt collector, and I got a letter like that sent by certified mail, I would throw that account in the inactive file and not waste any more time, money, or effort on it since I would figure that I would never get a penny from that person.

And here's some encouraging news, out the many, many credit cards I defaulted on, I never paid any of them one red cent. Not even the one that sued me. And they sued me about 4 months after I defaulted, not after the SOL expired. And to this day, they have never received even a penny from me, and they never will.

So, my point is this... SOL debt rarely sues, and can be fought in court and you can win, and simply ask the court in writing as part of your written defense to the lawsuit to award you court costs and any reasonable legal fees, and they will grant it to you. The creditor cannot overcome the time-barred defense against a lawsuit, if you file a written answer using it as your defense.

In my opinion, filing BK over SOL debt is a waste of time, money, and effort, and you can't file bk again after that for a certain period of time. I'd rather save that nuclear option for a later date when I really needed it, against someone who could actually sue me and win. Not against creditors who can't win a lawsuit against you, and most of the time, once they know you will fight them in court and they know that you know you will win, they lose interest in you.

They always go for the low hanging fruit. They have bills to pay themselves and if they waste all the time on someone who is not going to pay them anything, they will go out of business.

[LadyInTheRed]

AZGuy23, the quote you took from the sticky is not correct and has been deleted from the source article. I just posted in that sticky why it is incorrect.

[AZGuy23]

AZGuy23, the quote you took from the sticky is not correct and has been deleted from the source article. I just posted in that sticky why it is incorrect.

Thanks LadyInTheRed for clarifying.

[AZGuy23]

I'm just going to quote myself on this one...

GoingDown: Do you include a copy of the collection letter with the letter your write them? Or just put your information (name/address) and account number on the letter?

[GoingDown]

GoingDown: Do you include a copy of the collection letter with the letter your write them? Or just put your information (name/address) and account number on the letter?

I would just write it like this...

[the date]

[your name]
[your address]
[your phone number if they are already calling you on it]

(I leave the account number out of the letter, since junk debt buyers usually use a new account number. You have already given them sufficient information with which to identify the account.)

TO: [junk debt buyer or creditor or collection agency name and address]

Cease and desist from any communication with me.

The Arizona statute of limitations has expired. If you file a lawsuit against me, I will fight it in court, and I will win, and I will ask the court to make you pay my legal fees and court costs, since I have now notified you in writing that this matter is time barred by the Arizona statute of limitations.

Sincerely,
[your name printed by a computer. never sign anything you send to a debt collector]




That's it. That's how simple it should be.

If I was a debt collector, and I got that letter, I would give up on this account. You've taken away their main way of getting paid-- calling you on the telephone. You've also taken away their second way of getting paid-- filing a lawsuit against you, since they now know you will fight them and win, and all they will end up doing is paying legal fees and court costs-- theirs and yours!

I am speaking from experience. In all the years since I first defaulted on my many credit cards, NONE of them have sued me past the 6 year SOL for written contracts. NONE OF THEM! And I had a lot of credit cards. This includes my old credit cards I got back in college in the 1990s.

The 3 year SOL in Arizona was debatable even before the new law changed it to 6 years. I'm talking about the 6 year SOL for written contracts, and now for credit cards under the new law. None of my credit cards that made it past the 6 year SOL have filed a lawsuit against me.

I think my letter definitely helped. They don't want to throw good money after bad.

One thing I do advise, is that when you first get a 30 day debt validation letter from a junk debt buyer, send them a DV letter first, before you send them a C & D letter, in the hope that they will send you a letter which states the date of last payment. Most of the ones I received from junk debt buyers included this information, and you can save that letter back as evidence to use against them later.

The DV letter would look like this...

[the date]

[your name]
[your address]
[your phone number if they are already calling you on it]

TO: [junk debt buyer or collection agency name and address]

I dispute the validity. Please send me written verification.

It is inconvenient for me to receive telephone calls from you at any time and at any location.

I revoke any prior authorization you may have had to call my cell phone and I demand that you never call my cell phone number.

Sincerely,
[your name printed by a computer]


That letter sets them up for FDCPA and TCPA violations, and hopefully, if they respond in writing, they will state the date of last payment in their response letter, and you can use that against them later if they attempt to file a lawsuit against you beyond the 6 year SOL.

[alo]

Going Down, I have now missed three payments on my CCs and have started receiving the initial letters from collections agencies (no aggressive calls to me or my neighbor, yet). I guess I thought the CCs would spend more time with their internal collection department attempting communication with me before handing it over. This may be because I didn't answer phone calls.

I don't plan to file BK for 4-6 months. Do you think the Debt Validation letter should be sent to them? Any other ways to distract them from filing suit against me before I file?

Thanks.

[GoingDown]

Going Down, I have now missed three payments on my CCs and have started receiving the initial letters from collections agencies (no aggressive calls to me or my neighbor, yet). I guess I thought the CCs would spend more time with their internal collection department attempting communication with me before handing it over. This may be because I didn't answer phone calls.

Actually, it is fairly common for the original creditor to start handing 3 month old accounts over to third party debt collectors. They don't care whether you answer the phone or not, it is based on how long your account has been in default. In just 3 more months, they will "charge off" your account and at that point, they will often sell it off to a junk debt buyer, or if they think you are a juicy plum (easy to garnish wages from, etc.) they may begin the lawsuit phase at that time.

I don't plan to file BK for 4-6 months. Do you think the Debt Validation letter should be sent to them?

Yes, start off with the DV letter, which will at least shut them up for awhile. They're not supposed to call you until they respond to a DV letter in writing. They will probably not answer the letter at all, they will just send the account back to the OC and then they will send it to a new collection agency, and the phone calls will start back up.

And the letter is as simple as this...

[Date]
[Your Name]
[Your Address]
[Your Account Number]
[The phone number they are already calling]

TO [Collection Agency Name and Address]

I dispute the validity. Please send me written verification.

Sincerely,

[Your computer printed name-- don't give them your signature]

That's all there is to it.





Any other ways to distract them from filing suit against me before I file?

Thanks.

If you will be filing in 4 to 6 months from now, it should not be a problem. The DV letter process will take up some time for them as they shuffle the debt back forth between new collection agencies, and they are unlikely to file a lawsuit against you in the next 4 to 6 months anyways. They do a lot of posturing and threatening before they actually file a lawsuit in most cases, unless they are Capital One.

And even if they do file a lawsuit before then, you can simply file a written answer with the court and make a motion for continuance, and extend the time out before they get a judgment for a long time-- way past the 4 to 6 month period before you can file Bankruptcy. Then once you file bankruptcy, you merely notify them that you filed bankruptcy, and the lawsuit can't move forward. Then get the debt underlying the lawsuit discharged in the bankruptcy process, and then the lawsuit is toast, before they ever get a judgment against you.

So, don't worry about it.

It goes without saying, I hope, that the less you talk to them on the phone the better. The less information they get from you, the better.

If you feel you must talk to them, to keep them from calling relatives or neighbors, merely identify yourself on the phone, so they know they are calling the right phone number, and then tell them to put everything in writing and send it to you in the mail, politely, and then hang up the phone.

Oh, and I forgot to add, if you are judgment proof-- no significant assets, no wages to garnish, no checking account to seize, no real estate to put a lien on, etc.,-- I would add that to the letter, so they know you might not be worth coming after with a lawsuit anyways. I personally think it helped to keep most of my creditors from suing me.