Can someone please tell me if this a good letter to send to Collection Atty

[mdl]

Below is a letter I wrote for my son in response to a letter from a collection attorney. I need to send it off today, so if someone could tell me if it looks good it would be appreciated! TIA!

Dear Sirs:

Please be advised I am in receipt of your letter dated _______________, received _______________.
It is apparent from my records that _______________, LLC is the third owner of this account, which was charged off by _______________ and _______________ sometime after _______________.

The first owner was _______________, which owned the debt on _______________and sent a settlement offer of 50% of the debt, for an amount of $837.36. I was unemployed at this time in 2012. The second owner was _______________, which owned the debt on _______________, and sent a settlement offer of 75% of the debt, for an amount of $1256.05. I was also still unemployed at this time in _______________.

The third owner is _______________, which owned the debt on _______________, and sent a settlement offer of 100% of the debt for an amount of $1674.73.

I acknowledge that this is my debt and I DO want to pay it. However, my income is NOT sufficient to pay the full amount. I am lucky if I bring home $250 after taxes each week. My parents cannot help me as they are in the third year of a five year Chapter 13 Bankruptcy, due to a stroke my father had in September 2007. I pay a portion of my pay to them for rent, groceries and utilities.

I am also not in the position to pay a lump sum to take care of this debt, due to my income limitations. I am offering the original 50% offer made by _______________, in the amount of $837.36. I can attempt to pay $100 a month. If this is acceptable to you, I would like a letter stating your acceptance of this amount, the payment terms, the 1099C tax issues as to the amount written off by you and how this will be reported to the Credit Bureau. I would also like in writing that the balance of the debt that is not paid is to be written off and NEVER sold and that the balance is null and void.

I have looked at your website and see that your have a payment option tab where I can make payments. My situation is that I MAY be able to make a weekly payment, but sometimes it may be a monthly payment.

Thanks you for your time, and I hope that you are willing to work with me as I am willing to work with you.

[TXskyblue]

First, you may want to redact some of the particulars. Being that specific could possibly lead to you being personally identified.

The goal seems to be to pay it off. Okay, have you tried calling them and asking them about payment options? Do not give them your bank account information or in any way allow them electronic access to your account no matter what. If you come to an agreement, ask them to send you a letter stating what they agree to and only then pay them.

I would not acknowledge that the debt is yours. I understand it's yours, but keep your options open and refer to it as an alleged debt. Always, always, always. Don't deny but don't affirm.

If it were me, I would start with sending them a demand for validation (DV) letter.

eta: I looked and AL's SOL for credit cards is only 3 years. You may be able to ride out the SOL. And, have you explored if you are judgment-proof?

[LadyInTheRed]

I agree with TXskyblue. Never acknowledge the debt.

Also, your son should not give so much information. There is no point in going over the history of ownership and collection efforts. Prior settlement offers and why they were rejected are irrelevant. Your son is responsible for the debt, not you. So, your stroke and BK is none of their business and will not get any sympathy from Midland or its attorney. Collections agents may ask "why don't you borrow from your parents" when trying to collect a debt. But, it is none of their business why that is not an option. There is no reason to tell them that he pays his living expenses to you until perhaps they get a judgment and convene a debtor's exam that would require such information be provided.

There is a sample DV letter at http://www.credityoda.com/debt-validation-letter.html. Google "sample debt verification letter" for more samples.

If they provide evidence of the debt, then your son can offer a settlement. But, he should not say that he will try to pay a certain amount. He should state what he knows he can pay. The chances of settling without paying the full settlement amount immediately are small.

[mdl]

How do I edit???

[mdl]

I can't get the edit to come up on that post

[LadyInTheRed]

You have a limited amount of time to edit. I edited it for you.

[Crawley]

When sending a Dv letter, use the KISS method.

Collection Name
Street Address
City, State Zip

Your Name
Street Address
City, State Zip
Phone Number

Re: Account number

To whom it may concern:


I dispute this debt.

Any calls at any time are inconvenient.

The address listed above is my correct address.

If there is an underlying arbitration agreement, I elect arbitration.

Sincerely,

Your Name



DO NOT SIGN
Send via Certified Mail, Return Receipt Requested (CMRRR)


You gain all the protections of the Fair Debt Collections Practices Act (FDCPA) as well as the Telephone Consumer Practice Act (TCPA). Always assert/conserve your rights as a consumer. You may well be liable for the debt, but the burden of proof is on the collection agency to prove that you owe it and that they have the right to collect. If you want to negotiate, offer 5-10% and work from there. JDBs pay pennies on the dollar for the rights to collect on old debts. Their business model is based on you being scared and worried and not knowing your rights. They might have bought a 4 yr old CC debt of 5000 for only 50 bucks. Then they turn and try to collect 5k from you. Even if they only get 1k from you, the profit margin is insane.

[bcohen]

To be honest, I think this is a very poor letter. I am not saying this to be rude, but rather to help you avoid making a mistake which could cost you financially. First of all, you do not benefit by giving out information which the current owner may not have, and could be used to produce a chain of custody for the debt, thus increasing the likelihood of a lawsuit (and allowing the current owner to obtain the necessary documentation to win such a lawsuit). Second, the junk debt buyer (or their collection agency) who is contacting you does not care about your financial hardships, or your need to pay other bills--they just want whatever they think they can get out of you. Third, agreeing to make payments is almost never in your best interest, especially on an unsecured debt which has presumably been in default for several years. Fourth, when attempting to negotiate, never give your maximum offer first! The creditor will probably assume you can pay more, and therefore demand more. Fifth, under the circumstances, unless you are trying to buy a house or obtain a security clearance--and thus need to pay off all collections accounts, I am not sure that paying toward this debt is in your best interest.

A better letter would go like this:

Dear Debt Collector:

Please be advised that I dispute the alleged debt in its entirety, and am requesting that you provide validation of this alleged debt in accordance with the U.S. Fair Debt Collection Practices Act (FDCPA). Also, please be advised that any further communication is to be by mail only, and that it is inconvenient for me to receive telephone calls at any time, on any number. Thank you for your prompt attention to this matter.

Sincerely,

Your Name.

Type your name, but DO NOT SIGN the letter. Send the letter Certified Mail Return Receipt Requested, so the collection agency knows that you know they got it. Most likely, they will do one of two things for a debt of this size and age: they will start sending settlement offers--which will likely get better as time goes by, or they will simply leave you alone. The likelihood of a lawsuit for a $1674 debt which has been charged off for 4 years, and is now on its third owner is pretty slim to say the least. In fact, the current owner probably has nothing more than a spreadsheet which lists the name, address, Social Security number, name of the original creditor, original account number, and the alleged amount owed for each debt. I guarantee you that they don't have any idea what the debt is actually for, such as an itemized list of purchases, fees, interest, and other charges.

To be honest, unless you can settle this for 25% or less, you are probably just throwing money down the toilet, and even a settlement for that little may not be worth the money. The "hit" to your credit took place when the debt charged off, and your credit scores will creep up slowly over time, regardless of whether you pay anything toward this debt again or not. Making further payments on this debt, or settling the debt could actually lower your credit scores, because the date of last activity on the account will update. The only benefit of settling is that it prevents a lawsuit, which is probably not going to happen anyways.

[mdl]

Thanks!

[mdl]

Is this letter any better? He acknowledges the original debt and wants to pay it. It's just that he can't pay it all at once. And the letter came from attys in our state which we have read will sue. However, another question. He has another account that PRA calls the house 2 or 3x a day, which the last payment made was in 2011 and is beyond the 3yr SOL. Should he pick up the phone and tell them they are SOL!!??

Anyway, a review of this revised letter is attached. Critique away please.
Dear Sirs:

I am in receipt of your letter dated April 30, 2014, received May 3, 2014. According to my records this account was charged off by the original credit grantor sometime after May 28, 2012.

Please be advised that I am requesting that you provide validation of this debt in accordance with the U.S. Fair Debt Collection Practices Act (FDCPA). Upon validation of this debt, I am willing to pay $418.68 to settle this account, in four monthly installments of $104.67. If this is acceptable to you, I would like a letter stating your acceptance of this amount, the payment terms, the 1099C tax issues as to the amount written off by you and how this will be reported to the Credit Bureau. I would also like in writing that the balance of the debt that is not paid is to be written off and NEVER sold and that the balance is null and void.

Thanks you for your time, and I hope that you are willing to work with me as I am willing to work with you.

[Pjmax]

MDL, you are giving them too much info. From everything I've read, bcohen's letter is the way to go. I would send that off first, and see what kind of reply you get. If you get validation of the account, then call them and arrange a settlement, payment plan, but check back in here first.

[mdl]

Thanks guys. Ok, so I use bcohen's letter, but I have a problem with using the word DISPUTE, because we don't. What should I say?

[Pjmax]

A dispute is a term used when questioning or asking for verification of accuracy. I understand what you are saying, but you do want to put yourself in the best position to not be taken advantage of when you do negotiate a payment plan. IMO, by using bcohen's letter, you are showing the creditor that you are aware of your rights, and have the resources that it will be difficult to take advantage of you, and believe me, they will do that at any opportunity.

[LadyInTheRed]

A dispute is a term used when questioning or asking for verification of accuracy. I understand what you are saying, but you do want to put yourself in the best position to not be taken advantage of when you do negotiate a payment plan. IMO, by using bcohen's letter, you are showing the creditor that you are aware of your rights, and have the resources that it will be difficult to take advantage of you, and believe me, they will do that at any opportunity.

Exactly. You have no evidence that the creditor has a right to collect the debt. Until they prove they do, you should dispute it. This also may very well make the creditor go away. As bcohen said, a debt of this size is really not worth filing a lawsuit for, even for a firm with a reputation for suing. They are looking for easy money. There's no guaranty they won't sue, but why make their job easier by doing anything other than disputing the debt? If they send validation of the debt, then you can offer a settlement. If their evidence is week, you can use that in your negotiation.

[bcohen]

With all due respect, this is a third-tier junk debt buyer (JDB). This is not the original creditor! If the debt was still owned by the original creditor, then I could at least understand why you might feel a sense of moral obligation to pay something, as the original creditor obviously lost a lot of money when you defaulted on the debt. However, the moment that the original creditor sold the debt to the first JDB, your sense of moral obligation should have ended. Unlike an original creditor, which lends money in good faith, JDB's are speculators who buy defaulted debts--knowing that most of them will never be repaid--for pennies on the dollar. Each successive JDB pays less and less for the debt, because the probability that anything will ever be collected decreases as time passes. Any money you pay at this point WILL NOT go to the original creditor, because they have sold their right to collect the debt.

The point I am trying to make is that once a debt has been sold several times--or even one time, morality should not enter the equation. You did not have a contract with the JDB, and you did not cause the JDB to lose any money. If they chose to purchase your debt on a gamble that they could guilt you into paying, threaten you into paying, or sue you into paying, and that gamble ends up being a bad bet, that's the JDB's problem. They are counting on the fact that a certain percentage of people can be intimidated into paying hundreds--or even thousands--of dollars toward a debt which the JDB might have paid less than $10 for.

PLEASE do not let this so-called "moral obligation"--which does NOT exist anyways--distract you from the issue at hand, which is that a company with whom you have no prior business relationship is trying to collect a debt which they may or may not even be legally entitled to collect. Additionally, even if the company is able to prove that they own the debt--which will ONLY happen if you send a dispute letter such as the one I posted above--then you should still probably not pay anything. I fail to see how you gain anything by paying toward this debt ever again, because in 3 more years, the debt will "fall off" of your credit reports as long as you do nothing to re-age it, such as making payments or signing a new promissory note, etc.