"Charge Offs"

[JackBauer]

I have a general question regarding "Charge Off." I always have to give the excuse that led to this situation. It's not like we were derelict of duty on our part, but my son and then my wife procured the need for serious surgery within a year of each other. One of her symptoms was dizziness, disorientation, etc. She was already barely functioning and I didn't realize that she had gotten so far behind. By the time I figured it out it was too late, the time period was too long and the debts were charged off. That was about 3 years ago I believe. Since then, knowing we were not out of hot water yet, I chose to blow them off because one of the illnesses is cancer. It turns out its not as serious as we initially thought, but left untreated it could easily move to more dangerous locations. Simply put, my wife, the mother of my children, is far more important to me than my credit history.

But, while talking to my banker at a company owned credit union, I mentioned filing bankruptcy or just paying it off. She looked at me like I was crazy and told me that once the debt is charged off it's really pointless to pay it off because the "collectors" get most of the money and really are harrassing you for money that isn't even theirs. She told me that bankrupcty wasn't necessary because in 7 years it falls off your report.

Any more information on this that helps. The creditor is known for high interest rate that we used in an emergency to replace a broken AC. My wife ran a home daycare and with all those toddlers and babies in the house it was too dangerous in our area to ignore it. Now, the debt, once $4500 is showing up as $12,000 and the same creditor seems to be relocating where the calls come from, Asset ??, supposedly known for harassing calls. I told them about 2 years ago to stop calling my cell phone but this past year they started calling again. I have that plus a free VOIP service that records all the calls that come in. They call a lot. But I have them on call blocker, but somehow they end up getting through. I block them to avoid the harassing calls, which increases anxieties in my wife, and thus makes her more susceptible to a recurrence of cancer. What should I do?

[HHM]

True, but with omissions (and the banker is sort of an idiot though).

During that 7 years, there is constant collection, law suits, etc. Also, they will re-age the account. When a collector puts the account on your credit report, that starts a NEW, 7 year clock (granted, the legality of that is highly questionable, but what are the odds you are going to sue in federal court?).

You really need to decide on the lifestyle, you can file bankruptcy, get a fresh start, and actually REBUILD, or you stay a deadbeat debtor, never answering the phone and always looking over your shoulder, your choice. But trying to wait it out is a fools game in my opinion.

[tobee43]

first JackBauer welcome to the board!

i'm certain the past few years have been difficult with all the calls you have been getting on this situation.

a charge off is just about as bad as a bk, however, as pointed out my hhm points out, this can follow you for some time and make your life miserable, or really consider filing bk and getting that fresh start as mentioned.

if i were in your shoes, i would go to a few FREE atty consults and see what they say about your position and get the REAL legal scoop as opposed to listening to a banker. just interested also, if that banker would be willing to loan you money for a car or a house with that sitting on your credit report.

while of course your family's health is more important that your credit report, unfortunately, in this society, our credit report dictates how much in some cases car and house insurance we pay, how much we pay for any type of loans we made need in the future. so, it is much to think about.

best of luck and i hope it all works out for you!

[GoingDown]

In this case I would send them a cease and desist letter by certified mail, since they ignored your previous letter (unless you already sent that one by certified mail and kept the certified mail receipt so you can prove that they received your letter), and since you are recording their incoming calls through VOIP, you will have evidence of them violating the Fair Debt Collection Practices Act (worth $1000 to you) and also violating the Telephone Consumer Protection Act if they are using an autodialer to call your cell phone (worth $500 per call to you). Keep a record of their violations and keep copies of the recorded phone calls in a safe place. If they ever do sue you, you now have a counterclaim against them.

If they continue to call, I would also file a complaint with your local attorney general's office. Sometimes they have a department which will actually send an official letter with your state's letterhead directly to the debt collector, instructing them to stop calling you. In my area it is called The Arizona Deparment of Financial Institutions ( http://www.azdfi.gov/ ) , and they license debt collectors who call anyone in our state, and so they have jurisdiction over them.

[karm43]

I could prob get rich from this.. I get more then 15 calls a day I don't answer the phone. To send them all letters ugh

[HHM]

I could prob get rich from this.. I get more then 15 calls a day I don't answer the phone. To send them all letters ugh

LOL, not exactly that easy, you need to sue them in Federal Court, subpoena records, depose witnesses, etc.

[JackBauer]

We need to start an organization dedicated to creating solutions for stopping the abuse. There are many of us with legitimate claims to why we've defaulted. We actually live very modest and struggle to live within our means. There is really no excuse for us to be so tight, but we are and the reason is cost of living. As opposed to a national healthcare plan that I am, it would actually even the score for us and help us to stop worrying about medical bills. You see, I worried that if we couldn't pay our medical bills, then they would refuse to see my wife or my children, not to mention me if something catastrophic happened. I am so busy that I haven't had the time to file for disability from my military days. I've been told several times that I should. But my pride has prevented me from doing so. The settlement is at $6500. The entire thing nearly doubled sin the first go around. This is a very sleezy business that nobody respect, not even the creditors. When a loan officer recommends you not pay, what's that mean? Kind of odd. Can I insure that the calls made to me are automated? All of these are indeed interesting questions. But I wanted to avoid bankruptcy because I will never be hired for management unless I can fix this issue. That's one of many reasons I've chosen to teach and have returned to school. No place to go, unless I actually want a pain in the neck job in administration. Not likely though.

[HHM]

We need to start an organization dedicated to creating solutions for stopping the abuse.

Hate to break it to you, but the solution already exists...it's called BANKRUPTCY

[JackBauer]

Hate to break it to you. There is already a suit that is being reviewed, and commented on by the Supreme Court. I'm talking about the illegal calls by machine, calling on numbers they're told not to call. And limiting how they speak to you. I've been treated rather rudely in the past that goes well beyond illegal. I'm just not a pushover.

[HHM]

I realize that, but in reality, FDCPA violations and Telcom act violations are not solutions to debt, you still owe the money regardless of the harassment, it is just that BK kills two birds with one stone.

Is what most collections agencies do wrong, yes...but the debtor does make a choice to let it go that far. If you file BK sooner, rather than later, and actually SOLVE the debt problem, you need not suffer from the harassment.

BK is actually how you get your life back and get back on track, its not about being a pushover, its about doing what is right for you and your family. Only stubborn, misinformed, people don't file bankruptcy and suffer needlessly.

[JackBauer]

As far as the debtor making a "choice" is concerned, that's really sketchy and quite blind - dare I say ignorant or insensitive - to say such a thing. This is the type of language attorneys and debt collectors invoke to manipulate people into making bad choices. When a debtor runs into an unexpected emergency and the income ceases because of an illness and the option of food on the table and a roof over their heads become priority, that's no choice, but an intelligent, only option. No amount of planning could have predicted 3 major health issues like that.

All I want to know is the likely hood of making to the end of 7 years and making it fall off my record, even if it requires legal action. I have set my home systems up to collect evidence against them now. I collect all of the voice messages they leave... automated ones as well, rarely human beings. one of the jerks tried threatening me and I nearly gave the guy an aneurism at Asset Acceptance... I'm that challenging, but then, all engineers are difficult to deal with because we deal with contractors over thousands of dollars in change orders. Is there a way to make the "collectors" go away and only deal with the original creditor? If not, then ignoring or bankruptcy seem to be my best option. But bankruptcy would only be to get rid of the stupid phone calls that I have blocked... lol. Yes, I beat the system for the most part, but the recent letter kind of made me want to see if I should consider filing BK. If I trusted the Consumer Credit Counseling companies, I'd opt to go that route. But there are no guarantees. Paying is by far the worst option though.

[CCM620]

I dont know if bankruptcy for a $12,000 debt is the best option. If you have over $50,000 then I think bankruptcy is more viable. Seeing as you are in Texas and your state doesn't have a wage garnishment law that is half the battle there. If the creditor gets a judgement, do you have anything to lose? Is the judgement renewable? If you are collection proof then waiting out the 7 years may be the best option. I have much more credit card debt then that and not filed after 2 years. I have nothing to take, no wage garnishment law, and judgements in my state are void after 10 years. So why file? I haven't, but may choose to do so. You know your situation better than anyone and your circumstances and state laws will answer what you should do.

[JackBauer]

The settlement is being offered at $6,600. But another lost bill that popped up has grown to around $3,000. No settlements offered there. I have one remaining bill for $660 from the same organization as the $12,000 original creditor, GE Money. The $660 is what's left of those medical bills that sent us into this financial crisis, not much of a crisis to me. Right before I joined the Army in 1985 I had just filed BK for what read on the court records as $145,000. That included everything that could possibly come to bite me later. It included a potential law suit from an accident, which is how I got in that situation, and the ballances off all my credit cards. I was so humiliated at the age of 23 that I thought I'd never recover. Turnes out to be the best decision I made for that situation. I entered the military trying to get the bonus to pay for the accident, but then I found the driver was going to sue. My insurance had run out after a lengthy unemployment period. He was "self-insured", only companies with assests in excess of a certain about can do that. Not fair. The irony is I had just contacted the insurance company to get covered and saw I was going to be late, so I packed up and took off with plans to continue the conversation at work. nearly lost my life in that wreck. Rolled over 8 times after being rammed into the passengers side crossing the highway. I had just put on my seat-belt, before seat-belt laws. Fun.

[jacko]

Texas is a debtor friendly state. Generous exemptions for personal property. I suggest you look up your states exemption law and take inventory value of your assets. Listen to your banker. The debt buyers paid pennies from your original creditors. When you settle, you may have to pay income taxes on the difference.

The settlement is being offered at $6,600. But another lost bill that popped up has grown to around $3,000. No settlements offered there. I have one remaining bill for $660 from the same organization as the $12,000 original creditor, GE Money. The $660 is what's left of those medical bills that sent us into this financial crisis, not much of a crisis to me. Right before I joined the Army in 1985 I had just filed BK for what read on the court records as $145,000. That included everything that could possibly come to bite me later. It included a potential law suit from an accident, which is how I got in that situation, and the ballances off all my credit cards. I was so humiliated at the age of 23 that I thought I'd never recover. Turnes out to be the best decision I made for that situation. I entered the military trying to get the bonus to pay for the accident, but then I found the driver was going to sue. My insurance had run out after a lengthy unemployment period. He was "self-insured", only companies with assests in excess of a certain about can do that. Not fair. The irony is I had just contacted the insurance company to get covered and saw I was going to be late, so I packed up and took off with plans to continue the conversation at work. nearly lost my life in that wreck. Rolled over 8 times after being rammed into the passengers side crossing the highway. I had just put on my seat-belt, before seat-belt laws. Fun.

[df04527]

I just want to answer your question -- is there a way to make the collectors go away. Short answer is no unless you BK. There are techniques to slow them down, if you will, but not go away. If you look at it from the lenders perspective they have a right, by law, to persue a defaulted creditor. They are not interested in how you got in the situation, while unfortunate for sure, they still have every right to persue and boy we know they do, some, more aggressive than others. Once they charge off the debt and sell to a agency that specializes in debt recovery THEN, and only then, does the FDCPA apply. IF they decide to keep the defaulted debt and re-assign it to an internal collections dept the FDCPA does not apply. An important distinction as it means you cannot send them a C&D, among other things. hth

I wanted to edit to add that you can sure try to treat an original creditor like a debt collector with sending C&D's but it may not work and they just trashcan your letter. Some states do, in fact, treat them the same as Florida does. With Texas law - the same may apply. So while the above is the "norm" - please understand that is generic and only your local and state laws will determine if they really go away or you just slow them down.

There is no excuse for rude though. But good luck pursuing that too if you choose to do that by recording conversations etc. Be sure you know your state laws on recorded conversations as well - two party state, one party state.