Where do collection attorneys get their numbers?

How do get debt information from people who want your money?

A little back story: I defaulted on a credit card debt. The bank charged off the debt. I made arrangements with the bank to pay it off. There were errors aplenty, and I thought I was done because it had stopped being taken automatically out of my account. This was not so (it was just that the person taking it out of my account quit the bank). There was a court proceeding that I was allegedly invited to (my invitation must have gotten lost in the mail), a judgment filed against me (which obviously was also lost in the mail) and the next thing I know there was an attachment on my wages. Then I was laid off from the job that carried the attachment (I'm sure the attorney [read: collection vulture] thought I did it on purpose). I got another job and started paying again. Letters and phone calls abounded so I could find out exactly how much I owed (fees, interest, judgment fines and whatnot), and I never got the same numbers twice. I asked for a statement a few different times and got a printout from the collection vultures that didn't detail anything, so I asked for a line-item detail and got one, but it didn't make much sense. Asked the bank for a statement and they said the collection vultures were handling it. Sigh.

Jump ahead to now. I was recently able to pay a settlement to make this go away (I need the bank to finance a car for me - my poor little Jeep) and called the bank today to see if the vultures paid up. What I found was that the bank says I owed $678.09, it hasn't been settled, and that the vultures had been paying them rather sporadically, in creative amounts (I had been paying $100 per month). What I paid to the vultures for the settlement was $1,970. That's a difference of $1,291.91 - but who's counting... I called the vultures and was told that the bank has the wrong numbers, and that I shouldn't have been calling the bank anyway. Vulture-man said that the collections reps wouldn't have the super secret (I assume) judgment information. I asked him why the bank would have different information, being as how the vultures were supposed to be paying the bank on MY behalf. This wasn't a debt that was sold, oh no. I get the feeling that I may have been played. Big time. I've put calls in to the bank collections Supervisor and also the collections VP to try to find out how I can get the real numbers, in writing, but no one has returned my calls. This makes me really angry. And sad. And bitter. Because I'm smart, resourceful, and know how to read, I will get to the bottom of this. I will get the information I need - I may not like it; it may be that super secret judgment numbers equal exactly $1,291.91 more than what the bank says I owed. Who knows? What really chaps my ass is that there are people who may not be as smart or resourceful as I am, and they will get screwed. Even if they know how to read.

Just an aside... My friend recently applied for a loan for a car. She is very good about managing her money and has an excellent credit score. She qualified within minutes over the phone and is getting a low interest rate. Her epiphany was thus: So long as she was willing to sell her liver in order to make payments on time, she didn't even need proof of income... That's sad, but she's not wrong.

•  This is just a guess

  But perhaps the original debt that you owed to the bank was $678.09 and the collection agency is charging you $1,291 for its collection costs.

  by MasonLee on Wed Jan 11, 2006 at 02:56:34 PM PDT

  •  Yep. Which is actually a pretty cheap

    collection fee.  Sad to say, but true.  :>(

    Our... constitutional heritage rebels at the thought of giving government the power to control men's minds. Thurgood Marshall

    by bronte17 on Wed Jan 11, 2006 at 03:07:32 PM PDT

    •  I don't think a collection agency is involved here

      Only a law firm.  The maximum amount of legal fees that can attach to the debt is likely set by statute and the discrepancy here is far more than any attorney fee statute would permit.

      by GTPinNJ on Wed Jan 11, 2006 at 03:09:42 PM PDT

      •  Different states have different laws?

        And some law firms have an entire department set up for collections.  It's the bread and butter (at times) when they have corporate accounts.

        Our... constitutional heritage rebels at the thought of giving government the power to control men's minds. Thurgood Marshall

        by bronte17 on Wed Jan 11, 2006 at 03:16:53 PM PDT

        •  Indeed.

          Some law firms handle nothing but collections.

          And yes, different states have different laws, but I have yet to see any state that permits the assessment of contingent attorney fees to exceed 50% in any circumstance (and that is personal injury).  In fact, in the case of monetary collections, the % permitted in fees is likely far less.

          In addition, credit card contracts, if they even allow for attorney's fees, always assess either a specific % (15%-20% is common) or will define them as "reasonable".  No court would ever agree that 200% is a reasonable attorney fee.

          by GTPinNJ on Wed Jan 11, 2006 at 03:26:12 PM PDT

          •  Ah, ignore my comment.

            I now see your comments through the thread.  :>)

            Nice work and thanks for putting the info out there for all to read.

            Our... constitutional heritage rebels at the thought of giving government the power to control men's minds. Thurgood Marshall

            by bronte17 on Wed Jan 11, 2006 at 03:38:48 PM PDT

          •  In Minnesota

            where I practice law, the collection attorney gets their court filing fee from the debtor - $250, statutory costs of $200, and any other expenses.  Those kinds of costs probably make up a big chunk of the missing $1200.  The rest is probably attorneys fees, which you agree to pay when you sign up for the card.

            by lando on Wed Jan 11, 2006 at 10:30:06 PM PDT

  •  Doubtful.

    At the time the debt is charged off (a bookkeeping term meaning written off as a bad debt) the lender customarily stops calculating interest.  (Note: just because the original lender stops calculating future interest doesn't mean that they aren't entitled to collect it.)

    The debt is forwarded to an attorney for collection.  The attorney files suit on the balance due, plus interest, plus attorney's fees, plus court costs.  At this time, the pre-suit interest is likely calculated and added to the balance due.  (This likely explains the balance discrepancy.)

    You are supposed to be served with the Complaint (different jurisdictions vary on whether this is to be done by personal service or certified mail) & if you do not file a written Answer, default will be entered against you.  Then the creditor can apply for entry of default judgment which entails submitting proof of damages.

    by GTPinNJ on Wed Jan 11, 2006 at 03:07:44 PM PDT

    •  Also...

      and that the vultures had been paying them rather sporadically, in creative amounts

      The difference in the amount you paid the attorney & the amount they forwarded to the credit union is because they deducted their fee (this was almost certainly a contingent fee case-almost all collection work is on contingency) and whatever court costs they advanced in connection with the lawsuit.

      by GTPinNJ on Wed Jan 11, 2006 at 03:16:48 PM PDT

•  Just

  had one of those myself...just a $5,000 add on. Debt collection is a very unethical business.

  by eastvan on Wed Jan 11, 2006 at 02:57:26 PM PDT

•  Banks=Corporate Terrorist Rethug Criminals

  Sorry to hear about your troubles.  The corporate terrorist rethug banks behave like criminals and our sick corporate terrorist rethug government makes it legal.   Banks steal and nothing happens-people steal a loaf of bread and end up in jail.  

  It is class warfare and the war is being enacted by sick rich terrorists against us.  

  By the way what is the name of the bank?  

  by tri on Wed Jan 11, 2006 at 03:00:38 PM PDT

  •  It's a credit union

    It's a local credit union in So Cal - LBS Financial. I must say, I've had good experiences with them; it's the vultures that are the problem.

    by Tami B on Wed Jan 11, 2006 at 03:03:41 PM PDT

  •  Also see...

    http://www.dailykos.com/...

    http://www.innercitypress.org/...

    http://www.paypalsucks.com/...

    by tri on Wed Jan 11, 2006 at 03:05:11 PM PDT

•  Hopefully I can also explain this for you.

  I called the vultures and was told that the bank has the wrong numbers, and that I shouldn't have been calling the bank anyway. Vulture-man said that the collections reps wouldn't have the super secret (I assume) judgment information.

  You should always be dealing with the law firm in this case, rather than the bank.  Here's why: the law firm is prosecuting the case against you.  If you deal directly with the bank & the law firm is not kept advised of what is happening, they will continue their collection efforts.  These efforts include garnishment of wags, sale of personal property & levy on bank accounts.  The potential damage you can suffer from these eventualities is extreme.

  As far as the balance discrepancy is concerned, the law firm will have the most accurate information.  The bank likely still shows only the principal balance of the debt since it has been charged-off.  (See my post upthread.)

  by GTPinNJ on Wed Jan 11, 2006 at 03:22:43 PM PDT

  •  Thanks for the info!

    It does explain quite a bit. The law firm is in fact a collections only firm. The attorney's fees and court costs were paid off the top. The VP called me back and I was shocked to find that the "settlement" offered to me actually just finished off paying the debt in full, plus interest, plus attorney's fees, plus court costs, plus $26. I understand they are doing a service for the credit union, and I've not defaulted on anything since - learned my lesson, I did... I guess the thing that upset me most about this was that there was no transparency in the process, and even though I was a willing participant in clearing up the matter, I was not given the information that I had asked for and was treated quite rudely to boot.

    by Tami B on Wed Jan 11, 2006 at 05:46:41 PM PDT