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Herein lies information I've gleaned from 3rd party sources as well as my own, direct experiences regarding credit reporting and collection agencies. It's strictly not meant to be legal advice, so if you find yourself in a legally compromising situation, talk to a lawyer! They'd love to hear from you.

First, some basic knowledge. Before starting, freeze your credit report by contacting the 3 main credit bureaus. "Freezing" just disallows new accounts from opening. If someone or some company you've never done business with checks your report after freezing, they'll be barred.

Also, check your state's statute of limitations (SOL) for being sued. If you have a collection account younger than your SOL, you can be sued for it, and you really don't want that to happen. In those cases, don't contact them, and if they contact you, "play nice." If they call you, don't talk on the phone! And when you discuss the debt over mail, it is alleged. Anything construed as admission of ownership will reset the SOL.

Lastly, accounts don't show up on your account after 7 years, so if any of your accounts are nearing that age, you can probably just ignore them (assuming they're also out of the SOL).

Golden Rules

Allow me to tell you about some general Golden Rules I've come to understand.

Don't

1. Don't talk to collection agencies on the phone, ever. Further, if you do find yourself talking to one on the phone, do not give them any personal information about yourself. There is always the chance the the collection agency (CA) is a scam, or the original creditor (OC) was a scam, and adding your personal information to it will add to its validity later.

2. Never ignore a debt, legal notice or collection agency. They won't go away, and outright ignoring them will be taken as refusal to pay. Lots of things could possibly happen, like filing public judgements in court that anyone can see for the foreseeable future (thank you, Internet) or your wages could be garnished. That sounds bad, and it means that the entire HR department & supervisors at your work will know about your debt. Suddenly you'll find yourself missing promotions. On the other hand, if you don't want collection agencies calling you, write them a letter telling them phone calls are inconvenient, and outlining where they can send you mail.

3. Don't stick your head in the sand. No one in America agreed to be part of the credit system, but we all are, and resistance is futile. Non-interaction with the credit system is itself defined as a negative interaction. As things become more digitized, we should all fully expect that our credit histories will be used in ways we haven't yet imagined until our legal system catches up.

Do

1. Find out what's lurking in your credit history. You can do it for free once a year. For paid services, I recommend using myFICO.com as they offer your real FICO score. Believe it or not, most other sites offer fake scores, a.k.a. "FAKO," which are basically some proprietary formula that is not recognized. Regardless of the report's origin, at least you should know what debts are claimed in your past, as well as whom to contact about them.

2. Assume the debts in your credit history aren't real. Unless you have knowledge a debt is real, assume it is not. In fact, in most cases it's probably best to assume it is not real. It is completely possible a collection account is on your report from a debt you actually produced, but the CA doesn't have the legal ability to collect on it. This should hopefully affect how you approach the debt, as well as affect how you talk or write about it.

3. Send letters and contacts to CAs or OCs, not credit reporting bureaus (CRB). Unless otherwise noted, you don't want to get a debt validated by a CRB. Lots of times, this "validation" is done electronically. It's error-prone, and once you get something verified by a CRB, it's really hard to get it removed later. You can dispute with a CRB after all other methods are exhausted, or if you need to file a complaint against a CA.

There are lots more Golden Rules, but I am trying to hone in on a few of the most important ones. If you follow the six above, you're off to a much better start than I was, years ago!

Strategy and Tactics

The tactics outlined below are abbreviated. This is simply because the credit industry is a mammoth, and it'd be impossible to include everything in a single, concise post. I highly recommend using the forums found at myfico.com. I'm not linking to it in order to indicate I don't get any kind of kickback for recommending their community.

Before digging in, a kind word of advice. You must have a lot of patience. The fact of the matter is, CAs aren't normally reprimanded for providing inaccurate info on your credit history. Sure, there are provisions that allow you to initiate complaints against CAs with your State Attorney General, the BBB or the CRBs, but that just means you will have a lot more work to do if it comes to that. By all means we should all file complaints when needed, as they do sometimes lead to financial judgements against them, like Midland Funding. While all those complaints are processed though, your credit still sucks and you can't get a new credit card / car loan / mortgage, etc. So patience is necessary.

Step 1: Assess the Damage

Once you get your report, you'll see all debts that are claimed yours. If your report is like most, the account numbers from CAs and other debtors aren't complete. They'll have X's replacing some numbers. This is no big deal for now. All of them should have a contact mailing address, as this is the address the credit reporting bureau (CRB) uses to contact them.

Divide all accounts into categories. Most of them will go into the first category: accounts you want verified. These include any open accounts (go to Step 3). Anything you know has been paid goes into a second category (go to Step 2).

While going through this process, don't pay a single cent to a CA. The aforementioned 7 year reporting period starts after your last payment. Therefore, if you have a debt from 6.5 years ago, and you make a payment today, you've just reset the clock. It's a process known as "re-aging," and it was specifically created to piss you off. Yay!

Step 2: Goodwill Letters

A "goodwill letter" (GW) is a non-confrontational letter. Let say, for example, you have a bill in collection from a medical procedure. You paid it off, but it somehow landed in a collection account anyway. Or, maybe you were going through a rough patch and have some 30 day late payment notices. On the other hand, maybe you paid off a collection account in the past, but it's still sitting on your report showing a $0 balance.

Whatever the case, in the GW briefly explain your situation clearly and honestly. Go ahead: pull on some heartstrings! But let's not get too crazy about it... I have had 2 collection accounts removed, and others have had more.

Step 3: Validate Debts

Send all CAs on your report "debt validation letters" (DV). If you get a notice of a new collection account, the CA is required to validate in the first 30 days after receipt of this notice. After 30 days, they don't have to validate, and may well ignore your letter. One caveat is Texas, where your debt must always be validated.

The first step is collecting a few certified mail forms from the USPS. The reason we get them first is so we can include the number from the form in the letter itself. That way, if we ever need to prove it was sent & received later, we have the number in the letter as well as the receipt.

Since you're validating debt, you don't want to provide more personal information than needed. Why not? Because the debt may not be valid, or the CA may not own the debt legally! Sometimes you'll get a letter back asking for more information to "verify your identity." You can get around this step if you want by having the letter notarized before sending it. For now though, here is a sample letter that I use:

Your Name
123 Main St
City, ST 00000

CA Name
123 Wall St
City, ST 00000

Account Number: 12345xxxxxxx
Last 4 digits of SSN: 1234
Debt Amount: $50
Certified Mail: 1234 5678 1234 5678 1234

This is a request to validate the above-mentioned debt under FDCPA 809(a). This should not be taken as an attempt to refuse payment on the alleged debt, but rather as an attempt to validate it. Along with validation of this debt, I request you also provide me the name and contact address for the original creditor.

Contacting me by phone is not convenient. However, I can be contacted by CA Name at the following mailing address:

123 Main St
City, ST 00000

Thank you,
Your Name

Your name is typed at the end, you do not sign it and you do not give any additional personal information. Send this out at the USPS using certified mail. It should be about $5 or less. After a few days, you can track the number off the USPS website. You'll see when it was delivered. Print out this receipt from the USPS website and save it in your records.

Now the 30 day period starts. The CA does not have to validate the debt, therefore, this "30 day period" is simply a reasonable time frame for response. However, they are not allowed to actively collect against you until they have validated. If they call you, get a record of the call from the phone company. It's possible you can sue them later if they make any attempt to collect against you before first validating this debt to you.

What is validation? It is a copy of the form you signed for the original debt, along with a notice from the OC to the CA that the CA is legally allowed to collect the debt from you. Anything short of this is not "validation." Sometimes you'll get an irritating note back stating how much you "owe" the CA. This is not validation, the CA knows it and they're just messing with you.

What happens next? If you get proper validation back, move to step 4. If you get improper validation, repeat this step again and send a copy of the response with it, explaining you really seriously want actual validation. If you get no response back, move to step 5.

Step 4. Pay for Delete (PFD)

At this point, the debt has been validated to you, and you can now be sure that the debt is real and the CA is not scamming you. In any context, though, continue referring to the debt as "alleged."

Now you can request a "Pay For Delete." This is a somewhat controversial process, according to CRBs. The credit bureaus want to have accurate information, and if you get something deleted, in their eyes your history is not accurate anymore. However, the only way to help your credit score is to have the CA deleted. Simply paying a collection debt will do nothing for your score. Also, the PFD process is completely legal.

The PFD letter is a request to pay the debt (or as low as 50% of the debt) and in exchange the CA will remove the collection account from your credit report. If the debt is outside the SOL, this is really the only incentive you have to pay the debt. Unless you need to pay off all collection accounts for some reason, you should only do so if you have the promise of having it removed. Otherwise, wait out the 7 year period.

The vast majority of collection accounts were bought from their original creditors for pennies on the dollar. A $1000 debt may have been purchased for $100. So if you were to offer $500 (i.e. 50% of the original) the CA will still make money off you. Since you only pay if they delete the negative mark on your record, therein lies the incentive for both parties.

Just send a very simple letter where you outline what amount you'd like to pay in exchange for deletion within 10 days of their deposit of your payment. The payment you send should be a cashier's check from your bank, or a money order. Don't send a personal check because it has your bank account number on it. Also, you should request that the acceptance letter from the CA be on company letterhead of some kind, and an authorized signature allowing the PFD.

If they accept your payment and don't delete, send out a "friendly" reminder. Then, if necessary, sue them in a Federal court for breach of contract. They will more than likely respond by deleting the CA record, and then you drop the suit.

Just to reiterate, you may well get no response from your PFD letter. If that happens, you can try sending it out again as many times as you want. However, if the debt is out of the SOL, do not pay a dime until you get a written agreement for deletion. In 7 years from the start date, it will be gone from your history anyway.

Like all parts of this process the PFD process is not assured to work. You might get ignored.

The likelihood that older accounts were removed because of the debt validation portion are pretty good, since many companies don't keep records for very long. I have read in some instances a CA can't validate because they don't have original records. Of course they don't tell you that, they just ignore your DV request.

So the PFD is for the really stubborn ones that will likely not go away for 7 years. It's basically the last step before opting to ignore. To be fair, it's a pretty good deal for both parties, in theory.

Step 5. Time to get serious

So you have at this point requested debt validation, and received no response from the CA. This happens very frequently. You can send another letter out to the CA, with the original letter attached, asking again for validation. If you do this, wait another 30 days to proceed.

Optionally you can skip the second letter. Next, send your documentation to any CRBs that have record of the invalid debt. You should write a brief letter to the CRB telling them the CA "cannot" validate the debt, and as a result the inaccuracy should be removed from your history. There is no need to get real wordy about it. Also, in the eyes of the FDCPA, there is no distinction between "can't" and "won't" validate, so don't worry about that.

Hopefully, the debt will be removed from your report. Realistically, if the CA can't validate the debt, they might sell it to some other agency and you'll have to do this again. If that happens, it may be beneficial at this point to find an attorney to assist in a lawsuit. You'll have ample documentation to prove a debt is invalid.

Step 6. Continued Vigilance

If you can afford it, pay for a monthly monitoring service. The current going rates are anywhere from $5 to $20, and sometimes your credit union or bank will offer something like this. What you want is some way to know who requests your credit history and for what reason.

Sticking your head in the sand regarding credit is not a great idea in the digital world, as identity theft is so much easier today than the past. Perhaps you can discontinue credit card usage or forego a mortgage, but you simply can't ignore what's reported to CRBs.

Some general maintenance:

1. Send letters to CRBs asking them to remove any addresses or names (e.g. a maiden name) you find that are not current. The CRBs are required by law to remove inaccurate information, and frankly their reputation depends on it.

2. Always send out goodwill letters to companies that report negative information in your credit report. Sometimes it won't work, sometimes it will. You may get someone on the other end having a great day, and they'll remove your bad record. Yes, the whole credit industry is somewhat capricious and many times it is pernicious. Just keep trying to get bad marks removed.

3. Follow the rules. I know the credit game sucks, but until it is fixed just toe the line. It's really quite impossible to know how our credit histories will be used in the future. I'd wager many ways they're currently used were unthinkable 20 years ago.

4. Start using a free VOIP service for any bills, credit, or loan accounts. I use Google Voice. I get a free phone number, and in Google Voice settings, I can pick what "real" phone to ring when I receive a call to this free number they provide. The benefits are enormous because I can block calls in Google Voice, and they will never reach my cell phone. I use it for other things too, like posts in Craigslist  ...

Originally posted to jamesia on Wed Mar 13, 2013 at 10:22 AM PDT.

Also republished by Income Inequality Kos and Community Spotlight.

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Comment Preferences

  •  Never pay anything. Debt Strike. (17+ / 0-)

    The banks broke our backs now it's our turn to break theirs!

    "Til you're so fucking crazy you can't follow their rules" John Lennon - Working Class Hero

    by Horace Boothroyd III on Wed Mar 13, 2013 at 10:32:48 AM PDT

    •  Protests work better when you don't screw yourself (23+ / 0-)

      Protesting is a noble, valid and important activity but there are situations where it's helpful and other situations where you simply hurt yourself while your adversary can claim that they are in fact the victim. This goes for not paying debts just as it does for not paying taxes.

      Buying something and refusing to pay for it is theft. I will not lower myself to the level of the banksters.

      If you incur a debt, the best thing to do is to pay it unless you simply cannot. In that case, the suggestions in the diary are the best ones I know of. Most creditors will respond positively if you let them know upfront that you're having problems. (There are of course exceptions.)

      My top secret hint for buying anything other than a car or a home (where the debt is secured by the property, which can therefore be used to satisfy the debt if necessary) is to pay cash. It's really simple: If I can't afford it I don't buy it. If I can't afford it but truly need it I save money until I have sufficient funds to pay for it in cash. No debt is involved. I will include for this purpose transactions using a debit card, provided of course that I have sufficient funds in my checking account to cover the purchase. I will under no circumstances charge something unless I am traveling on official business in which case I'm using a card issued through my employer. In that case I use the card only to pay for things I am certain I'll be reimbursed for in full. I have no personal credit cards and haven't for quite some time. I've managed to do quite well without them. One of the biggest lies in our culture that is taken for truth is that you "HAVE" to have credit cards. You don't.

      Student loans are most certainly a separate and difficult issue but there are all sorts of other laws covering them. I'll admit to being old enough that my undergraduate education cost next to nothing. It's pretty shocking to me what an undergraduate education--even at a public university--now costs. The only reason that public education has become so expensive is that states have become both unable and unwilling to keep the costs of that education affordable. While we've never had the situation in this country where higher education was a right that was fully covered by some level of government there was an era when we came close to it. Over the past 35 years or so we've gone back to the odious notion that a decent and useful education was somehow a privilege reserved for the wealthy who were implicitly presumed to be more deserving than everyone else.

    •  Very bad advice if you have a job or assets (17+ / 0-)

      As a consumer bankruptcy attorney, I deal with people each and every day who do nothing until a default judgment is taken against them. At that point, their options are very limited. Their wages or bank accounts can be garnished, liens can be taken and foreclosed on real estate and if you are ineligible for Chapter 7 bankruptcy, you could either be stuck in a Chapter 13 payment plan bankruptcy, or long term garnishment situation.    

      A far better plan is to deal with creditors before that happens. If the phone calls bother you, you can send creditors an FDCPA letter demanding that they stop. Creditors can be fined for violating the Act.  If you have no income or assets or on Social Security or other exempt income or assets, you should try a hardship letter to explain to the creditor. They do sometimes stop collection efforts.  

      But DO NOT IGNORE any legal papers that you receive, because it can make your life very miserable. Just DON'T.

      If you suspect fraud or other bad actions, contact your Attorney General or the Consumer Financial Protection Bureau take advantage of Elizabeth Warren's brilliance.

      •  Yes my lawyer friend advised this exact same (14+ / 0-)

        thing. I made deals with the creditors when we hit a very very rough spot a decade ago. I would call them once a week to update them. Then I started calling twice a week and it was to the point where I was annoying and bugging them.  LOL!! I got chatty too and eventually they lowered my settlement amount by more than half where I could pay it in installments then.

        I reversed the tables on them and I called them and bugged them all of the time, worked like a charm.

        Follow PA Keystone Liberals on Twitter: @KeystoneLibs

        by wishingwell on Wed Mar 13, 2013 at 01:24:40 PM PDT

        [ Parent ]

      •  FWIW re CFPB (8+ / 0-)

        I was on a nationwide conference call last week about CFPB in which Richard Cordray said that they are in the process of setting up a group within the agency to deal with 3rd Party collectors.  It should be up and running in the summer according to them.  They said that they can already help with them if the originating creditor was one of their covered groups.

        Make use of that great resource.  They will go to bat for you and they will have a public database to show who the real bad actors are.  Help them out by reporting the bad stuff you deal with.  

      •  If you have debts because of emergency room visits (3+ / 0-)

        with no insurance, you also do not have a full-time job or assets. Once your life has reached a certain level of misery, there is nothing further they can do to you.

        •  Sorry for your situation. (4+ / 0-)

          If you have no assets or your income is exempt from collection, then you might be right -- you might be judgment proof. But if that is true, you have little to lose by telling a creditor that. They don't want to waste their time any more than you want them to. When I volunteer my time at a local neighborhood legal clinic, I very often send hardship form letters home with people to send to their creditors. It often works -- and if it doesn't all you have lost is the cost of a stamp. Also, fwiw, you should also ask your hospital if they have a fund for "uncompensated care" that can be used to pay your bill.  

          Some of the people I see (a fair percentage, actually) are facing suits for medical bills. If you have a job and/or assets, it makes sense to protect them rather than be stuck with a garnished paycheck or a lien against your property.

          •  They are not wasting any of their time (2+ / 0-)
            Recommended by:
            radical simplicity, venger

            Their phone call are all automated. They simply have a list of phone numbers. No human's time is involved unless you are fool enough to answer the phone -- then I presume some poor shmuck in India who is paid a nickel per call will come on the line.

            I have Medicare now, but it won't pay their claims and I wouldn't assist them to get payment even if it did.

          •  They just sell it to another collection agency (4+ / 0-)

            If they paid $200 for $25000 in debt, they can make $50 of that back by selling it to another agency, making it a $150 loss for them, instead of a $200 loss. You never, ever stop getting calls for debt - even after the statute of limitations, and especially if you have some publicly visible change in fortunes later.

            A few years ago, we ended up having to change our phone number because "Steve" and "Geraldine," who formerly had it, had some long dead debts, but had won a small lottery.

            Most people do not know about the statute of limitations, and they don't know how to avoid the tricks collection agencies use to reset the debt clock. My brother managed to get a collection agency thrown out of Massachusetts after they violated the law on debt that had been discharged via bankruptcy 20 years earlier - but he had to be very careful not to make the tiniest wrong statement.

    •  Let's be honest with ourselves: (4+ / 0-)

      The likelihood that a "debt strike" will "break" these enormous financial institutions is dubious at best. The refusal to pay is what jacks up interest rates, layers on additional fees, and ensures that what you do pay (when you inevitably do pay) will be astronomically worse. In the meantime, the megabank won't even break a sweat.

      We need to fight these institutions, and the debt collection mechanisms they hold over us. But in the long run, ignoring debt is only going to put more money in their pockets.

      Nothing requires a greater effort of thought than arguments to justify the rule of non-thought. -- Milan Kundera

      by Dale on Wed Mar 13, 2013 at 03:14:03 PM PDT

      [ Parent ]

    •  No problem!! (5+ / 0-)

      My credit is shot to pieces. It would have to die to get better. Or I would.

      I got ALL credit collectors to stop calling me. I ask them one question.

      "If I didn't give the money to (fill in blank) why would you believe I would give it to YOU!??"

      I always pay my medical bills. But I have disputed charges from the past that have haunted me. I will readily admit I know absolutely NOTHING about money. I don't even LIKE it. If I can't pay cash, I can't afford it.

      "Wealthy the Spirit which knows its own flight. Stealthy the Hunter who slays his own fright. Blessed is the Traveler who journeys the length of the Light."

      by CanisMaximus on Wed Mar 13, 2013 at 06:01:51 PM PDT

      [ Parent ]

    •  Check your state's rules for (2+ / 0-)
      Recommended by:
      Horace Boothroyd III, JerryNA

      Statute of limitation on debt.

      Collectors buy old debt for pennies on the dollar.

      Lots of the debt obligation expired, beyond statute of limitation.

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Thu Mar 14, 2013 at 09:05:46 AM PDT

      [ Parent ]

  •  Good step-by-step information here (10+ / 0-)

    Most of my hassles with debt collection agencies have been over other people: one guy who had the same last name as I, & my sister-in-law got into some money problems a few years ago.

    In both cases I only told them the minimum information I needed to, for example: "Is X there?" --"No, she isn't." -- "Do you know where she is?" -- "No." (Well, I did know she lives in Florida, but I didn't know where she was that moment in Florida. She might be at the store buying laundry soap.)

    In brief, also remember family & make sure they're on your side: they don't have to lie, they just don't need to volunteer any information.

    •  Yes I get calls for people who had this phone (6+ / 0-)

      number 20 yrs ago as I have had this same number for nearly 14 years.  I get calls for relatives and siblings and I started telling them I never heard of these people and finally after 4 yrs, the calls stopped. As I have a relative who ignores her debt and these calls and they call me..with her permission, I finally said..

      I never heard of her. Yes I know I said she was a relative but I have since found out, it is not the same person..the person you want is not related to me...I was wrong.
      The calls stopped.

      What they will do is try to pressure a relative to get that family member who owes to call them .....guilt them or get them to do so their relative is not being annoyed. But it backfired in my case as they found out I refused to help and got the calls to stop by insisting it turns out I never heard of this person.  LOL

      Follow PA Keystone Liberals on Twitter: @KeystoneLibs

      by wishingwell on Wed Mar 13, 2013 at 01:22:43 PM PDT

      [ Parent ]

      •  With the sister-in-law it was simple (2+ / 0-)
        Recommended by:
        Nulwee, NM Ward Chair

        We only had a few bill collectors calling us about her. Considering she's living on SSI & not likely to be coming into any sizable amount of money to pay anything she's owes, I figure they just wrote off the debt.

        And pressure us for her debts? I'd laugh at them & hang up. Now my wife might be a different matter: I figure she'd lose her temper, scream at the bill collector, then call her sister & scream at her.

        But when you're collecting money, any trick is worth trying I guess.

    •  I am not so sure (6+ / 0-)

      There are a lot of things that you can do if you are being hassled by creditors that aren't included in here. In fact, this is more or less the least confrontational (and therefore often the least likely to get them to stop harassing you) that you can possibly be.

      You are well within your rights to send them a letter telling them to stop contacting you by phone. If you do so (send it by certified mail so you can be certain they received it), and they keep doing it, they are liable for quite large amounts of money. If they don't send you a piece of mail within the first 30 days of contacting you by phone, explaining why they are contacting you and what some of your rights are etc, they are not allowed to keep contacting you. (In practice, of course, they can just say that it got lost in the mail, and send you another, but judges tend to frown on companies whose mail gets  'lost' too often.) If they call you before or after certain times, they are liable for large fines. And so forth.

      There are ways of making the process extremely painful for the collectors of legitimate debts, and ways of making the process extremely expensive for the collectors of illegitimate ones.

      Oh, incidentally, there are laws about who you are allowed to contact other than the principal, and what you are allowed to say to them. Very strict ones. Collection agencies violate these all the time, and if everyone knew about it and sued them over it, there would be a lot less of this crap to put up with.

  •  This is great, glad you did a write up. (8+ / 0-)

    Credit and debt are confusing messes to navigate.

    You said the air was singing / it's calling you, you don't believe / These things you've never seen / Never heard, never dreamed.

    by CayceP on Wed Mar 13, 2013 at 11:34:22 AM PDT

  •  good stuff (2+ / 0-)
    Recommended by:
    jamesia, Nulwee

    virtual tip and rec.

    The "extreme wing" of the Democratic Party is the wing that is hell-bent on protecting the banks and credit card companies. ~ Kos

    by ozsea1 on Wed Mar 13, 2013 at 12:28:45 PM PDT

  •  I will bookmark this diary and spread it around (2+ / 0-)
    Recommended by:
    jamesia, Nulwee

    Very good adivce.

    Daily Kos an oasis of truth. Truth that leads to action.

    by Shockwave on Wed Mar 13, 2013 at 12:40:21 PM PDT

  •  Paid Collections WORSE Than Unpaid Ones (6+ / 0-)

    The idea of asking a CA  for a "pay for delete" is just plain STUPID.

    At BEST they will accept your offer and report the account as a PAID COLLECTION.

    Remember, this is STILL a derogatory entry, however since it will be dated several years more recent it will REDUCE your credit scores.

    At WORST, they will delete your entry, and SELL the balance of your debt to another CA. Remember, a "pay for delete" is a NEW contract, so the new entry from a new collection agent will have a new starting date and will be on for 7 years.

    Better advice for credit repair can be obtained from reputable on line forums like Credit Boards:

    http://creditboards.com/...

    •  It does and has (3+ / 0-)
      Recommended by:
      Nulwee, llywrch, NM Ward Chair

      worked for me!

      You are correct in that a paid collection is unhelpful. The only thing that helps is having it removed, or of course - never being there in the first place :)

      Either way you slice it, if you can get a CA to remove it, do so. If not, let it sit for the seven years.

      If they do accept your payment, then sell it to someone else, it will come to light when you attempt to validate the new debt. I would probably skip validating with the CA in this case, and move straight to disputing it with the credit bureaus.

      No one is required to use what I mentioned, myfico.com. creditboards.com is pretty good too.

  •  Thanks nt (1+ / 0-)
    Recommended by:
    jamesia
  •  Inaccurate credit information. (8+ / 0-)

    In 2001, my sister and I bought a house together.  Shortly thereafter, multiple credit agencies listed me as married.

    There is a fellow with my name, 20 years younger than me, who lives in the next county over.  At least three different times, his information and my information have been commingled.

    -7.75 -4.67

    "Freedom's just another word for nothing left to lose."

    There are no Christians in foxholes.

    by Odysseus on Wed Mar 13, 2013 at 01:18:19 PM PDT

  •  When I was going through this 10 yrs ago, (4+ / 0-)
    Recommended by:
    jamesia, Nulwee, llywrch, Cassandra Waites

    I was able to get the calls to stop by promising to call them once a week , one the same day each week, to update them.  I finally was able to negotiate a settlement to pay them off, an amount considerably lower than was owed. It did affect my taxes that year in a small way but that was about it. Now my credit report is fine again.  But I found ignoring them only increased the phone calls and the tone of their calls was more harsh. And when I started out ignoring their calls, they started calling neighbors and friends. So I did not want them to be bothered.  I found out, at that time from a lawyer, they did have the right to call neighbors and relatives if they called these people at reasonable hours and if they did not disclose the reason for the calls.

    Fast Foward 10 years and I finally got them to stop calling me with messages for relatives from a collection agency..they gave me no info of course, but kept asking me to contact these people with their phone number.
    I finally started telling them I did not know who these people are..had no idea who they were..and they finally stopped calling.

    But be aware that they will contact neighbors and relatives if you ignore them for more than a few months...that has happened to me from both ends of this.  I am not sure if this is still legal but apparently it is ..depending on what they tell the relatives and neighbors they call.

    Follow PA Keystone Liberals on Twitter: @KeystoneLibs

    by wishingwell on Wed Mar 13, 2013 at 01:19:17 PM PDT

  •  I'm trying to help my mom now. They will not stop (5+ / 0-)

    ...taking money out of her account every month. She made mistakes. She agreed over the phone. She let them have access to her bank account, and now after paying the agreed upon amount for 6 months, low and behold they haven't stop deducting money each month. Bank America refuses to not accept the deduction.

    She contacted them once and they said they would stop after she paid an additional amount in addition to the original settlement amount. She has done that and now they aren't answering the phone or returning her messages.

    I beginning to wonder if they are legit in the first place. I think the best course of action is to just close the account and get a new one from the same bank.

    The worst thing is that she doesn't remember ever having the debt. I will now make sure she is aware of the steps listed in this diary should another debt collector coming calling. Thanks for the info.

    "There is nothing more dreadful than the habit of doubt. Doubt separates people. It is a poison that disintegrates friendships and breaks up pleasant relations. It is a thorn that irritates and hurts; it is a sword that kills.".. Buddha

    by sebastianguy99 on Wed Mar 13, 2013 at 02:37:00 PM PDT

  •  This entire process is a lawyer's dream (5+ / 0-)

    and an absurd set of hoops to jump through for anyone who doesn't make a living off absurd sets of hoops for people to jump through.

    I agree with Horace: pay nothing to the crooks,  particularly if they are after you for medical debts you can't pay because you don't have insurance. Let the bloodsuckers suck air: otherwise they will suck your blood until you are dead.

  •  hotlisted in case I need it (1+ / 0-)
    Recommended by:
    jamesia

    thank you for this

    In the time that I have been given,
    I am what I am

    by duhban on Wed Mar 13, 2013 at 04:05:17 PM PDT

  •  7 year period starts when? (4+ / 0-)

    It is stated in the posted diary that a debt will remain on a CR for 7 years. Is that 7 years from the date of the original default with the creditor or from the date the collection agency started collection procedures?

    For example: I default on a CC with the original creditor in April, 2006, so the 7 year period ends March, 2013. But the CA started collection in April, 2007, a year later. Which date is the start of the 7 yr period?

    And, can one debt appear twice on a person's CR from the original creditor, the CC company, AND the collection agency?
    Thanks

    "Women shall not control their own reproduction." Fallopians 10:16 --Republicans' new Eleventh Commandment.

    by BlueMindState on Wed Mar 13, 2013 at 04:22:50 PM PDT

    •  I am guessing that it starts when it is "written (0+ / 0-)

      off"

      But I am also guessing more important is if they can try to obtain a judgment?

      What state are you in?

    •  This is what someone replied to the same (1+ / 0-)
      Recommended by:
      JerryNA

      It sounds about right in my experience:

      If they are right

      1. Clock starts on each tradeline (original after last payment- I think)

      2. After sale a new tradeline pops up (to a CA)

      3. This does not affect tho the SOL (selling the debt, I hope I am not confusing if say the SOL is 5 years, it doesn't matter if I sell in year 4, they still should only have 1 year to collect)

      a credit report shows all of your current credit accounts and your payment history on each..

      each entry is called a tradeline, and negative tradelines, can stay on your report for 7 years, like with a past due bill you paid late from 2003.

      But, something like Federal Judgements can stay on indefinately, especially in cases of criminal activity that caused the problem, or in the cases of Bankruptcy which can stay on as long as 10 years.

      one thing to keep in mind. a creditor normally has 7 years to collect on a debt, before it ages off your report.. In most cases the original creditor makes a few attempts over the next 6-12 months to contact you regarding your debt. If they don't get anything during that time, then the debt is sold to a 'collection agency' who;s sole mission in life is to take money from consumers that do not know the law..

      so, then a few months later you start getting calls from someone claiming to be from the original creditor, and as soon as they have verified you are the chump they are looking for, then they open a new tradeline and the collection clock starts all over again, and even though that bill you should have paid in 2003, would have dropped off in 2010, now you have a new line for the same debt, but this one started in 2005, so now you have 2 times the damage to your report, and another 2 years to put up with the calls. Every time that debt is sold, a new company will try to wrangle some cash out of you, and the moment, the very second they confirm you are who they are looking for, BINGO.. a new tradeline appears on your report, and the 7 year collection clock starts all over again.

      realize one thing.. NOTHING YOU DO AT THIS POINT WILL MAKE THIS A POSITIVE LINE ON YOUR CREDIT.

      even if you paid the line in full now, it would go to the collector that bought the debt, not the original creditor, and that COLLECTIONS line will still be there..

      stop talking to people about your debts over the phone,

      make every payment on time, every time.

      do all of your business in writing,

      the only reason you should ever be calling any creditor is to get a contact persons name, mailing addrss and direct dial telephone number.

      It is always easier to avoid new tradelines being created than it is to get a collection agents tradeline removed once it hits your file..

      give no info out over the phone unless you made the call and have an established relationship with the person you are calling. If they call you, or you arent sure if the person you are talking with can help you resolve the problem at hand, then HANG UP THE PHONE!

  •  I talked to them. (2+ / 0-)
    Recommended by:
    Odysseus, NM Ward Chair

    No problem. They demand a monthly amount, and I tell them that I pay 25 bucks a month on these hospital bills. They can have the 25, or I can write them a bad check for the amount that they request. I let them chose. They always take the 25. And the only one that has gone to collection has not been reported to the CRBs. That one went to collection before I even got the first bill, as they had sent it to a previous work address.

    Only thing more infuriating than an ignorant man is one who tries to make others ignorant for his own gain. Crashing Vor

    by emmasnacker on Wed Mar 13, 2013 at 05:01:19 PM PDT

  •  This (7+ / 0-)

    Doesn't appear to cover identity theft issues. If the bad debt attributed to you is false, due to ID  theft, you should talk to the collection agency and get them to send you a fraud packet and affidavit. Been there, done that and got the debt removed.

    If you can dodge a wrench, you can dodge a ball! - Rip Torn ("Dodgeball")

    by cka on Wed Mar 13, 2013 at 05:42:40 PM PDT

  •  We had a record club that insisted on (3+ / 0-)
    Recommended by:
    crose, JerryNA, jamesia

    billing us for a bill we had already paid. We asked them, in writing, repeatedly, to send us copies of each of our bills and exactly what we'd ordered so we could check our records. They sent a long, continuous (no breaks) list of CDs we'd gotten, but they were not dated and no billing records were sent - in fact, they seemed not to have actual records of what CDs were billed on what occasion, and what check paid each specific one of the bills. Horrific record keeping. We wrote again - please send copies of our bills and payments.  

    Etc.

    Finally, we got a letter from a collection agency. We wrote them back saying how great it was to hear from them, and could they please help us get information about our bill from the record club. We sent photocopies of all of our correspondence with the club. The next thing we heard was from the record club saying they'd consider our bill paid up. I expect they really heard it from the collection agency for their incredibly incompetent record keeping.

    We all understand that freedom isn't free. What Romney and Ryan don't understand is that neither is opportunity. We have to invest in it.
    Julian Castro, DNC 4 Sept 2012

    by pixxer on Wed Mar 13, 2013 at 06:57:12 PM PDT

  •  Re: statute of limitations (4+ / 0-)
    Recommended by:
    progdog, misslegalbeagle, jamesia, JerryNA

    The diarist talks about whether a debt is within. Or without the statute of limitations (SOL).  Most debts are covered by a SOL.  This means that a creditor may sue you only within x number of years.  Different states have different limitations periods for different types of debt.  For instance, in your state, it may be the case that a credit card company cannot sue you for debt after 3 years, or 5 years, or 7 years.  

    Be careful to note, however, that creditors have a huge influence in writing these laws.  In almost every state, the limitations period starts over every time you acknowledge that the debt is valid.  You typically do this in two ways.  The most common is by making a payment on the account.  Let's say the SOL is 2 years in your state.  You got laid off and have not made a payment for the last 18 months.  The collection agency has contacted you and learned that you are still unemployed.   They will desperately try to get you to pay anything, even $5.  If you do so, they now have 2 more years to hope you get a job so they can sue you and garnish your wages, intead of six months.

    The other way to acknowledge the debt is to simply acknowledge the debt.  Every time a collector calls you, they will try to get you to admit that you owe the money.  Every time you are foolish enough to do that, the SOL starts over.

    Also remember that some debts, like student loans, are not subject to a SOL.

    There is no higher achievement in life than to make a child laugh.

    by Fiddler On A Hot Tin Roof on Wed Mar 13, 2013 at 11:41:24 PM PDT

  •  Well done, this would have helped me years (1+ / 0-)
    Recommended by:
    jamesia

    ago. It's very hard to figure this out on your own. Thanks for doing this for people who need it now. I hope they read it!

    "extreme concentration of income is incompatible with real democracy.... the truth is that the whole nature of our society is at stake." Paul Krugman

    by Gorette on Thu Mar 14, 2013 at 09:20:33 AM PDT

  •  As an Attorney Unlike Yesterday's Rec'd Diary (5+ / 0-)
    Recommended by:
    hungeski, thm, flo58, JerryNA, jamesia

    This has useful and accurate info.

    Things I think to add.

    1.) 99% of Collection Agencies violate Federal Law ("CA"'s). They know they do. They don't care. They are actually very limited in what and how they can say/do things. Keep track of EVERYTHING. I had a client who because they contacted after I faxed a cease contacting ended paying him. If they leave messages I would keeep copies. There are a lot of things they cannot say, and hours.

    2.) You want to settle the debt BEFORE it gets to an attorney. The industry standard is 50 cents on the dollar. They will most always take 50 cents. Often less if you actually owe a lot of debts and can pull the "i am considering bankruptcy card".

    3.) Read EVERYTHING you get in the mail. Know the FDCPA. Keep it all. Everything you send keep a copy and yes send certified. I'dsuggest having someone else send it certified so that they can do an affidavit for you.

    4.) You can stop them from calling. Depending on your plan do so. If they don't they are violating federal law and a lot of firms will get them to pay you.

    5.) If litigation comes up, ANSWER ANSWER ANSWER. Do not let them waltz to a Default Judgment. That is what they dream about. I just settled for 35% for a friend because I filed a motion for a more definite statement. They don't want to spend time messing around, often they will dismiss.

    Other website I think is CreditKarma? Anything asking you for a credit card is not legit.

    "Written off" on your credit report doesn't mean not pursuing.

    Some rules do not apply to Original Creditor.

    IMPORTANT: Something people forget. They are actually human. Everyone wants the same. But, when you demonstrate serious hardship they do listen and make happen. Job pay reduction, lay off, relocate, divorce, death, medical. Convey it.

    You can make an offer to them. If it is 1 payment they will take less. Again 50% they'll take every day.

    DO NOT LISTEN TO MOST INTERNET SITES. They are most all wrong.

    If something seems wrong look up the company and the practice or just call a consumer lawyer. Don't wait.

    These are the letters I use and I do always ask for verification/validation. Depending to Cease talking.

    Sample:

    This is what I sent for my Client and after they contacted they owed him money.

    First part is "verification request" during the Verification period they must cease all activities and stop pursuing unless they verify (I would always do that). Second part is or could be another letter that is "stop calling me" and if you don't (this CA didn't (CA-Collection Agency)) bam they owed him attorney fees and 1000.

    VERIFICATION (As they say in initial letter you have 30 days to  . . . ) Note- much of this they don't actually have to provide you as many internet sites will claim. Verification/Validation is actually very little info, however, I saw no harm in leaving.

    I. DISPUTE AS TO CLAIM
    I am sending this letter to you in response to the phone calls I keep receiving from you.
    Be advised, this is not a refusal to pay nor acknowledgment, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b) that your claim is disputed and validation is requested.  
    This is NOT a request for “verification” or proof of my mailing address, but a request for VALIDATION made pursuant to the above named Title and Section and other law. I respectfully request that your office provide me with competent evidence that I have any legal obligation to pay you.
    Please provide me with the following:
    •    What the money you say I owe is for;
    •    Explain and show me how you calculated what you say I owe;
    •    Provide me with copies of any papers that show I agreed to pay what you say I owe;
    •    Provide any papers related to the alleged account, or otherwise between you and whom I believe is the true debtor;
    •    Provide a verification or copy of any judgment if applicable;
    •    Identify the original creditor;
    •    Prove the Statute of Limitations has not expired on this account;
    •    Show me that you are licensed to collect in my state; and
    •    Provide me with your license numbers and Registered Agent.
    •    Provide me with actions taken to the subject parcel as I have not lived there in over 10 years;
    If your offices have reported invalidated information to any of the three major Credit Bureau’s (Equifax, Experian or TransUnion), said action might constitute fraud under both Federal and State Laws. Due to this fact, if any negative mark is found on any of my credit reports by your company or the company that you represent I will not hesitate in bringing legal action against you for the following:
    •    Violation of the Fair Credit Reporting Act
    •    Violation of the Fair Debt Collection Practices Act
    •    Defamation of Character
    If your offices are unable to provide the proper documentation as requested, I will require at least 30 days to investigate this information and during such time all collection activity must cease and desist.
    Also during this validation period, if any action is taken which could be considered detrimental to any of my credit reports, I will consult with my legal counsel. This includes any information to a credit reporting repository that could be inaccurate or invalidated or verifying an account as accurate when in fact there is no provided proof that it is.
    If your offices fail to respond to this validation request within 30 days from the date of your receipt, all references to this account must be deleted and completely removed from my credit file and a copy of such deletion request shall be sent to me immediately.

    II. NOTICE OF MY CONSIDERATION OF YOUR PHONE CALLS AS HARASSING

    Further, I am writing in response to your constant phone calls.
    I have already informed you numerous times of the following:

     . . .

    According to the Fair Debt Collection Practices Act,   [15 USC 1692c] Section 805(c): CEASING COMMUNICATION: You must cease all communication with me after being notified in writing that I no longer wish to communicate with you. Therefore, I demand that you stop calling me at home, at work, on my cell phone or at any other location!
    In accordance with the federal FDCPA, now that you have received this "stop calling" letter, you may only contact me to inform me that you:
    •    are terminating further collection efforts;
    •    invoking specified remedies which are ordinarily invoked by you or your company; or
    •    intend to invoke a specified remedy.
    •    I also would allow communicating offers regarding that the account has been settled otherwise
    Be advised that I am well aware of my rights! For instance, I know that any future contact by you or your company violates the FDCPA and that since you already have my location information, calls made by you or your company to any 3rd party concerning me violates section 805(b)2 of the FDCPA.
    Be advised that I am keeping accurate records of all correspondence from you and your company, including tape recording all phone calls. If you continue calling me I will pursue all available legal actions to stop you from harassing me and my family.
    In the future direct all correspondence intended to me to my attorney (cc’ing me on any mailed items):

    [CLEVELAND ATTORNEY]

    I look forward to hearing of the resolution of this matter. Again I cannot stress enough that my attorney is fully aware, and should you take any such action threatening my ability to obtain my medications by garnishing what is known to be social security disability payments, we will file suit. We are taking this matter extremely seriously as it makes very little sense to us.
    Yours Truly,

  •  I'm having a problem right now. (0+ / 0-)

    About 25 years ago I had a student loan. Then I had open heart surgery and I got all the necessary paperwork to have the loan forgiven.
        And everything was fine until last year, After all these years they want that money back.
        I'm on SSI, and that money doesn't come in my name it's in my mother's name.
        Around Christmas time I hot a phone call from one collection agency, the guy said whatever he said in an intimidating manner. Then I said well my check isn't in my name, it's in my mom's name. And that was the last I heard from that collection agency.
         Then a couple months ago I got a call from a different collection agency.
        The first agency knew they had their hands on an uncollectible debt, But they sold it to a different company.

         The thing is my health situation is worse than it was when I had the debt forgiven. And now just thinking about this makes me so upset I can feel my blood pressure rising. Last week just thinking about this my heart started racing to the extent that I went to the emergency room and they had to inject me with something that stops my heart then restarts it. It's like a reset button.
         Not only that but a neurologist I was sent to diagnosed me with narcolepsy and said I was not fit for work or drive or stand up for long hours or carry anything heavy or any of that.
          And not only that The only way they know to remedy narcolepsy is with stimulants, which I can't take because it affects my heart.
          I asked them to stand by their diagnosis and state that on paper to the collection agency but they refused. So I told them I would not be back as a patient.

    "Too much. There's too much fucking perspective now." David St. Hubbins

    by nellgwen on Thu Mar 14, 2013 at 09:42:43 AM PDT

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