Old (disputed) debt is haunting me

[hbarcat]

In 2002, I got divorced and ran up debt on 3 credit cards. I talked to all three companies and set up payment plans and paid them back over the next three years. One company said I still owed them money (about $800) which I disputed and tried repeatedly to get them to be more specific about why they thought I owed them more than my records showed. I phoned them repeatedly asking them for their records showing how much I had paid and on what dates, and though they kept promising over the phone to send me that information they never did. I wrote them formal letters three times repeating the request and telling them that unless I received something from them I would consider the debt paid, but they ignored all three letters. So I quit talking to them and everytime they sent me another invoice for the money (while the interest charges and late fees piled up) I kept refering them to the letters I sent (which they claimed to know nothing about).

I was told by some people to pay an attorney to fix this mess even though it would likely cost me more than the disputed amount and I was told by others that the company would eventually give up and write it off and the problem would go away. I talked with an attorney and he quoted me a price for helping me that made me gag, so I talked myself into choosing the "ignore it until it goes away" option.

Since then, I've gotten letters from several different collection agencies demanding the original amount plus fees and interest and I've simply written them a letter telling them about my dispute with the original company and then I don't hear from them again. Now I've got a letter from a law firm representing yet another collection agency demanding $3,455.30 and I believe it's past time for me to do something about this

The question is: how badly have I screwed myself by waiting this long before taking care of it? But, more importantly, what should I do about it, now?

[Spector_Ray]

Originally Posted by hbarcat

In 2002, I got divorced and ran up debt on 3 credit cards. I talked to all three companies and set up payment plans and paid them back over the next three years. One company said I still owed them money (about $800) which I disputed and tried repeatedly to get them to be more specific about why they thought I owed them more than my records showed. I phoned them repeatedly asking them for their records showing how much I had paid and on what dates, and though they kept promising over the phone to send me that information they never did. I wrote them formal letters three times repeating the request and telling them that unless I received something from them I would consider the debt paid, but they ignored all three letters. So I quit talking to them and everytime they sent me another invoice for the money (while the interest charges and late fees piled up) I kept refering them to the letters I sent (which they claimed to know nothing about).

I was told by some people to pay an attorney to fix this mess even though it would likely cost me more than the disputed amount and I was told by others that the company would eventually give up and write it off and the problem would go away. I talked with an attorney and he quoted me a price for helping me that made me gag, so I talked myself into choosing the "ignore it until it goes away" option.

Since then, I've gotten letters from several different collection agencies demanding the original amount plus fees and interest and I've simply written them a letter telling them about my dispute with the original company and then I don't hear from them again. Now I've got a letter from a law firm representing yet another collection agency demanding $3,455.30 and I believe it's past time for me to do something about this

The question is: how badly have I screwed myself by waiting this long before taking care of it? But, more importantly, what should I do about it, now?

Did you send those formal letters via Certified Mail Return Receipt? That's the first way they got you by ignoring them. Without a signed and dated return receipt they can claim anything they want because it's your word against theirs. I would attempt one more time to send those letters by CMRR and see if they reply to those letters. If not, then you have the return receipts you can present to legal counsel if you so choose. Make sure you carbon copy the letters that way they are exactly the same as the ones you sent them. I know this isn't helping much, but it could start you on the right track.

[hbarcat]

Originally Posted by Spector_Ray

I would attempt one more time to send those letters by CMRR and see if they reply to those letters.

I should have done that in the first place. I wonder if that would be useful now since I did save copies for myself and I can reprint them and send them again. It couldn't hurt.

[Spector_Ray]

Originally Posted by hbarcat

I should have done that in the first place. I wonder if that would be useful now since I did save copies for myself and I can reprint them and send them again. It couldn't hurt.

It couldn't hurt and anytime I present someone with a certified letter, you can almost hear them pucker up!

[SMASH]

Originally Posted by hbarcat

I should have done that in the first place. I wonder if that would be useful now since I did save copies for myself and I can reprint them and send them again. It couldn't hurt.

Too late. They've sold the debt to a collections agency. The credit card company has written it off against whatever they sold it for - probably 10c on the dollar.

It would have been better to deal with them properly (receipts for the letters, lawsuit, etc.) than a collections agency.

Your only hope might be if you can prove to the cc company you never owed it, or that you'd paid it - then they might be able to call off the collections agency, but given their past response and the fact that they have no incentive to help I wouldn't count on their co-operation.

Find out the laws in your State about what a collections agency can or can't do in harassing you - and they will harass you. Be prepared for abusive calls at home at all hours, and to your employer ... that's where you might be able to screw them if it's illegal for them to call other parties (or if other angencies have lost expensive harrassment suits for doing so, even if it is leal), which is the case in some places.

Knowing the laws and citing them is the only way you can get those scumbags to cop any kind of respectful tone towards you.

At this point it sounds like you have no proof of your claims, so the basics of it that you've ignored a debt and now you're screwed.

Ask the collections agency to provide proof of why it's owed. Also send them an exact copy of their claims letters only with them owing you money for your time. Registered receipts, etc. of course. Say you're billing them for your time. Try it with the cc company too. If they don't pay (they won't, of course) sell those to a collections agency.

Make sure you know the laws about billing in your State/country first though, lest you be accused of some kind of fraud.

[Masher88]

It's situations like this that make me understand (NOT condone) why one would take a shotgun into some of these businesses and start blazin'!!! You should sue for damages, lawyers fees and court costs and your mental anguish for their harrassment and possible bad credit.

Check out www.theconsumerist.com it has tips and strategies for getting big companies to listen up.

[iamlowsound]

Next time they call, just start asking to talk to a supervisor, then ask to talk to his supervisor and so on, until you are talking to the person at the top. Then start explaining things to them, but make sure you know your stuff. If they don't listen, start trying to sell them something, that should make them mad enough to hang up. Just the other day I had someone from my bank call and try to sell me something, they wouldn't listen when I said no, so I tried selling them the snow tires that I have for sale. They were really confused and hung up.

lowsound

[Baryonyx]

It's time to get a lawyer on your side. Good legal advice never hurts.

[hbarcat]

Thread bump for update and conclusion.


I did what I should have done in the first place and got professional legal advice (thanks, Baronyx and others). He told me to get all my records, letters and receipts together and figure out exactly what I owe versus how much they say I owe and we'd go from there. It turns out I did legally owe the original creditors some money but just not as much as they claimed (which was why I disputed it in the first place)

He also said that I screwed myself by failing to resolve the situation and letting it get into collections (obvious in hindsight ) and if they wouldn't answer my letters to my satisfaction then I should have taken legal action against them and forced the issue to be resolved by the courts.

Since I did ignore it for so long the lawyer informed me that I would also be liable for interest since 2002. The collection company was saying that I owed some $3,800 plus court costs because they had been tacking on every little monthly fee, penalty and maximum interest rate (24%) that they could think of from '02- present.

I found out exactly what is so valuable about a lawyer: he's seen this a million times before and he can tell you how it's going to turn out. He told me to negotiate with the company's lawyer and it will come down to competing documents. I ended up settling for the amount of what I legally owed the original creditors (a lot less than what they claimed I owed) plus 10% interest. If I had taken care of this properly back in '02, the courts would likely have decided this same result except I wouldn't have to pay interest and I wouldn't have a stupid collection on my credit report. Oh well, I learned a lesson.


So what have I learned? :

-Don't ignore a legal problem just because it's too much of a hassle or expense to take care of right away. Just do it.

-Like it or not, lawyers are valuable. You are paying them for their knowledge and experience in an environment that is both alien and hazardous to the average citizen.

- In civil disputes over money, it's usually not about who is right and who is wrong, it's about lawyers making a cost benefit analysis to determine how much something is worth and settling for that amount.

And one other miscellaneous thing my lawyer said that I thought was interesting:

-- Lawyers, and especially judges, don't want to hear you talk - they want to see documents. They only time they want to hear you talk is if you are saying "please refer to this document".



I'm sure there are some lessons that I missed, but this whole thing has tired me out and I'm not that smart to begin with, so it'll have to do.

[hbarcat]

Originally Posted by iamlowsound

Just the other day I had someone from my bank call and try to sell me something, they wouldn't listen when I said no, so I tried selling them the snow tires that I have for sale. They were really confused and hung up.

lowsound

That's really funny! More people should start doing this.

[MJ5150]

Originally Posted by hbarcat

-Like it or not, lawyers are valuable. You are paying them for their knowledge and experience...

According to Jim Gaffigan, they also come in handy when it comes to reading. If you're into reading complex documents, you can pay them a set fee and they will read the document for you and tell you what it says.

-Mike