Collections practices

[lucey2]

What is the name of your state? MO

I have an outstanding auto loan (less than 180 days). The bank has been calling and also attempted to recover the vehicle. It is in my husband's possession and I don't know where he is keeping it. (We have been separated for 3 years). Today the bank called again and said they are going to do a charge-off on it and I will have to pay the "$12,000" on it.

**Is this considered the validation of debt from the creditor since it is the first time she has mentioned anything close to the amount due? I have not received anything in writing at all except a past due notice from the bank.

Also can anyone recommend a site where I can get more information on regulations the creditors must follow from first notification of a late payment up to suing? Also any options they have. Thankyou.

[JETX]

"Is this considered the validation of debt from the creditor since it is the first time she has mentioned anything close to the amount due?"
*** No. A proper validation would include a complete, detailed account history and a copy of any document proving your obligation (agreement with your signature).

"Also can anyone recommend a site where I can get more information on regulations the creditors must follow from first notification of a late payment up to suing?"
*** This one is really easy.... there aren't any. Simply, the main law that protects a debtor from abusive tactics is the FDCPA (Fair Debt Collection Practices Act). However, the FDCPA only applies to 3rd party debt collectors. The law makers felt that the original creditor would not abuse a customer that they have a direct business relationship with.

What will likely happen is that the creditor will continue to try to 'work' this debt until he eventually assigns it to a 3rd party (more aggressive) debt collector. That is when the protections of the FDCPA come in. An online copy of the FDCPA can be found at [url]http://www.ftc.gov/[/url]
Another good site is [url]http://www.creditinfocenter.com/[/url]

Good luck, you are at the very beginning of what will likely become a real headache. Stay on top of it and document EVERYTHING in writing.

[lucey2]

Thank you for the information. One question, Does the original creditor have to send it to a third party collector? Since she is threatening a charge-off, will she attempt to collect herself or does she have to assign or sell it to a third party? Sorry, two questions. Thank you.

She can do either one.

If the original creditor chose, they could sue you tomorrow. You signed an agreement with them and did not keep it.

But the original creditor - either a car dealer or bank is not in the business of chasing debtors. They'd prefer to do banking or car dealing - that is their expertise and more profitable. It makes no sense to sell millions of cars and collect 100 debts. Most likely the original creditor will send you a few letters and then sell the debt to a collection agency or give an attorneys office permission to collect it. (Amex does this). These people are in the debt collection business and collect millions of debts. Scale makes it more profitable for the company to do business this way.

The collection agency will hound you for a long time. They may or may not sue. They are unlikely to sue if you can convince them you have no assets. When they first write, ask for validation. I always ask for three things - Proof that I owe the debt (My signed contract and a copy of all payments, fees, and interest), Proof that they can collect the debt (Since I do not know this company, I ask for either proof that they bought the debt or were assigned the debt. This proof must contain a signature of an officer of the original creditor.) Proof that they are licensed to do business in my state. I think those are reasonable things to ask for and usually the CA decides it is not worth the hassle. Also mention in the letter somewhere that you need to receive the validation so you can discuss your options with your ATTORNEY. (Even if you do not have one) As I said everything is about money and when they hear attorney they would prefer to sue for 50 default judgements in the time it would take to battle one attorney even if you don't have a leg to stand on.

I do not purpose being a deadbeat, but bad things happen sometimes. Divorces happen. People steal things, etc and when you are in trouble, use the above.

As a side note, did you buy the car or did you jointly buy it with your husband. If you bought it, you could claim that it was stolen )(If it was insured) He might be arrested, but so be it.

Sean

[bigun]

One thing you might leave out of the validation letter is the question about liscensing.
You can check that yourself. If they are not oprating legally, you may want to keep that info in reserve-don't tip them off their may be a problem and have them immediately come into compliance and then claim it was a bonifide error.
We had a poster here named Wert who was sued by a ca in Fl. and he used that as an affirmative defense and the judge dismissed the lawsuit.

[url]www.lawdog.com[/url] and click on "state statutes" then, select your state and it'll have debt collection information.

[lucey2]

I received a letter from the original creditor (first one) stating "as previously advised your account is payable in full. Failure to comply has resulted in the referral to our Recovery Department which is currently reviewing your file for possible legal action. To avoid our recovery procedures, you must contact me within ten days."

Does the "possible legal action" mean that the original creditor is going to sue or that they will sell or assign this to an attorney who is considered a 3rd party collector? Thankyou.

[JETX]

"As a side note, did you buy the car or did you jointly buy it with your husband. If you bought it, you could claim that it was stolen"
*** Yet, another really dumb post. If you were to do that, you would make YOURSELF subject to a criminal charge of making a false report.
Kind of like what is facing Michael Jackson over his alleged injuries.

[JETX]

"Does the "possible legal action" mean that the original creditor is going to sue or that they will sell or assign this to an attorney who is considered a 3rd party collector?"
*** From the first of your post, I would assume that their 'legal action' would be repossession of the vehicle (by their 'recovery departement').
Or they could sue.