Collection Company Buys Student Loan

[DSWILSON11205]

What is the name of your state? NY

Thank you for your website and all of the great information that you provide for consumers. I received a call from a debt collector yesterday. He told me that they are NOT a collection agency, because they purchased this account (from another creditor who bought my student loan) and I had to make an immediate settlement with them. At the time of the call he told me what the current balance was but immedately gave me a much lower balance if I would agree to pay ASAP. I told him I wanted to check my records to verify that the debts was correct, and would contact him on Monday afternoon. This account is so old (18yrs) a original loan in 1986 made to me while attending college in San Diego, CA; it does not even appear on my current credit files. I have checked my old credit reports and found that there were delinquent debts of 120+ days that occurred in 11/94. How should I handle it? I have researched the statues of limitation on student loans and found out that there are no limitations. So I'm confused, can they demand payment of a 18yr old loan that they bought?

David, NYC

[stevek3]

Originally Posted by DSWILSON11205

What is the name of your state? NY

Thank you for your website and all of the great information that you provide for consumers. I received a call from a debt collector yesterday. He told me that they are NOT a collection agency, because they purchased this account (from another creditor who bought my student loan) and I had to make an immediate settlement with them. At the time of the call he told me what the current balance was but immedately gave me a much lower balance if I would agree to pay ASAP. I told him I wanted to check my records to verify that the debts was correct, and would contact him on Monday afternoon. This account is so old (18yrs) a original loan in 1986 made to me while attending college in San Diego, CA; it does not even appear on my current credit files. I have checked my old credit reports and found that there were delinquent debts of 120+ days that occurred in 11/94. How should I handle it? I have researched the statues of limitation on student loans and found out that there are no limitations. So I'm confused, can they demand payment of a 18yr old loan that they bought?

David, NYC

He's telling the truth, they are not a collection agency. They are a debt buyer. One's a third-party agent, the other actually owns the debt. He obviously didn't say he's not bound by federal laws relating to debt collection, so don't confuse yourself.

With respect to your other question, you've already answered it. There is no statute of limitations. However, I would suggest that you request from them whatever contracts and other documentation they have of the original loan. There is no statute of limitations, but they still have to prove the existence of the underlying contract and account. It's already been sold and resold. It's been my experience, being a debt buyer of some portfolios myself, the more links on the chain of title, the less likely the necessary documentation will still be in existence. Even if it is in existence somewhere out there, it may be difficult to locate. It certainly won't hurt you to ask for copies of what they have. If I knew the name of the debt buyer, I'd probably be able to give you a better answer.

[Ladynred]

Of course they can, student loans will follow you to your grave !

The collector is full of crap, they ARE bound by the FDCPA as a 3rd party collector if they bought a defaulted debt ! It makes little difference that they purchased the debt, they obviously ARE collecting, they ARE 3rd party, so they must obey the law. Lots of the junk debt buyers like to claim they're not collection agencies and the law doesn't apply to them because they are now your creditor by virtue of their purchase. There can be only ONE original creditor..and they're NOT it.

So, read the FDCPA (at FTC.gov) and learn your rights. [url]http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm[/url]

Here's a few excerpts from the Act:

§ 803. Definitions [15 USC 1692a]

As used in this title -- (4) The term "creditor" means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.

(6) The term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 808(6), such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.

As for their claim that they are not debt collectors, you can read this FTC Staff opinion letter:
[url]http://www.ftc.gov/os/statutes/fdcpa/letters/demayo.htm[/url]

[stevek3]

Originally Posted by Ladynred

Of course they can, student loans will follow you to your grave !

The collector is full of crap, they ARE bound by the FDCPA as a 3rd party collector if they bought a defaulted debt ! It makes little difference that they purchased the debt, they obviously ARE collecting, they ARE 3rd party, so they must obey the law. Lots of the junk debt buyers like to claim they're not collection agencies and the law doesn't apply to them because they are now your creditor by virtue of their purchase. There can be only ONE original creditor..and they're NOT it.

So, read the FDCPA (at FTC.gov) and learn your rights. [url]http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm[/url]

Here's a few excerpts from the Act:


for their claim that they are not debt collectors, you can read this FTC Staff opinion letter:
[url]http://www.ftc.gov/os/statutes/fdcpa/letters/demayo.htm[/url]

Snoozing through the debt collection posts on autopilot again? You really should start forcing your negligent butler to make more regular trips to Starbucks. Make him get you the extra-extra-extra grande' on an hourly basis, or whatever the stupid Starbucks pretentious name for the big size is. The guy merely said they now own the debt, and all payments must now be made directly to them, since they are now the current creditor. All true. Where you're coming up with the fodder for your latest rant, I have no idea.

[DSWILSON11205]

Originally Posted by stevek3

He's telling the truth, they are not a collection agency. They are a debt buyer. One's a third-party agent, the other actually owns the debt. He obviously didn't say he's not bound by federal laws relating to debt collection, so don't confuse yourself.

With respect to your other question, you've already answered it. There is no statute of limitations. However, I would suggest that you request from them whatever contracts and other documentation they have of the original loan. There is no statute of limitations, but they still have to prove the existence of the underlying contract and account. It's already been sold and resold. It's been my experience, being a debt buyer of some portfolios myself, the more links on the chain of title, the less likely the necessary documentation will still be in existence. Even if it is in existence somewhere out there, it may be difficult to locate. It certainly won't hurt you to ask for copies of what they have. If I knew the name of the debt buyer, I'd probably be able to give you a better answer.

THANK YOU for your information. As to the issue of asking for the contracts and other documentation they have on the original loan, should I send them a "§ 809. Validation of debts [15 USC 1692g] letter?

The company name is Capital Management Services. I have only been contacted by phone at the moment and don't have any written information of the the debt or the company location. He said they bought the debt from Account Portfolios, INc. who bought it from Mitchell Sweet & Assoc. who bought the loan originally. What happens in the event they can not produce the the information I ask for to prove that I still owe the debt.

Since a long period of time has elasped the settlement hs incurred intrest the excceds the original loan. As I said before he did quote me a much lower settlement payment if I agreed to pay ASAP. I only commetted to returning his call on Monday. Should I verbally ask for the information during the phone call? And what is my next step after the phone call?

[stevek3]

Originally Posted by DSWILSON11205

THANK YOU for your information. As to the issue of asking for the contracts and other documentation they have on the original loan, should I send them a "§ 809. Validation of debts [15 USC 1692g] letter?

The company name is Capital Management Services. I have only been contacted by phone at the moment and don't have any written information of the the debt or the company location. He said they bought the debt from Account Portfolios, INc. who bought it from Mitchell Sweet & Assoc. who bought the loan originally. What happens in the event they can not produce the the information I ask for to prove that I still owe the debt.

Since a long period of time has elasped the settlement hs incurred intrest the excceds the original loan. As I said before he did quote me a much lower settlement payment if I agreed to pay ASAP. I only commetted to returning his call on Monday. Should I verbally ask for the information during the phone call? And what is my next step after the phone call?

Good old Account Portfolios. When all the savings and loans were going belly-up in the late 80's, they started their business by purchasing large portfolios of non-performing assets from Resolution Trust Corp., which the government originally created to dispose of the savings and loan assets, including guaranteed student loans. They also serviced some performing loans. They were absolutely notorious for playing fast and loose with the Fair Debt Collection Practices Act. They eventually entered into a consent judgment with the feds for $300K.

Their backup documentation, if originally purchased from the RTC, was outstanding. But you indicate it was purchased from Mitchell Sweet & Associates. I'm assuming Account Portfolios sold your loan through a broker as part of a much larger portfolio deal. Which is how Capital Management eventually ended up with it now.

There's only one way to find out what Capital Management now has, and that's to ask. Fib and state you went through your records, and do not recall ever taking out a student loan when you went to college. That way you'll get some cooperation from them.

I suspect they may have actually sent out some correspondence to you, but if they didn't, they actually committed an FDCPA violation themselves. They had to read you the Mini-Miranda riot act. Regardless, forget about that for now. First see if they have any copies of contracts and your account itemizations. If you're lucky, they have nothing. Be very specific of what you want from them in the way of documentation. If you want to talk with them, make sure you follow-up your phone calls, including requests for copies of documents, in writing.

[DSWILSON11205]

THANKS STEVEK3 for your reccommendations. Capital Management called me againg today. Left a message that I had to cll back buy 9pm EST. I returned the call at 5:15pm. I told him that I had not recieved any information by mail about the account. He told me they sent information to me aready (it was to my old address). I find it suspect how they could have my current phone number and not my current address. I did give him my current address and ask him to send me all the information about the "original loan". He said that the leter that they wer sending is a form letter with the current creidtor information...Serman Equsitions..... He said that I could call back if I wanted the information about origainal loan etc. and he would give it to me over the phone. I declined to take any information at that time. I want to have copies of all the info. that they have.
Agter I recieve the letter, should I reply via certified mail that I want them to send me all the original information that they have? What if they tell me they don't have it? How can they prove that I really still owe on a loan I don't think exsists?

[stevek3]

Originally Posted by DSWILSON11205

THANKS STEVEK3 for your reccommendations. Capital Management called me againg today. Left a message that I had to cll back buy 9pm EST. I returned the call at 5:15pm. I told him that I had not recieved any information by mail about the account. He told me they sent information to me aready (it was to my old address). I find it suspect how they could have my current phone number and not my current address. I did give him my current address and ask him to send me all the information about the "original loan". He said that the leter that they wer sending is a form letter with the current creidtor information...Serman Equsitions..... He said that I could call back if I wanted the information about origainal loan etc. and he would give it to me over the phone. I declined to take any information at that time. I want to have copies of all the info. that they have.
Agter I recieve the letter, should I reply via certified mail that I want them to send me all the original information that they have? What if they tell me they don't have it? How can they prove that I really still owe on a loan I don't think exsists?

That's Sherman Acquisitions, not Serman Whatever It Is You Said. In that case, Capital Management has nothing but a computer printout. Sherman sends the account to them online with just basic information. Sherman would have the actual records, if any exist. Send identical written requests to both Capital Managment and Sherman. Send both by certified mail. Sherman Acquisitions has several offices, but I'm assuming the office for your debt is the office located in South Carolina.

[Ladynred]

Sherman Acquistions will never validate, instead, they are likely to send you an Affidavit -- which is garbage and proves nothing. If you get such an affidavit from them you MUST dispute and reject it too.