Collections on a repo

[Peppers]

What is the name of your state? Missouri

My husband had a car repoed back in 2000, with a balance of about $9000.
He had been paying $50mo. to a collection agency up until the end of October.

A different collection agency has offered him a settlement of about $3,600 if he can pay it in full. He agreed, and asked them to send us a letter with the settlement amount before he sent a check. The letter, dated November 2nd states that the agreement is good if the funds are received by November 28th.

To make a long story short, my husband is borrowing the $3,600. from his 401k. He put in the request, a week later the papers arrived, we filled them out...and are waiting for the funds to be deposited in his bank account.

The collection agency wants us to send a post dated check for the entire amount dated November 30th. We do not know exactly when the funds will arrive. When I refused to send a check for money I don't have yet, they replied "then we will sue him and garnish his wages". I asked them to please be patient and they refused.

I'm going to assume that our funds should be available by next week at the most. If they agree to take the money, will that still count as a full settlement agreement? or should I request another paid in full letter?
Do we have any rights? (time wise for the settlement)

Do collection agencies usually prefer to garnish rather than wait a few more days for a check?

Thanks

[moburkes]

We can't predict what they will do, however, a lawsuit is time consuming. Ask for another letter. It can't hurt.

[debtcollector`]

Originally Posted by Peppers

A different collection agency has offered him a settlement of about $3,600 if he can pay it in full. He agreed, and asked them to send us a letter with the settlement amount before he sent a check. The letter, dated November 2nd states that the agreement is good if the funds are received by November 28th.

Deadlines are common. You have to in order to create urgency on the part of the debtor.

Originally Posted by Peppers

The collection agency wants us to send a post dated check for the entire amount dated November 30th. We do not know exactly when the funds will arrive. When I refused to send a check for money I don't have yet, they replied "then we will sue him and garnish his wages". I asked them to please be patient and they refused.

Then you have not met and refused to meet the terms of the settlement offer.

Originally Posted by Peppers

I'm going to assume that our funds should be available by next week at the most. If they agree to take the money, will that still count as a full settlement agreement? or should I request another paid in full letter?

No it would be honoring the settlement offer. The offer had a clock.

Originally Posted by Peppers

Do we have any rights? (time wise for the settlement)

Yes -- you could have chosen to accept of the offer and make payment or not. You chose to not accept the offer and meet the conditions.

Originally Posted by Peppers

Do collection agencies usually prefer to garnish rather than wait a few more days for a check?

Debtors allows say they just need a few more days. If they said they are going to sue and garnish, then that's what they have to do.

As long as you make the $3,600 payment, you will still owe the balance, but they may work out payment arrangements on the balance.

DC

[Peppers]

Thanks for your replies. I understand that we're pretty much screwed when it comes to the settlement, but I have a couple of questions.

debtcollector, in your collecting experiences, what is the reason for offering a settlement, with an experation date of 3 weeks from the day the account was placed in their office?

Also have you ever re-offered a settlement when the debtor tells you their funds have arrived, say a week later?

I guess what I'm trying to get at is... are there any protocalls that these 3rd tier agencies usually try and fallow?

They called yesterday and pushed for me to send them a postdated check for for the amount. Why would they want me to send a bad check?

Thanks again

[debtcollector`]

Originally Posted by Peppers

Thanks for your replies. I understand that we're pretty much screwed when it comes to the settlement, but I have a couple of questions.

debtcollector, in your collecting experiences, what is the reason for offering a settlement, with an experation date of 3 weeks from the day the account was placed in their office?

The purpose of the offer is to get paid or open communications to get paid.

Originally Posted by Peppers

Also have you ever re-offered a settlement when the debtor tells you their funds have arrived, say a week later?

Yes, but never the same offer. Can't do the same offer legally. When we put a clock on it, we have to take the offer off the table or face FDCPA violations.

Originally Posted by Peppers

I guess what I'm trying to get at is... are there any protocalls that these 3rd tier agencies usually try and fallow?

Every agency has its own policies and procedures, but the bottom line at all of them is collecting the most money possible for its clients.

As a collector, I would want to know why you were only paying $50 a month when you were able to amass more then $4,000 in a 401K during that time. Given that you apparently have resources you have yet to draw on, I wouldn't put the $3600 offer back on the table. The lowest I would go is 70%, which is $7300. And that would not include a payment plan. I would allow you 4 weeks to pay the remaining $3,700 on the offer and make it clear that there will be no extensions. Or I'd take the $3600 and make payment arrangements on the balance. Probably something like $450 month for 12 months. Or you stipulate to judgment and $225 month for two years (side note- If you stipulate to judgment and are even one day late, I can enforce the judgment).

If you can get a better deal for you than above, take it. The collector is either inexperienced or doesn't care.

If you do settle the account you will receive a 1099 for the dismissed money. You have to include that as income on your taxes at the end of the year or face difficulties with the IRS.

DC