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Debt collector issue (supposed amt over $7000)

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cjm307

Junior Member
What is the name of your state? colorado
I and my wife signed a lease for an apartment. She took care of rent but apparently she hadn't paid since we started living there. We left after 3 months of non-payment. The landlord decided to collect using a debt collection agency. The collection agency went after me since I was the one working. I have been in communication with them on this said amount (which I still dispute). I wrote a letter requesting not to be contacted by phone and also that I would be pay an amount of $100 every month till I was paid up. I did not get a reply to my letter. I sent $150 in April, $100 in May. On both occasions I got a receipt of payment. I couldn't pay in June because I had a lot of financial engagements (medical) that came up and I wrote the collection agency a letter regarding my situation and that I would continue in July with the $100 payments (which was to be made on the last week of every month). Then on 07/28/2007, I got a message from a friend staying with me that someone had tried to serve a summons to me (I was not around) and it was from the same collection agency. My friend did not sign or collect the documents. I planned on sending a $100 payment on 07/31/2007.
I would like to know how to go about handling this situation?
 


Debt Guy

Senior Member
I would like to know how to go about handling this situation?

I assume you are legally responsible for the debt.

So, the best course of action would be to pay.

Avoiding the service of the summons is a non-solution. State laws allow for you to be served by publication. So, avoiding the summons just lays a big wad of ignorance on your head. You will wake up one day with your bank account and wages garnished and screaming bloody murder that you never got a notice, yada, yada. They tried, you dodged service and the judge said okie-dokie and signed the judgment order.

Paying $100 or so every once in a while is not a solution. If you are in default, the creditor has the right to demand payment in full immediately. They have no obligation to work with you.

That being said, you should contact the CA and arrive at a payment agreement. Just make sure the agreement is in writing. Then keep your end of the bargain.​
 

cjm307

Junior Member
I am responsible for some of the debt not all of it according to my wife. Apparently she had sign over a check of hers to the landlord and if that is the case, then he is mis-representing the amount owed him right?
If they are taking my payments of $100 and sending me a receipt, why would I all of a sudden need an agreement in writing when they weren't complaining about the payments I made without anything in writing at first?
 

Chien

Senior Member
OP – You asked about how you should handle the situation. You received good advice, but you appear to want to dispute it. Fair enough. Let me tell you why you’re going to pay literally and figuratively

You don’t give enough information to draw an accurate picture, but it’s possible to draw a “pretty close” hypothetical. Note that pre-judgment interest in your state is the Federal Funds rate plus 3%. For the hypo, let’s assume that’s 10% (maybe high, but not more than 1-2%) and you owed exactly $7,000 (low according to your post title). That’s $700 per year or $175 per quarter. Let’s assume that you moved at the end of March. You’ve paid $250, credited first to interest, and we don’t know how much your wife paid. Excluding your wife’s payment, in the hypo, you’ve paid $75 against a principal of $7,000.

You’re not moving fast enough and, even with what your wife paid, they’ve sued you – they don’t have to “complain in writing” first. There’s no indication that you’ve talked to them or have a written agreement. They took the payments but, if you had spoken, they’d tell you they were too low. On the other hand, from the check, they now have information on a bank account to levy, when they do take judgment.

In your state, they can serve you personally, by substituted service or by publication, so you will be served. By the time that happens, accrued interest may have wiped out your $75, and you’re back to square one.

By the time they get the judgment, you’ll be behind square one. And the judgment will probably include attorney’s fees as well as costs and will earn post-judgment interest. They won’t accept a when-you-can-make-payments offer of $700-$1,000 per year. You’ll never catch up, much less get ahead.

Even if your wife paid $500, they’ll just credit that, add interest, fees and costs, and you’ll be back around where you started, if not worse. You know all the numbers; do the math, and then read DG’s response again.
 
Its a common misconception that "If I send them money and they take it, that they accept that as an arrangement."

Wrong.

CA's will cash any check you send them so long as it doesn't have a restrictive endorsement on it. I had someone try to be slick today and send in a $500 check marked settlement in full on a $5,000 balance. The wonderful people in accounting may have been born at night, but it wasn't last night.

The big thing is to make an acceptable payment arrangement. Meaning that the CA has said in writing that they agree to the terms. Then you have to follow them. You wouldn't call your mortgage company and tell them you'll pay $100 per month, so the same logic applies to a past due rent balance.
 

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