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"Good Faith" letter.

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MrSeagull

Junior Member
West Virginia.

This is an odd situation,
I went to school here in WV at a tech school. I had three loans, two federal and a third one that was odd. It was called a STAR loan. For some reason, I was paying $50+ a month to them and they payed $7 to the school a month. I would get letters from the school asking for payment for the amount the STAR loan was set for. After about year and a half of payments I lost my job and was unable to pay. The STAR loan had no option for forebearance and after two missed payments they dropped me and I was reffered to a collection agency.
Around late 2003 I got regular and polite calls asking if I could pay. They where very supportive to my plight of being unemployed. At the turn of 2004 I stopped hearing from them. Two weeks ago I get a letter for the amount due from some company I never heard of. So, I assumed they bought the debt and I would have to deal with them. I just now got a new job (though I had a few between then and now, but no means to contact the original collections agency.) I called them today to try to set up some payment plans. They pressured me into beleiving the only option I had was to set up six payments of $580+ a month. I was told this would be the only way to "satisfy the client". I accepted the plan fearing I would be hounded by phone calls and letters. Then they pressured me saying that the only way to "satisfy the client" again was to give them a method of automatic debit by wither bank or credit card. I realize now I was an idiot for giving them that information. What I hope to do is send them this letter once I know for sure I cannot afford the amount they demanded.

START

Dear Sir or Madam,

This is in regards to an amount owed of 3530.87 on the account of XXX – XXXXXXX. In response to a letter received from you on May 12th, 2006, a phone call was made on May 30th, 2006 in attempt to negotiate a form of payment plan. The plan of $583.33 payments at the end of each month was agreed upon after being told that I had no other option.

After a period of unemployment, a new occupation was acquired which started on June 1st, 2006. At the time of the aforementioned agreement, I was not aware of the exact amount of compensation I would acquire from the new position. Upon realization of the amount I received, I regret to inform you that the amount of $583.33 is impossible to pay. I have made a good faith payment of $30.87 on June 5th, 2006 as a sign of my desire to settle this debt. I still wish to make payments on the amount, however, so I would like to make an arrangement of a monthly payment of $150 a month.
During the initial conversation I gave information on my debit card under the pressure of believing that I had no choice. It is my request that the plan to charge my card $583.33 at the end of each month be removed along with all records of the card information. I intend to make the payments mention before at the same schedule, however I do not wish for them to be automatic payments.
If an agreement can not be reached over this matter I will be forced to contact the bank in which the card belongs to and block payments. I do not wish to resort to this, however. I would have never given the information to set up an automatic debit had I not been pressured during the phone conversation under the pretense of not being able to set up monthly payments without the information.

I wish to convey my sincere desire to settle this debt. I hope an agreement can be made on this situation as I can assume that it is neither your, nor my desire to resort to litigation over this matter. As another sign of good faith, the first payment of the proposed amount has been included with this notice.

With regards,

END

It was suggested to me to start at $150 because they might be more willing if I can compromise to $200, which is doable. I've read that the best way to communicate with these people is through letters. Is there anything I should change about this letter? Is there any advice for my situation?

Thank you.
 


MrSeagull

Junior Member
By they way, the " $30.87 good faith payment" was "suggested (more like demanded)" by the phone representative.
 

TigerD

Senior Member
Without knowing the specific dates, it is possible that your loan was nearing the SOL. In West Virginia the SOL is 5 years. That is also understanding that this was a non-federal backed loan -- there is no SOL on those. Your good faith payment restarted the SOL.

The collection agency want 6 payments because that's the way we work. We aren't allowed to charge interest and have no desire to stretch payments out over three years. In cases like that it is much better for us to say okay and collect two or three payments, then file suit. At least after a judgment is issued we can get interest on the loan you are demanding for repayment.

That said, I think you might want to see if you can borrow the money from somebody to pay the debt. Regardless of your intent to pay and ability to follow through on the payments, the CA isn't going to wait three years for their money.

As for the letter, good luck. You already agreed to a payment plan. They aren't going to authorize an extended plan without a judgment.

DC
 

Ladynred

Senior Member
They also aren't going to ignore the fact that you gave them your bank info and your credit card number to charge the amounts to. If you don't close that card and the bank account, they will just take what you supposedly agreed to (not in writing = no agreement) and completely ignore your letter.. and you'll wind up with the whole amount eventually on your card or taken out of your account because that's what you gave them.

They got what they wanted - they intimidated and pressured you into a so-called 'agreement' and you coughed up the bogus 'good faith payment' that re-started the SOL. In debt collection, there is no such thing as 'good faith'.. you either pay what they want or don't and they might sue you. As DC said.. they don't want to wait that's why they make such wallet-numbing demands.
 

MrSeagull

Junior Member
That good faith payment I mentioned earlier hasn't been made yet. I only gave them a debit card number, should I get a new card? I can't remember the exact date I got this loan...
Also, nothin has been in writing yet.
 
Last edited:

gawm

Senior Member
MrSeagull said:
That good faith payment I mentioned earlier hasn't been made yet. I only gave them a debit card number, should I get a new card? I can't remember the exact date I got this loan...
Also, nothin has been in writing yet.
How do you know it hasn't been made yet? Call the bank, find out if it has been debited, if not go down to the bankToday close that account and open a new one.
 

MrSeagull

Junior Member
I got ahold of the CA and made a deal. The payment was dropped to 350 a month for ten months. This is doable, but I have to keep the card on their records for automatic debit. The assured me that they wil not charge me more then we agreed upon. I'm thinking about opening a new account with my bank and either using the old one just to make payments to the CA with or using the new one for that.

As long as I make te monthly payments, there is no way that they can take more without my permission, right?
 

gawm

Senior Member
I guess you'll find out. Keep us posted. (I would read debtcollector's & Ladynred's advice again if I were you)
 

Ladynred

Senior Member
As long as I make te monthly payments, there is no way that they can take more without my permission, right?
Don't bet on it. You have nothing in WRITING - which means you really have no agreement either.

Use the account and the debit card number you gave them ONLY for paying them and leave ONLY the amount they're due in that account. Use your other account for your daily living, otherwise you may be in for a VERY rude surprise one day.
 

TigerD

Senior Member
Ladynred said:
Don't bet on it. You have nothing in WRITING - which means you really have no agreement either.

Use the account and the debit card number you gave them ONLY for paying them and leave ONLY the amount they're due in that account. Use your other account for your daily living, otherwise you may be in for a VERY rude surprise one day.
I just want to point out that making a debit for more than agreed on or on different days than agreed on is a violation of the FDCPA and most CAs won't do that.

I have heard so many complaints on this board about it happening that I have to assume that is happened to somebody, but I've never seen it.

When a CA is working with debtors we have to be above reproach in our handling of the matter -- especially the finances. We are under very close scrutiny on how we handle our clients money and the trust accounts required by licensing boards.

There is no less an obligation when we handle the consumers finances. Especially when we set up a payment plan. I can only speak for the agencies I have worked at and my own. I am very vocal about the moral obligation of the consumer to repay their debt and very much aware of my moral obligation to handle the consumers' financial affairs with the same security and integrity I handle my own. And I think most senior collections management feel the same way.

DC

PS: When I pay any of my bills it is from a restricted access account. I never give anyone access to my main account. Mistakes can and do happen all the time. Opening a separate account just seems like a sensible thing to do.
 

Ladynred

Senior Member
I have heard so many complaints on this board about it happening that I have to assume that is happened to somebody, but I've never seen it.
Unfortunately it seems to happen far too often. Many people on other boards have told the sad tale. It always seems to be those that made an 'agreement' over the phone and got nothing in writing. There have been a few who HAD a written agreement and the CA dipped in when they felt like it anyway. Most people are too scared to go after them in court, or lack the funds to pay a lawyer.
 

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