Looking for advice

[xman27]

What is the name of your state? - Arizona

First, let me apologize if I am asking for advice that has already been given many times. I have not read through every thread.

Here is my situation...

Fell into a financial hole a little more than a year ago, didn't handle it great because I didn't know how to and was expecting finances to pick up sooner than they did. Ended up defaulting on credit cards, anded with a little bit less than 20k in debt. Considering offers I hyave received from creditors, I could settle for a bit less.

I have planned on paying everything back, but have been waiting til I have picked my finances up enough before attempting to negotiate or reconsolidate. I have come close to being in such a position at times, but things have fallen through, and I have remained in the payday loan trap (been contributing good money to the payday/title loan industry over the past year, I am embarassed to admit. Thing that kills me is I make all those payments on time, but that doesn't build me up a credit line anywhere, or allow me to get discounted loan fees).

Anyways...while I have not answered many phone calls from creditors, I have answered some. Recently I supposedly got my first summons, for a relatively small debt. Or, I supposedly did. On the date it was supposedly "served" I was out of state. It was delivered to roomates, perhaps. Hypothetically, lets say I never received it or was notified. This is for a relatively small debt.

Tonight, I spoke with a local debt collector for a Wells Fargo debt, I believe this agency deals mostly with Wells Fargo debts. 1.) The man I spoke with, I have name and extension, told me I had not made a payment on the debt in 10-11 months (before the agency supposedly gained the rights to the debt) - which was inaccurate, showing me that the man did not have accurate information regarding what I owed. 2.) In lieu of the above, I have not knowingly been served proof that this agency has the rights to the debt. 3.) This collection agency, despite being small, has a poor standing with the better business bureau, and is the subject of a few other complaints that deal with the notion that they are not willing to deal with debtors in order to obtain reasonable solutions and they are unwilling to provide documentaion such as account statements and receipts.

I was told this evening that they wanted to reach an agreement and work with me to obtain a solution by the end of this month. We had a discussion, I did not acknowledge the legitimacy of the debt's full amount, but expressed a desire to negotiate and come up with a payment plan. I told the man if he gave me a week I could determine my options (using a consolidation firm or simply figure out what I could budget right now), and get back to him.

I was then told that the end of the month was too late, I pretty much needed to agree to a solution and submit a payment tonight or legal action would be initiated tomorrow.

I don't know if it will be. I'll add that this man did not even know the statute of limitations in Arizona, which is where he works, and I live. I'll also add I have pondered disputing a small amount of this debt, and/or making a counterclaim, on the basis that Wells Fargo has charged me exorbitant fees (relative to a different account), which were illegal according to myunderstanding of the law, resulting in direct and non-direct damages. Not sure if thats a possibility or a rout I would take if it was, but I wanted to add that to this post. btw, this is also a relatively smaller debt, but bigger than the other debt I speak of.

Currently I plan to possibly start working with a debt consolidation firm as early as next month, and at least consolidate some of my debt. Or, in cases where legal action is taken, I may call the creditors myself to negotiate payment plans and start paying next month. Starting next month I should be able to budget at least $100-200 per month (more if payday loans were refinanced or consolidated at lower interest rates), more in later months (I am educated with a degree and one way or another my income will pick up by the end of the year), although starting to pay next month may hurt my ability to get out of high interest debt (i.e. payday loans). I am not currently considering the option of filing for bankruptcy.

I don't have any specific questions here, but given my situation, I would love some advice from people familiar with what I am going through. What might you do in my situation?

Also, while I am posting this, one question, slightly off topic. Anybody here have tips re: auto title loans / refinancing. I have recently considered selling my car simply because, if I sold it, I would be able to pay off all high interest debt, have money left over, and would be able to finance a new used car at maybe 20% APR. When I take out a title loan on my current car, I can't get much less than 180%. It doesn't make sense to me, so I'm thinking/hoping I'm missing something here.

Thanks in advance for any replies.What is the name of your state?

[FlyingRon]

Title loans on cars are exploitations. Sell the car.

Debt collectors do not need to know what the statute of limitations are (and certainly it's not 11 months). SOL doesn't make the debt go away, just makes it impossible to get a civil judgment. The lawyer who brings the lawsuit against you is the one who needs to know what it is (and often or not, they don't care either).

Of course, debt collectors will tell you that today's your last chance, etc... as a matter of practice. The be-back bus don't stop here.

Debt consolidation firms are frequently rip-offs, even some of the non-profits. Be very careful. You're just rearranging the deck chairs on the titanic.

[Ladynred]

1.) The man I spoke with, I have name and extension, told me I had not made a payment on the debt in 10-11 months (before the agency supposedly gained the rights to the debt) - which was inaccurate, showing me that the man did not have accurate information regarding what I owed.

They rarely do, and even if they do, they will almost always exaggerate and/or twist the truth to create a greater sense of urgency to get you to pay up immediately.

2.) In lieu of the above, I have not knowingly been served proof that this agency has the rights to the debt.

"Served" proof ?? What are you expecting to be served ? They don't have to produce any proof to you that they have the rights to collect. Those 'rights' are in the agreement(s) you signed when you took on the debt, it's in the default clauses of every credit card agreement and every loan document. If there is a lawsuit, then you would have the right, under the discovery process, to be shown this 'proof'.

3.) This collection agency, despite being small, has a poor standing with the better business bureau, and is the subject of a few other complaints that deal with the notion that they are not willing to deal with debtors in order to obtain reasonable solutions and they are unwilling to provide documentaion such as account statements and
receipts.

You are under the misconception that collection agencies and junk debt buyers even HAVE such documents. If the original creditor still OWNS the debt, then an assigned collection agency can usually get those documents, but they are usually loathe to do so. If the debt has been sold to a junk debt buyer, they don't have that documentation, it is never included in the junk debt portfolios they buy and they are even more loathe to try to get it as it would cost THEM money to get it from the original creditor - IF they OC still has it somewhere.

If you want 'proof' then you must request validation of the debt in the proper fashion. You can find more info on validation at [url]www.creditinfocenter.com[/url].

The bogus deadline of 'you have to pay NOW" is just the way they work, it's part of their tactics. No 'legal action' ever happens overnight, the courts, and most CA's, simply cannot do that. IN threatening action they cannot legally take or do not actually intend to take, the collector is in violation of the Fair Debt Collection Practices Act (FDCPA). I suggest you read the Act very closely.

Consolidation is, as Ron says, rearranging deck chairs on the Titanic - it's not generally a good idea and is most often a bigger trap. Having only $100-200/mo to throw at debts isn't going to cut it, especially if you owe large balances. On large debts, collection agencies will scoff at such amounts.

As far as reaching an agreement with any debt collector, if it's not in writing, it never happened. NO verbal "agreement" will ever hold up.

My suggestion - get off your duff and get a job - or 2 - you need income. Waiting around for the job that is 'worthy' of your degree isn't going to help as the debt hole just gets deeper day by day.

[xman27]

thanks for the advice thus far. Far as needing income, I am aware, I'd elaborate more on what I am doing/have been planning on that end but am not looking to discuss it in a public forum.

What I am more particularly interested in hearing at this point is what you guys would do in my shoes as it relates specifically to negotiating with any collectors, and/or replying to any legal action in the event it is brought against me, and/or whether there are any consolidation firms out there that might be an exception to their rule. Or, if there are any truly superior resources on the web (or threads on this board) that you could point me to relative to these subjects. I will read the FDCPA in more detail at some point within the week.

Again, thanks. btw, I am aware that the statute of limitations is 3 years here, I mentioned the fact that the collector I spoke with did not seem to know or care about that simply to help establish incompetence. Which I know is common for a debt collector.

[FlyingRon]

Originally Posted by xman27

What I am more particularly interested in hearing at this point is what you guys would do in my shoes as it relates specifically to negotiating with any collectors, and/or replying to any legal action in the event it is brought against me, and/or whether there are any consolidation firms out there that might be an exception to their rule. Or, if there are any truly superior resources on the web (or threads on this board) that you could point me to relative to these subjects. I will read the FDCPA in more detail at some point within the week.

The FDCPA doesn't address the debt itself, just keeps the collectors from being too egregious in the collection process. Sure, send them a letter to stop calling, send them a validation request, but that's just stalling.

Again, thanks. btw, I am aware that the statute of limitations is 3 years here, I mentioned the fact that the collector I spoke with did not seem to know or care about that simply to help establish incompetence. Which I know is common for a debt collector.

It means nothing for competence. The SOL doesn't matter to the collector. The SOL is only important to the lawyer filing the the lawsuit against you.

What I would do? Get your life in order and stop playing games. This doesn't seem to be some unexpected calamity like sudden medical debt, just plain stupid overextension. Take a serious look at your finances. Sell the car and do without or get a clunker to drive. Sell any other high priced baubles. Find a cheaper place to live. Take on a second job. ... and above all else, find and stick to a budget. Not that I agree with everything he says, you could do worse than following this guy's recommendations:

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