Want to settle with a debt collector. Live in CT, have a few questions.

[dmarr82]

Hello. I am a resident of CT, and was hoping someone would be kind enough to take a moment and answer a few things for me.

I have a debt collector after me for an old unpaid CC acct. The acct is mine, and I do actually owe the money. Although I am not looking to create a sob story, I fell on hard times, and was unable to make pymts on the CC acct.

The debt collector has called my house several times, and have also notified me by mail. They claim they have purchased the debt from the CC co. (no reason to not believe them). It is well within the statute of limitations, and they are licensed to do business in my state (have checked).

I would like to settle with them, and have two basic questions.

1. Am I entitled to see what the debt was owed at the time they purchased?
2. Am I entitled to know how much they purchased the debt for?

#2 is important, as that will enable me to make a solid offer. My understanding is that they typically purchase accts for pennies on the dollar. So if the dollar amount that I owe is $5k (which it is), and I know they purchased the acct for $500, I don't want to be paying them anywhere near $5k. But I understand they have to make a profit, so I think the best way to go is offer them $750 - paid in full immediately, and if they try and up the amount, I can do that a bit.

And of course, I will happy to hear any advice and opinions anyone might have. Thank you!

 

[single317dad]

1. Am I entitled to see what the debt was owed at the time they purchased?

Yes. As part of their complaint with the court, or as supporting evidence later, they will provide an amount which represents the total value of your debt, interest, fees, as of the date they obtained it. This, along with records going forward, will satisfy their "accounting" requirement, and will be the amounts addressed by the affidavit.

2. Am I entitled to know how much they purchased the debt for?

No. As evidence, they will probably submit "proof" that they purchased a bundle of debts for a total price, usually thousands of debts for millions of dollars. No further accounting of the purchase amount will be provided or is necessary.

#2 is important, as that will enable me to make a solid offer. My understanding is that they typically purchase accts for pennies on the dollar. So if the dollar amount that I owe is $5k (which it is), and I know they purchased the acct for $500, I don't want to be paying them anywhere near $5k. But I understand they have to make a profit, so I think the best way to go is offer them $750 - paid in full immediately, and if they try and up the amount, I can do that a bit.

They don't just want to make a profit on your debt. Consider that they've purchased thousands of debts for 3-15% of their value. Consider further that many of those debtors will never pay them a penny. If they never collect on 1/3 of those debts, that's money they have to collect from the paying folks just to break even. Add in court costs, attorney fees, and overhead, and they'll need to collect a significant portion of each debt to profit. Usual first settlement offers range from 70-80%. Settlements can generally be had for 20-50%.

 

[dmarr82]

Thanks for the reply.

Another question - can they put a lien on my bank account without a court order? My understanding is they can NOT do this without a judgment in their favor, but just wanted to check. Thanks.

 

[single317dad]

Thanks for the reply.

Another question - can they put a lien on my bank account without a court order? My understanding is they can NOT do this without a judgment in their favor, but just wanted to check. Thanks.

Liens, levies, garnishments, and seizures would all come only after a judgment. As a rule (though it may vary from place to place), you'd be notified of a wage garnishment through your employer, you'd receive posted notice of seizure of property, but liens and levies may happen without your knowledge.

 

[dmarr82]

Liens, levies, garnishments, and seizures would all come only after a judgment. As a rule (though it may vary from place to place), you'd be notified of a wage garnishment through your employer, you'd receive posted notice of seizure of property, but liens and levies may happen without your knowledge.

Thanks!

So, I had a convo with he debt collector 3 days ago. They gave me the first #, which was 3k. I said I'd settle for 1.5k - higher than I was originally looking to go, but figured if they started off that high... They said no, and came back with 2.5k. I said no, they said that is the lowest they could go. I came up to 2k, and they were stuck on 2.5k. I told them I would put a check in the mail that day, and they would have it in the mail in 2-3 days. No. They offered to give me pymts; I said, why would you do pymts on 2.5k, when you can get 2k in a few days? Again, they said that 2.5k is the lowest they could go. I said no, told them that they could contact me back in due time if they felt like, that my offer would still be on the table, and we then ended the convo.

I am a little confused as to why they would say no. Should I be expecting to get a call in a few days time?

 

[Mark Maroon]

I am a little confused as to why they would say no. Should I be expecting to get a call in a few days time?

I have no clue if they will call you to accept your offer, but I guarantee you that they are not thinking "I am confused, as to why would he say no to our offer?"

 

[dmarr82]

...but I guarantee you that they are not thinking "I am confused, as to why would he say no to our offer?"

Eh, I am missing the meaning of your post here... :/

 

[TigerD]

Eh, I am missing the meaning of your post here... :/

I would have considered sending your file over to legal. The collector now knows you have $2k to pay at any time. Best to just go ahead and sue you now, before someone else gets it.

TD

 

[single317dad]

Thanks!

So, I had a convo with he debt collector 3 days ago. They gave me the first #, which was 3k. I said I'd settle for 1.5k - higher than I was originally looking to go, but figured if they started off that high... They said no, and came back with 2.5k. I said no, they said that is the lowest they could go. I came up to 2k, and they were stuck on 2.5k. I told them I would put a check in the mail that day, and they would have it in the mail in 2-3 days. No. They offered to give me pymts; I said, why would you do pymts on 2.5k, when you can get 2k in a few days? Again, they said that 2.5k is the lowest they could go. I said no, told them that they could contact me back in due time if they felt like, that my offer would still be on the table, and we then ended the convo.

I am a little confused as to why they would say no. Should I be expecting to get a call in a few days time?

Both parties exercised their most powerful negotiating tool: the ability to walk away from the table. Perhaps one or both parties will return in the future to negotiate further; perhaps not.

 

[single317dad]

I would have considered sending your file over to legal. The collector now knows you have $2k to pay at any time. Best to just go ahead and sue you now, before someone else gets it.

TD

Like a bankruptcy attorney.

 

[dmarr82]

So, how could I have a better handled the situation?

 

[single317dad]

So, how could I have a better handled the situation?

I'm not entirely sure you could have handled it any better. Sometimes if you simply ignore payment demands, the creditor will make lower and lower settlement offers until finally suing. That's a dangerous game to play though, because they can sue at any time and win the full amount plus huge fees.

You could make threats such as filing for bankruptcy or becoming uncollectable in some way, though they've heard all that before and those threats are empty unless you truly mean to follow through on them.

At this point you could tell them to accept your offered settlement "before I decide to pay rent with it", or simply cease communication and wait for the inevitable lawsuit.

 

[Zigner]

I'm not entirely sure you could have handled it any better. Sometimes if you simply ignore payment demands, the creditor will make lower and lower settlement offers until finally suing. That's a dangerous game to play though, because they can sue at any time and win the full amount plus huge fees.

You could make threats such as filing for bankruptcy or becoming uncollectable in some way, though they've heard all that before and those threats are empty unless you truly mean to follow through on them.

At this point you could tell them to accept your offered settlement "before I decide to pay rent with it", or simply cease communication and wait for the inevitable lawsuit.

When I was a kid and had a few discussions with bill collectors, I had mentioned the possibility BK to one collector without any intention of filing. Without missing a beat, the collector said "oh, give me the contact information for your attorney and we'll contact him." Yeah, bill collectors know the tricks.