What is the name of your state (only U.S. law)?
South Carolina
Ok so we were stupid a few years ago and had some debt. Debt collector sent us to their lawyers and we ended up settling on a monthly repayment schedule.
They just sold the debt to a different law firm. We have not missed a payment and have been very communicative with the previous lawyer.
Just received letter in mail that the new firm is suing us for entire amount again!
I have the original agreement and payment schedule the first law firm agreed to and we were paying. What are my rights? What are key things to say when we get on the phone tomorrow with the new firm? This is frustrating :-(
Thanks,
Tyler
Unfortunately, this is all too typical when dealing with debt collectors and trying to voluntarily pay them anything. They take the payments but sometimes they don't apply it to the balance. They may have applied it to interest charges or other fees. Then they turn around and sell off the principal balance to a new junk debt buyer who then files suit for the whole amount as if the settlement agreement never existed.
In some cases, when a debtor makes monthly payments to a debt collector, the debt collectors see them as "low hanging fruit" or a "pushover" because they see that you are willing and able to make agreements with them and to make payments to them. Sometimes they threaten file a lawsuit as a way to motivate you to pay them more each month.
Contrast that to someone like me who made it so difficult for them to collect any money from me that my debts ended up going uncollected until the Arizona statute of limitations passed on them. There is light at the end of the tunnel. I no longer even get any phone calls or letters from them. They have given up trying to collect anything from me. And for good reason. They know they will never get a penny of it from me.
You didn't give us a lot of information here to work with. Did you get the settlement agreement in writing? This is why you must always get a settlement agreement in writing before paying them anything.
If you have it in writing, send a copy of the settlement agreement plus copies of the cancelled checks showing you made all the agreed upon payments on time to the new debt collector by certified mail.
If they do sue you, bring that information plus the certified mail receipt with you to court and show it to the judge.
This also illustrates why, if you out there in the reading audience, are thinking about settling your debts, it is often better to do one lump sum settlement payment rather than monthly payments. And it shows why it is important to get it in writing that the debt is "settled in full" for that one lump sum settlement payment, and that the junk debt buyer (or original creditor if it is still in the hands of the OC) agrees to not sell the remaining balance to anyone. They will send you a 1099-C and you may have to pay taxes on it, but see I.R.S. form 982 for more information about that.