Help! Financial experts! Bank workers! UPDATE!!!

[minnie1928]

I'm working with my mom and dad to straighten out their financial situation, which is not good. I took them to Consumer Credit Counseling in October, we set up a plan and started it in December. Three of their creditors have turned the accounts over to collection agencies. One of the collection agencies turned the account over to an attorney.

The account that was turned over to the attorney has me worried....Does anyone know what we can expect? I know very little about the debt, I have no idea how old it is. Mom had been in denial (my dad's very sick) and had been throwing the mail away because she couldn't deal with it at the time. I've since convinced her that she needs to stop doing this! I'm hoping to have mom fax a power of attorney, stating that they can talk to me in lieu of her, tomorrow morning, however I'd like to have a feel for what to expect when I call them.

To say I'm stressed about this is an understatement, but Mom is already under alot of stress and I'm trying to jump in and help to take some of the load off of her.

Any advice you guys could provide would be appreciated in ways you can't imagine!

Thanks!

 

[InstImpres]

Kelly

Check your PM's

Good luck

 

[disneymom3]

Keep in mind that when you are working with these people, they have generally purchased the debt for pennies on the dollar so if you are trying to settle on a payment amount, you may be able to get them to lower the payoff total armed with that information. Also, do NOT let them set up a situation in which they do an electronic check for your mom's account. You are then giving them access to your money and some of these organizations are not very scrupulous.

 

[cash206]

You might want to check out www.creditnet.com and www.creditinfocenter.com. These sites have discussion forums where you can learn a lot and ask questions too. You might also want to check www.pennlawyer.com - A PA lawyer whose site actually has a lot of good info on dealing with collection agencies (instead of the typical, uninformative legal marketing sites), plus some recorded messages from debt collectors..worth a listen! Good Luck to You!

 

[adisneymama]

I have worked collections in the past. The main thing I can tell you is that the laws vary state to state. Be very honest with the collections person or atty. They will be more willing to work with you if you are honest. Don't agree to do more than your mom can afford to do. It will make it worse in the end if she doesn't keep the promise made to the collections person. Contact is very important. If you agree to pay $20/mo and something happens that you can't or it is going to be late, call them. Otherwise they think you aren't trying.

Pm me if you need further info. Without knowing the type of debt and the full situation it is going to be hard for anyone to tell you exactly what to do. Good luck and stay positive.

 

[Tiggerlover91]

About a year or so ago, DH and I had one of our debts go deliquent and then immediately went to a lawyers office. I was worried and didn't know what to do. I called them to try to work out payment arrangements and they wanted so much more than I could handle...over $125 a month over the next 3 months. I eventually turned the debt over to CREDIT ADVISORS and it was paid off in a little less than a year. They (the phone company...that's the deliquent debt I had) didn't want to accept the proposal, but when Credit Advisors started sending them the $24 a month, well, let's just say they didn't return the checks. I would call and see what you can work out. Visit the link I've left you about Credit Advisors. I've been with them for 3 years in January and I will be debt free by April!!

I hope all works out for your parents. Keep us posted!

Blessings,

Denise

 

[minnie1928]

Well, first of all....Thank you very much to everyone that offered their advice/assistance. You can't imagine how much it means to me!

Anyway, I called the attorney this morning and was very polite and explained my parents situation. Their debt was for about $1100 and the attorney agreed to consider it paid in full if we paid $563. So I will be sending a check tomorrow, once I get a copy of their offer in writing. They also said that they would report the payoff to the credit report agencies and issue a letter to us stating that the debt has been satisfied. Thankfully mom had just gotten a holiday bonus that will cover most of this. The rest will be scrounged up from here and there.

They still have a long way to go, but I think they can do it. I can not say it enough, thanks so much to everyone here at the DIS. You can't find a better group of people!

 

[Tiggerlover91]

Well, first of all....Thank you very much to everyone that offered their advice/assistance. You can't imagine how much it means to me!

Anyway, I called the attorney this morning and was very polite and explained my parents situation. Their debt was for about $1100 and the attorney agreed to consider it paid in full if we paid $563. So I will be sending a check tomorrow, once I get a copy of their offer in writing. They also said that they would report the payoff to the credit report agencies and issue a letter to us stating that the debt has been satisfied. Thankfully mom had just gotten a holiday bonus that will cover most of this. The rest will be scrounged up from here and there.

They still have a long way to go, but I think they can do it. I can not say it enough, thanks so much to everyone here at the DIS. You can't find a better group of people!

Glad everything worked out for your parents!

 

[sandy3550]

Anyway, I called the attorney this morning and was very polite and explained my parents situation. Their debt was for about $1100 and the attorney agreed to consider it paid in full if we paid $563. So I will be sending a check tomorrow, once I get a copy of their offer in writing. They also said that they would report the payoff to the credit report agencies and issue a letter to us stating that the debt has been satisfied.

I just wanted to add a little note to this that they probably did not tell you (they might have- but just in case) Your mom will get a 1099 form for tax purposes for the remainder of the debt $537 as miscellaneous income. They consider the part of the debt that isn't paid back as money that is basically put into your pocket. Just wanted to let you know before it comes as a surprise in January after the taxes have been filed. HTH Sandy

 

[seashoreCM]

Do not begin paying on a debt you do not know the origin of.

Do not begin paying on a debt you dispute.

Do not begin paying on a debt that was discharged by bankruptcy, often some other collection agency comes after you for it years later.

Do not send payment until after you receive in writing all promises and plans the collection agency or creditor (person who wants to be paid) made to you.

Do not accept forgiveness for a debt you dispute. Continue to dispute it.
(1) That is an admission that the debt is valid which you don't want to do.
(2) You would have to pay tax on the amount forgiven which on average is a third of the debt (see previous reply).

If you are unsure of a debt, ask the collection agency for proof, including a copy of the loan application and signed loan documents. If the collection agency cannot prove that a debt is valid, they have no right to collect.

Estimate how long it will take to pay off the debt(s). If it is more than three years, consider bankruptcy. There are a lot of factors involved, bankruptcy is less desirable if you have lots of equity in a home, but quite desirable if you have lots of high interest debt or credit card debt. Often you can do Chapter 13 which is likely to preserve your home and also eliminate much of the interest both past and future. Don't do this alone, have professional financial help. A major benefit of bankruptch is so that you don't keep throwing good money after bad.

Go to court if you are sued. But don't forget that the creditor cannot seize (sometimes they can freeze) your bank account or garnish your wages until after they win a court case.

Learn how to hang up the phone if the person on the other end of the line is rude.

Disney hints:
http://members.aol.com/ajaynejr/disney.htm

"The creditor has to prove all three, the I, the O, and the U."

 

[CheapMom]

Do not accept forgiveness for a debt you dispute. Continue to dispute it.
(1) That is an admission that the debt is valid which you don't want to do.

This is excellent advice! There was an invalid charge (finance charge or late fee I think) on a CC of mine and after going back and forth- back and forth with customer service, I finally saw the charge dissapeared from my statement. Hooray- I thought and then forgot about it. Two years later- while applying for a loan- that came up as a charge off or something like that-it damaged my credit.

 

[minnie1928]

I just wanted to add a little note to this that they probably did not tell you (they might have- but just in case) Your mom will get a 1099 form for tax purposes for the remainder of the debt $537 as miscellaneous income. They consider the part of the debt that isn't paid back as money that is basically put into your pocket. Just wanted to let you know before it comes as a surprise in January after the taxes have been filed. HTH Sandy

I kind of figured this would happen, I work at a bank and I kind of remembered my employer sending a few of these out over the years.

The other advice about not paying a debt you dispute, and bankruptcy items are great advice. However mom wasn't disputing the charges. She knows the account they were referencing and the balance sounded legitimate. Mom and Dad declared bankruptcy several years ago and mom said that she would do ANYTHING to avoid doing it again. She said that it simply was not an option in her mind. Also, I did not send the check until I received a faxed letter from the attorney outlining what we were to do and more importantly what they would do upon receipt of the check. I reviewed the letter and it was everything I was looking for. Someone earlier had posted some links to various sites that dealt with this type of thing and I was able to determine what key points I needed to see in the letter prior to making payment.

I figured that this eliminated one more thing from hanging over her head. Everyone else has agreed to work with Consumer Credit Counseling Services on her balances, so she should be free and clear in under 3 years. I'm planning on paying her bills in a timely manner from here on out and saving a little money from each check. She opened an ING account and we squirrel away money each pay, some for quarterly bills and a little for savings. I hope that things will start looking up soon!

Thanks again for everyone's advice! It's been great!!!!