Archive for Category 'collection agencies', page 2

Question: How do I find out who’s got the contract to collect on an old VISA card debt that went to collections a while ago? I’m trying to clear up my credit situation in preparation to buy a house in the next few years, and I defaulted on this VISA, but no longer have the card, account number or anything like that. I now have the means to pay this bill off, but because I moved around a lot while I was a student, I have lost track of the collection agency.

Answer: There are two options.  First, you could phone the bank where you had the credit card.  They should be able to advise you on how to make payments.

Your other option would be to get a copy of your credit report from Equifax; it will list your debts, with contact phone numbers to contact the creditor.

Question: Ten years ago I had a catastrophic accident and was not able to pay my credit card debt I was in hospital for a long time then went through psychiatric problems. Now a collection agency has contacted me and says I owe over $17, 000. I never owed more than $5,000 at the time. I can’t pay this. What now?

Answer:  You have three choices.

First, you could simply advise the collection agency that you cannot pay.  Since the debt is over 10 years old, it is unlikely that they will pursue you in court.

Second, if they do take you to court, you could hire a collections lawyer to represent you.  He will advise them that the Statute of Limitations has elapsed on your debt (depending on where you live).  That does not eliminate the debt, but it does prevent them from taking further action against you.

Finally, you could simply declare personal bankruptcy to discharge your debts.  However, there is a cost to bankruptcy, so you would need to discuss this first with a bankruptcy trustee to determine if this is the correct option for you.

Question: I paid off a credit card in 2000 after it had been deactivated. A couple of months ago, I started receiving calls from a collection agency about that card. I requested the provide me with information about the account and received nothing. They are now threatening me with small claims court. I have moved several times over the last 8 years and cannot find proof of paying the debt. Is there not a statute of limitations on this sort of stuff?

I live in Nova Scotia, Canada

Answer:  In most provinces, including Nova Scotia, the statute of limitations on debts is six years.  This does not mean that you do not owe the debt.  Debts never go away.  However, if the creditor was to take you to court and sue you, your defense could be that the Statute of Limitations has expired, and therefore they would be unable to obtain a judgment against you, making it very difficult for them to ever collect.

Please note that you are asking a legal question, and with all legal questions it is best to consult a lawyer for specific advice in your situation.  One lawyer who specializes in both Canadian and American collection law is Mark Silverthorn, who can be reached through the Mark Silverthorn website.

Question: I was recently discharged from a bankruptcy in Ontario. All debts that were included were discharged – none of them were opposed. Now I’m starting to get companies contacting me to collect on these debts! I don’t want new collection efforts reported on my credit file and I certainly don’t want to pay for debts that were discharged in my bankruptcy.

One debt has gone from the original company to a collection agency in Quebec. The debt was not with any collection agency at the time of filing for bankruptcy. I called the collection agency and they apologized for the error and said they’d take care of it. I gave them the contact info for my trustee and the estate number. A month later, I called back and it’s like that conversation never took place. They said they’re still waiting on me to send them a copy of my discharge certificate! That was not at all what was agreed upon during the phone call a month before.

Unfortunately, my certificate of discharge seems to have been lost in the mail and a “replacement” will cost me $100. Personally, I think something as important as that, especially with such an expensive replacement fee, should be sent by courier or registered mail so that it’s signed for.

Another company originally sent me a letter last year, saying that they have been notified of my filing for bankruptcy and will write off my debt. Now that I’ve been discharged, they’ve changed their mind and decided that they want the money after all!

What’s all this about? Is it common for companies to try and see if they can collect from unsuspecting and recently discharged people? These are large companies, not some mom and pop shops or anything. I’m also worried that they may report to the credit bureau and it will be a nightmare to get that removed (short of paying for debts that were discharged in the bankruptcy). What should I do, and why is this happening?

Answer: It is very common for a debt to get bounced from one collection agency to another.   For example, when you went bankrupt your debt was with the XYZ Bank, who were notified of your bankruptcy, and they have not pursued you since.  However, the bank obviously did not delete your name from their list of accounts, and at some point your account got transferred to a collection agency.  Collection agencies are also bad at keeping track of things, so even though you have notified them, they have not yet updated their records.

You have three options:

First, you should contact your trustee, again, and ask them to send proof of your bankruptcy directly to the collection agency that is calling you.  Even though you are now discharged, your trustee is still obligated to send out these notices.  Every time you get a phone call, get the contact name of the person contacting you, and contact your trustee and ask them to send out the information.

While you are talking to your trustee, ask them to send another copy of your discharge certificate.  You don’t need an original; a photocopy will do, since that’s all you would send to anyone anyway.  Make a few copies for yourself so you have them.  It’s not necessary, however, for you to be sending them out to creditors; that’s your trustee’s job.

Second, you should get a copy of your credit report and contact the credit bureau directly and ask that they remove the incorrect information.  They will have a copy of your discharge certificate on file (if they don’t, you or your trustee can provide them with that information).

Finally, if the collection agent continues to call to collect a debt that was discharged in your bankruptcy, you can contact the Ministry of Consumer Affairs in whatever province the collection agency is in, and report them; the Ministry can revoke their collection agency license, which generally is enough to get them to stop calling.

Question: Hi, I have been recently contacted by a collection agency for a credit card that can not be paid.

I first tried to sellte this with the bank, but things didnt work out, however the bank was quite understanding and let me know that on the 10th of April, a Collection Agency will be calling. And so they did. at first dealing with them was very professional, I have been honest and truthfull of what monies I have at my disposal. I have been trying to make a settlement with the collection agency, however the monies they want I just dont have, my offer is a little more than half, but they want 80%.

There solution is for me to go get yet another loan/credit card (high interest no doubt) and pay up the additional 30%. (and I doubt that I will get approaved anyways)

They want me to sell of all of my registered and non registered investments (which I fully support), this is where the 50% of the monies oweing will be coming from. They initially agreed that any tax monies held back will be taken off the amount oweing. But instead of taking it from the 80%, which I was lead to believe, they now say that deal is off the table.

Today things took a sour turn. I was trying to negoiate a deal, my deal was to remove all of my rrsp’s, and my investmets. That would amount to about 67% of the monies they are demanding (80% of the total outstanding) For some reason they think I have not been honest with them, (which I have) and they want the 80% by the 22nd “or else”. I have asked them what they plan on doing? All I know is I will be served some legal documents tomorrow. Beats me what it is, no one would tell me. I asked several times.

What can I do? I have offered up everything I possibily can, including some of the Harper bucks (300 a month for the kids). They are backing me in to a wall and they made it very clear that they want the full 80% or legal action will be taken against me on the 22nd of April.

What can they do? I figure they can take me to court, and get a judgement against me. My house has no value, it is fully mortgaged, I doubt a judge will order the sale of my home that will net the collection agency maybe 1000.00 bucks, plus putting a family of 5 out on the street. I guess what I’m getting at is I just dont see how the courts are going to get more than the 50% out of me either. Maybe force me to sell a couple of kids?

I am so confused, fustrated, and feel sick to my stomach being called a lier today over and over again on the phone.

Please help…. I know that they will be calling again in the morning…

Helpless in Nova Scotia

Answer: The most obvious solution to your problem would be to file a consumer proposal.  Working through a licensed trustee, you would offer all of your creditors a “lump sum” proposal.  The lump sum would come from your RRSPs.  If they accept, you would cash in your RRSPs, pay the taxes owing, and give them the rest.  Since you have no other assets, this would probably be acceptable to them.

You are currently dealing with a collection agency; once the proposal is filed the deal goes back to the original bank, and in most cases they will accept this arrangement.  Don’t delay; reduce your stress level by contacting a licensed trustee today.

Question: I have a credit line of $18,000. and one $10,000. also a personal loan that is now $7,500. and 2 credit cards totalling $14,000.  All this together is around more that $50,000.  So far I have always paid my monthly dues and never been late, however i can’t anymore

What can happens if i just stop paying all of them?

And can my creditors claim my childrens federal/provincial benefits?

Answer: No, your creditors cannot take money from someone else for your debts, including from your children.

If you stop paying your creditors, they can call you and send you letters, and eventually take you to court and sue you and attempt to garnishee your wages.  Once a wage garnishment starts, your options are to let the garnishment continue until it is paid, or file a consumer proposal or go bankrupt to stop the garnishment.

Question: I was contacted by a collection agency to collect a debt that I was totally unaware of and may not be liable for.
I told them I would not discuss any payment arrangements until they could prove that I actually owed any money.
In their preparations of collecting information about the debt, they ran a credit check on my credit report. Are they authorized to do that without my permission?

Answer: No-one is allowed to run a credit check on you without your permission.  However, when you originally applied for the credit, you probably signed a form giving them permission to check your credit.  Of course, if you didn’t apply for credit, then they should not have run a credit report on you. 

Question: I have a bank visa and line of credit that have gone to collections. I make payments every month but due to a change in life circumstances I can’t afford to make the kind of payment that they want. They are now threatening to take me to court and garnishe my wages are they able to that?

Answer: Yes, if you are behind on payments than can take you to court.  Whether or not they are able to garnishee your wages will be up to the judge.

Obviously this is a very stressful situation for you, so we recommend that you talk to a credit counsellor or bankruptcy trustee to find out your options, as there are many possible solutions for dealing with collection agents.

Question: When i became ill and could no longer return to work I went on CPP disability. I called each of my creditors and explained the situation. All (4 in total) but one decided to settle for a lump sum for 40% of the balance owing. It has been 9 months now and it is now in the hands of a collection agency. They are demanding the full amount plus the interest it has accumulated. They are threatening to take legal action, place a lien on my house and have the sheriff sell it. They said the papers were going to be sent out this week. I have a first and second mortgage and a few hundred in back taxes owing. After that is paid there still isn’t enough to pay the total amount to the creditor. I even offered 50% and it was refused. I will have to borrow that from a parent. What should I do, take my chances in court?  Will the judge do what they are threatening and sell the home of a disabled person and leave me homeless. Can I still deal with the original credit card company or is it too late? Someone told me to talk to the Ombudsman of the company. What is an Ombudsman? I don’t know what to do.

Answer: You should immediately contact a credit counsellor or a trustee in bankruptcy to review your situation.  There are a number of different options.

First, if your house has no equity (meaning that the value of the house is about the same as the amount owing for mortgages and property taxes) then there is no point in the court ordering your house to be sold, because all of the money would go to the mortgage holders, and the creditor would get nothing.  Therefore, it is unlikely that the court would do that.

Typically if you owe money a creditor can sue you can get a judgement, and the judgement is enforced by either putting a lien on your house (unlikely as discussed above) or garnisheeing your wages (very common, but impossible in your case because you don’t have wages, you get a pension).  It is therefore possible that, other than yelling at you over the phone, there is little that the creditor can do.

Again, I think your best option is to contact a credit counsellor or a trustee in bankruptcy to review your situation.

Question: A collection agency  purchased my debt from the bank. This debt is from 1999. I had a Line of Credit and 2 credit cards with them. I fell into bad times and when I tried to get it consolidated to a straight loan with the bank they said no and immediately started to remove my paycheque from my account as soon as my work deposited it. They did this twice until I had my work issue my pay as a cheque. Suffice it to say at the time I did not have a support network. No family or close friends that could help. I therefore just disappeared off the map so to speak. I slowly paid off my smaller debts. In addition at that time if your credit rating was bad a Bank could decline opening a bank account. I spent from 1999 until about 2006 without a bank account. Anyway, my question is what normally does a collection agency pay on the dollar to the bank to buy my debt. I have been told they pay 10 cents on the dollar. If that is the case what are my options when negotiating with this agency?

Thanks,

Hector

Answer: It would be highly unusual for a collection agency to purchase your debt from the bank.   Collection agencies collect debts on behalf of banks, but they don’t use their own money to purchase the debt.  If they manage to collect something, they get a percentage of the amount collected.

You have a number of options for dealing with the collection agency.

First, you can attempt to negotiate payment arrangements.  Since the debt dates back to 1999, the collection agency may be willing to accept payments over a period of time.

Second, you could offer a lump sum settlement.  If you owe $5,000, you could offer to give the collection agency $2,500 in full satisfaction of the debt.  They will often accept this type of settlement.  However, to be able to do this you would need to have $2,500 in cash, which may be difficult to borrow if your credit rating is poor.

Finally, if you cannot reach a settlement with the collection agency yourself, you could get help from other professionals.  A Debt Management Plan filed by a non-profit credit counsellor could be used, or you could file a consumer proposal or personal bankruptcy to deal with your debt.