I have an unpaid bill of about $5000 from a credit card it which was sent to a collection agency. After the usual harrasment, I told the CA that I simply don’t have any money to pay them right now. ( I really don’t) My state does not allow garnishments for personal debt and I have less assets than the state allows in exemptions. So I told them to stop calling me about a month ago. I got one final notice offering to settle the debt for less (which I ignored) This is one of the major CAs. Today I got a collection notice from some other CA I have never heard of.
What I am wondering is, was the debt sold because the CA does not think they can collect it? Or is it because the new collection agency will be able to contact me by phone or something since I have not dealt with them before?
Your subject line does not sound like the same question you ask at the end of your post. When a CA sells debt, they (bear with me if this is obvious) sell it for less than the face value, because that reflects their estimate of the probability of collecting. This may be based on the amount of effort they may be willing to put into it.
It’s not whether they think they *can * collect, it’s whether they think it’s worth the effort.
Another agency may specialize in hard-to-collect debt and would be willing to buy low and try harder to collect.
Actually come to think of it, I don’t know that they SOLD it. Maybe it was assigned instead of sold, by the original creditor
Financial institutions sell so many things from mortgages to student loans to debts it will make your head swim. They are actually doing risky business between each other and it doesn’t have anything to do with you personally. The original lender got tired of you not paying. They just wanted to be done with you and lots of other people in the same package deal so they bundled up your debts, took the hits, adjusted their accounting accordingly and sold all of them to a debt collection agency for some fraction of the real debts. The collection agency looked at the package of debts and bought it because they thought that they could collect on them for more than they paid so they get the bundle and started calling and mailing the people that owe the debts. At some point, they will get tired of trying to collect from however is left and will sell it to another agency for pennies on the dollar. The new agency believes that they can collect and make money on some of them so they give it a try and the cycle continues.
What crazy-ass state do you live in? What do they allow garnishments for? Child support, back taxes only? What?
"Wage garnishments are legal in North Carolina if a North Carolina court or federal court issues a court ordered garnishment for specific items such as, but not limited to, taxes, student loans, child and spouse support, and payment of ambulance services in certain North Carolina counties. The North Carolina Wage and Hour Act (WHA) recognizes legal garnishment court orders in N.C.G.S. 95-25.8(1): “An employer may withhold or divert any portion of an employee’s wages when: (1) The employer is required or empowered to do so by State or federal law, …”
Generally, wage garnishments by banks and loan institutes for car loans, credit card debt, and other personal debt items are not legal in North Carolina."
[URL=http://www.nclabor.com/wh/fact%20sheets/garnishments.htm]
And according to Wikipedia:
"At present four U.S. states — North Carolina, Pennsylvania, South Carolina and Texas — do not allow wage garnishment at all except for debts related to taxes, child support, federally guaranteed student loans, and court-ordered fines or restitution for a crime the debtor committed "
That doesn’t seem unreasonable for consumer debt. There are plenty of people not paying what they legitimately owe but I have been the target of collection agencies twice for things that I absolutely did not and it took a long while to get it taken care of. Collection agencies have no interest whatsoever in helping you get false claims against you resolved. It is quite to the contrary in fact. They bought the debt and want to collect on it. Garnishments without a judicial hearing or trial would pick up many, many people that didn’t don’t really owe anything and make the whole process a nightmare. Businesses make mistakes. In fact, I have been getting a 3 year old bill from a local septic tank company for $1000 recently. They only gave us an estimate and never actually did any work and I have called twice about it to no avail. I shudder to think what would happen if it could be turned over to a collection agency who initiated garnishments.
Could be Texas. Or Florida, if you are head of household.
And as I understand it, Florida has an unlimited exemption for your house. (I think thats why OJ lives there) Florida seems like a state that respects property laws.
Well, that’s amazing. Ignorance (mine) fought!
What it means to me is that every couple of years I get a nasty phone call from a different collection agency despite numerous management notes stating that FordPrefect from town Greenville* is not the FordPrefect from town Gorton*.
Maybe the debt has finally been sold so cheap as to not be worth it, cause it has been about three years since the last call. That debt does not appear on my credit report so no damage done to me.
- Town names changed to prevent the fuckhead FordPrefect from using my real town name in the future.
Sometimes you can solve a debt problem by offering them cents on the dollar.
Try $500 for example. But don’t negotiate up, only down. If they counter with $4500, you counter with $400. At this point you have nothing to lose.
Collection agencies get paid no matter what the amount, but only if you pay something.
Just be sure you get paperwork that says: 1) the debt is fully discharged, and 2) that they will confirm that to the 3 major credit bureaus.