a collection agency is sueing me for an account i had with a credit card company. The credit card company charged off the debt. Is this legal? can this be done?
2006-08-04 05:07:20 · 11 answers · asked by heatedinny 2 in Business & Finance ➔ Credit
You betcha! Your debt now belongs to them, and they will hound you until you pay it off. That's how they make thier money. Best to pay it off fast as you can and be done with them.
2006-08-04 05:11:29 · answer #1 · answered by ? 6 · 0⤊ 0⤋
If the collection agency purchases the account they replace the credit card company. They own the debt. The agency is now the creditor.
Since purchasing a debt costs a small fraction of the balance owed, the agency or purchaser can afford to do more to collect the money.
Some purchasers of debt pay a premium for suit worthy accounts. These will file judgments quicker than a company that buys less suit worthy accounts. For example, an account where a suit can be filed in New Jersey may be better than one which needs to filed in Texas. The State laws and practices may make one State easier to collect by securing a judgment.
Some collection agencies have found buying the debt makes filing suits and filing judgments more profitable.
Also a collection agency that does not own the debt may forward accounts to an attorney on behalf of the credit card company. This is done when they determine it is suit worthy and attempts to make arrangement with the debtor have failed.
Law suits to recover a debt is less costly to a company that has purchased the debt for pennies on the dollar.
I would consult with an attorney and just because they can sue does not mean they will.
2006-08-04 06:35:34 · answer #2 · answered by donsabe 3 · 0⤊ 0⤋
Thats how it works. Credit card companies will try on average for 3-4 months to collect a debt and after that will sell your debt for pennies on the dollar to a collection agency for further collection. The collection agency will inturn contine the collection process with you most of the time with out further interest but maybe a small fee.
2006-08-09 08:55:25 · answer #3 · answered by Paul M 2 · 0⤊ 0⤋
Credit Card companies charge off accounts that they find uncollectable to one its own uncollectable debt accounts. (Which increases the rates of using credit for its other card holders) But they do however, submit that information to credit agencies, who try to collect the debt from the consumer.
So in reality you still owe the debt.................I suggest you pay it off, when you do so, don't pay the debt collector but the credit card agency directly if the agency is requesting payment in full. Most credit collection agencies want the payment in full, while you can make payment arrangements with some, you can send the credit agency what you want, they wont send it back.
2006-08-04 05:15:22 · answer #4 · answered by Monie D 3 · 0⤊ 0⤋
They can't file a judgment, but they can file a suit against you in hopes of getting a judgment. But, what they really are trying to get you to do is make a payment. This reactivates the debt and makes it legally collectable. Don't do it. These sleazy collection companies purchase the charged off accounts for pennies. If they can get you to pay even $10.00 they have made 1000% and can now really go after you. Be careful!
2006-08-04 09:19:52 · answer #5 · answered by working mom of 3 4 · 0⤊ 0⤋
Depending on that statue of limitations, you may not be responsble for the debt.
You can find out the statue of limitations for your state by going to bankrate.com.
For example, if you get a letter from a collection agency and live in Pennsylvania, and if the debt is over 4 years old they cannot put a judgement against you. However, you need to respond to the letter within 30 days to dispute the debt. Morally you should pay it but legally, you wouldn't have too.
If the above is the case, do NOT talk to anyone at the collection agency. You need to send them a letter via certified mail and keep a copy of the letter for yourself. Here's a link to one that you can change to suit your circumstances:
http://whychat.5u.com/ltrcaval.html
Good luck!
2006-08-04 06:31:32 · answer #6 · answered by pcgirl2006 4 · 0⤊ 0⤋
Sure. You owe the credit card company and they sold the debt to a collection agent. The contract you signed with the credit card company expressly allowed this.
You no longer owe the debt to the credit card company (although the damage their postings have done to your credit are here to stay). You now owe the collection agency. If they aren't able to collect they'll sell it to someone else who will try again.
2006-08-04 05:18:08 · answer #7 · answered by Oh Boy! 5 · 0⤊ 0⤋
Yes, it is legal. A charge off is just a way for that credit card company to "close out" their finance books.
However, they are out that amount of money.
Therefore, they are still pursuing you for the money. It's all legal. You spent it, you borrowed it, and now they want it back.
2006-08-04 05:11:47 · answer #8 · answered by Scott D 5 · 0⤊ 0⤋
It's my understanding that 'charging-off' a debt wipes the slate clean. They 'sold' your account's unpaid balance to the collection agency. You're scrood. Sorry.
2006-08-11 05:56:45 · answer #9 · answered by Anonymous · 0⤊ 0⤋
It's VERY legal. Your debt now belongs to the collection agency and they can persue it any way they want. Pay what you owe!
2006-08-04 05:12:49 · answer #10 · answered by Anonymous · 0⤊ 0⤋
I hate credit card companies. I think they are all on a mission to see whose credit they can ruin. Maybe they shouldn't send out letters BEGGING people to accept their cards---people who hardly have any income! They're asking to be ripped off. But they can and will ruin your credit if you don't try to work with them. My advice--cut up any credit cards you have and don't let them make another penny off of you!
2006-08-12 03:54:38 · answer #11 · answered by Jenintn 5 · 0⤊ 0⤋