There is a new thing going around where collection agencies are buying debts not collected by the original agency. where is this generated from, how are they doing it, and do i have an obligation to pay although they are not a party to the original debt?
2006-08-25 06:26:07 · 10 answers · asked by peacheswrites 2 in Business & Finance ➔ Credit
its legal as the contract is in default the parties have broken faith and now the debt is subject to any collection methoed available under the law but charge cards can sell debts also and outside the home state that way the judgements can be gotten against you where you cant fight them and garnisnments and liens also so thats nasty
2006-08-25 06:33:15 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Simply put, most credit and loan agreements contain a clause which states that the lender you're doing business with retains the right to sell your outstanding debt obligation to another, and that by your accepting the loan (or using the credit card) you're agreeing to this.
Most credit providers, especially if they're not getting paid by the person they've loaned funds to, will agree to sell that debt burden at a fraction of the actual amount owed, and then it's up to the new "owner" of the debt to try and collect.
Sadly, this is entirely legal. On a more positive note, there are all sorts of regulations which apply to debt collection - whether it's by the original lender or any proxy that may be attempting to collect that debt. If you're being contacted too frequently by phone, send a letter advising that they are to contact you in writing exclusively. It's the easiest way to stop the phone calls.
2006-08-25 13:35:50 · answer #2 · answered by pblcbox 4 · 0⤊ 0⤋
The original debt has a provision which allows the creditor to sell the debt. This is not new and you still owe the debt. Stop acting like you're the one who's being wronged here. Whoever you originally owed the money to had to take a loss when they sold the debt. Pay up. You're just making things more expensive for everyone else.
2006-08-25 13:34:31 · answer #3 · answered by Oh Boy! 5 · 0⤊ 0⤋
Yes, you have an obligation to pay your debt. Collection agencies buy your debt fro mother companies for pennies on the dollar and then attempt to collect from you the amount owed. You are still responsible for paying this debt off, though you can usually negotiate with them and get the amount cut in half and place you on a payment plan.
At least it's not like it was in America's past where they would put you inprison for not paying your debt ...
2006-08-25 13:33:44 · answer #4 · answered by londonhawk 4 · 0⤊ 0⤋
It is completely legal to sell a debt to another agency, as long as they tell you they are doing so.
In many cases, your contract with the original lender says they have the right to do this. But even if it doesnt, they dont need it in the contract to do it. A debt is considered an asset by the person or agency it is owed to, and as such they have the right to sell it off if they see fit.
2006-08-25 13:32:05 · answer #5 · answered by Kutekymmee 6 · 1⤊ 0⤋
It is legal and done daily.
The agency buys your debt at pennies 3 - 15 on the dollar. When they do they can start reporting it fresh. Best deal - turn TV off , get 2 more jobs, save the money up. Offer in writing a deal for 25cents/dollar, get offer confirmed in writing before paying - to 'settle in full'.
visit www.daveramsey.com so you don't get bent over again.
2006-08-29 22:56:08 · answer #6 · answered by Anonymous · 0⤊ 0⤋
It's part of business...a debt is a commodity that is traded in the open market. Just like the servicing of mortgages...
Business 101.
This is not a new thing...it's just becoming a huge money-maker so a lot more companies are getting into it.
2006-08-25 13:46:33 · answer #7 · answered by KL 5 · 0⤊ 0⤋
It's legal.
You see this a lot of older debts, so find out when your delinquency date was, and check the state Statute of Limitations. It may be too old for them to legally collect.
Other then that, just send them a cease and desist letter and tell them to go away, or sue you if they think they have a case.
2006-08-25 13:38:06 · answer #8 · answered by Anonymous · 0⤊ 0⤋
If they start harrassing you, don't pay them a thing. If they don't harrass you, jusrt offer them 50 cents on the dollar, since they bought the debt for less than that. And next time, pay the company what you owe them, on time.
2006-08-25 13:32:45 · answer #9 · answered by Anonymous · 0⤊ 0⤋
I totally agree. I had this happen about a yr. ago with a debt that was 7 yrs. old!
2006-08-25 13:32:02 · answer #10 · answered by Mom of 3 2 · 0⤊ 0⤋