little bro has had an outstanding auto loan (union acceptance corp)?

Question

there has been no correspondence from UAC for 8-10 years. He figured the balance of 2500 had been written off. A local car dealer, looking at his credit, told him that it appeared to be so. He has since obtained a mortgage without any mention of this debt. Now a collections agency has contacted him in regards to the balance. What should he do??

Answer 1

Generally, unsecured debt expires 3 to 6 years after the last missed payment or the consumer's last activity on the account. Written contracts such as car loans generally expire after 6 years. Judgments can last up to 20 years and can require the judgment be renewed at a certain point such as the 6-year point.
Therefore, lil bro needs to find out whether the collection agency has a judgement or not. Lil Bro needs to tell thecollection agency the following:
"I am unaware of the debt that you are speaking about. I need you to do the following: Send me a copy of any judgement you have in your possession, and to cease calling me. All corespondence henceforth with me must be in writing. Failure to do so, will result in my contactacting the Attorney General's office, and filing a formal complaint of harassment.
Thank you and goodbye".
If the collection agency has no judgement, then inform them any debt over 6 years old in your state has exceeded the statute of limitations, and they have no legal recourse to collect it, without a judgement within 6 years of the original debt.

Answer 2

1

Answer 3

He should take any correspondence from the collections agency to an attorney. He should make NO statement to the collections agency regarding willingness to pay, until an attorney has counseled him.

Sometimes companies buy this paper for pennies on the dollar, then intimidate people into paying up. Sometimes the intimidation is all they have going for them, because the debts are so old that a state statute of limitations may prevent collection.

It's a nice racket.

Answer 4

uac has been out of bussiness for awhile. However they have the right to sell thier accounts to collection agencies which is what happened. Check your state for the statute of limitations on debt. Normally it is 2-4 yrs from last payment. He can go to www.annualcreditreport.com and pull all 3 bureaus and dispute the information. If what you saying is true it should not be on any of his bureaus.

Answer 5

Here's what probably happened. The bad debt was indeed written off by UAC. They did this because it isn't worth $3-5000 of legal fees to collect a $2500 debt. However, it only means they wrote it off as bed debt (a business expense) on their books. The debt still exists. Your brother still owes the money until it is paid. If it was more than 7 years ago, the bad information fell off his credit report which is why he wasn't dinged during his recent mortgage application. BUT (here comes the fun part), there are some collection companies that purchase (at pennies on the dollar) lists of bad debts from banks and finance companies. These debt collectors now own the rights to collect the debt.

So now this new collection agency is going to make your brother's life miserable. They will call him and call him and threaten and call your Mom names . . . . They will probably not get off his back until it is paid . . . . and maybe not then.

So here's what he needs to do:

1. He needs to save up about $800.
2. He needs to call UAC and tell them that he has a long-standing debt with them and would like to offer them $800 as PAYMENT IN FULL (make sure you use that phrase) to settle the debt. As old as this debt is, they will be thrilled to get that amount.
3. Make sure to tell UAC that you need a letter in writing saying they will accept the $800 as PAYMENT IN FULL before you can send payment.
4. Under NO CIRCUMSTANCES should he: (a) give anyone electronic access to his checking account to settle this debt -- or they will clean him out! (b) send any money until he has a letter from UAC indicating acceptance of the payment as PAYMENT IN FULL (make sure those words are included).
5. When he gets that letter from UAC, send a certified check or bank money order (keep a copy) along with a photocopy of the letter from UAC to UAC.
6. Keep a copy of UAC's agreement letter and the money order in a safe or bank deposit box for the rest of his LIFE!
7. Every time he gets a call from a collection agency (which he will continue to get until he gets this mess cleaned up and which he will likely get 10 years from now after the mess is cleaned up), send them a copy of the letter and the bank money order showing that UAC accepted a $800 payment as PAYMENT IN FULL (I'm being repetitive hoping you will get the point that this is an important phrase to have in writing). Then tell them to cease and desist contacting you about this debt that was already paid.
8. Finally, go to a bookstore or www.daveramsey.com and get your brother the book "The Total Money Makeover" by Dave Ramsey. He can read it in 2-3 days and it will tell him exactly what to do in situations like this and how to avoid doing stupid stuff with money in the future. It is the best step-by-step how-to financial book out there for the not-so-financially-gifted that is on the market today. You should buy it for him as your contribution to keep him out of trouble (and keep him from crying to you) for the rest of his life.

Answer 6

Well, there are a couple of things. If he really, truly owes the money, he should pay it. However, what many people do with old debts like this is contact the credit bureaus and dispute it. He should pull a copy of his credit report from every bureau (TransUnion, Equifax, Experian) to see if it shows on each report. Some (I believe 2 of the 3) allow disputes online. The company has 30 days to respond to the credit bureau's inquiry. If they do not, I believe it has to be removed from the report.

Many of the 'credit clean up' companies you see advertised do exactly this. They dispute and dispute until someone messes up and doesn't reply on time.

I hope this helps.

Answer 7

They cannot collect. Before you do anything else, you need to figure out the credit report the dealer pulled and dispute with the credit reporting bureaus that the 7 year reporting period has expired.

Next, write a simple letter to the collection agency asking for VALIDATION (original copies of the debt, I bet they can't find them):

"According to my rights under the FCRA I dispute your claim and request validation. Please provide me with original copies of this debt, and prove to me that this debt is within the statute of limitations for this state. Also note the reporting period under the FCRA is 7 years from the date of 1st delinquency, and this time has expired. If you continue to try and collect this debt, I will notify the attorney general of these violations of my rights."

Answer 8

He should contact the attorney general and ask what the statute of limitations is for debt collection. He should also ask for proof of the debt from the people trying to collect it. By law, they have to provide that to you. It's probably some low life collection agency.

Answer 9

Loans are never completely written off. They're just bought by someone else who will try to collect. He has two choices, he can pay the debit or get a lawyer and try to get out of it.