I owed bank money on credit card. Account was closed and placed into collections couple of years ago.?

Question

Recently I opened a checking account with that bank and little later I got a statement regarding credit card balance owed (amount close to what I originally owed - about 2500) with minimum payment due. Basically, it seems very legitimate letter and payments are affordable etc.

At the same time I started getting calls from a collection agency regarding the same exact credit card debt, who said they bought this debt last year and tried to contact me. At first the guy mentioned amount twice as much as I originally owed (about 5000). Then I mentioned letter from bank and he offered to settle for the same 2500. I insisted, and he will send me a letter with his offer. (which is paying over 6 mo period).

My concern is - whom should I pay? I prefer to pay bank However, will I have a problem with collection agency then? How is it possible that I have two creditors now?

Basically, what should I do? I prefer to pay bank, but how can I get rid of the agency

Answer 1

If your bank sold the debt to a collection agency, they no longer have rights to it I would assume. However, the bank may have contracted the credit agency to collect the debt on their behalf, in which case, the bank still is owed the money. I agree with the previous posting, you should talk to someone at the bank and see if the debt was indeed sold or if the collection agency is just collecting on the bank's behalf. And, yes, creditors DO lie. Most disregard the fair collections practices and tell you lies and half-truths to intimidate you into paying. If you find out that the bank still owns the debt, pay them and let the bank know that if their collection agency continues to call you, you will file a lawsuit. Document every time the bank or the collection agency contacts you, get the name of the person you talk to, write the date and time, etc. Keep a paper trail, and you could even get a small tape recorder and record the conversations but ONLY if you let the callers know that they're being taped. If you tell them that, they'll probably just hang up anyways.
Debt sucks! Good luck!

Answer 2

You dont have 2 creditors. The bank has either sold off the debt to a collection agency, and if that's the case you can only work with the agency, the bank has no legal rights to work anything out with you or offer any arrangements. If the bank has assigned an agency to collect on their behalf, contingency agency, then it is possible to still work with the bank directly, but it's the banks call. SOL vary in each state and range from 4-15 years. A collection agency can continue to collect the debt well past the SOL. SOL just means the time in which the creditor/collection agency has to sue you.

Answer 3

Depending on the state you live in will impact how you should proceed.

There is a statute of limitations (SOL) on how much time the Credit Card company has to collect this debt, same for the collection agency. The clock starts from the default. In many states the Statute of Limitations time is 3 or 4 years on Credit Card debt. If this debt is in that time range since the default date (not the closing date) then you can tell the bank and the collection company to take a hike.

To figure the date of default you need to know when the account became 30 days past due. If the SOL time has tolled from that date then they would have a difficult time getting a judgement against you in court.

If this is the case, then the debt is not valid and if a collection agency reports inaccurate information or pursues collection on an invalid debt; they can be sued for violations of the Fair Debt Collection Practices Act.

Warning: You need to know the SOL time for open accounts in your state. 3 or 4 years may not apply to your state.

Answer 4

Yes they do have the legal right to take the money from your account if you have your credit card with the same bank. Its probably to late now but you should ensure that your main bank account is always different from your credit card acocunt. Its easy to do. Best suggestion now is that you urgently need to make an apointment with the bank and go and discuss your situation with them. THey do listen but you do need to disucss this before it goes any further. Togther you need to come up with a solution. If you feel you are heading into a endless money pit then you can speak to the Citisen Advice as their service is free and they will give good advice and contacts. IF you feel you need a way to resolve the situtaion then taking to a Debt Management compnay is a good option but be careful as some ar enot as good as others. Again the Citizen Advice will assist you. Best thing though is to see your bank manager first thing. Make sure you state that in removing the money from your account automatically they have caused you a finicial difficult due tolosing your job and they put at risk of not paying rent. This inturn has caused you great stress (always play the stress card) The bank will most likely come up with a reduced payment plan but make sure you can agree zero interest as this is what a debt management company will do. Of course you also need to get a job. Not sure what your previous was or skill but supermarkets always want people for part time work, fast food chains etc, its a quick way to start earning again. Interetsing one could be to look at being amystery shopper as you get paid for this. Do a search on Google mystery shopper sign up.

Answer 5

If the bank sent you a statement, they still own that account. Contact the bank and verify that. Ask the bank to call off the collection agency.

Answer 6

If you can get the bank to accept it, they'll still have to split with the agency if they sold the debt. You should see who will give you the best terms. If the bank does, then the hell with the agency. If the agency gives you a better deal, pay them. You can try negotiating with both of them and see who gives the best plan.

Answer 7

On other piece of advice: don't deal with either the bank or collection agency via phone. Tell them both everything has to be in writing so you have a document trail.

Answer 8

You need to send both of these agencies a request for a validation of the debt (you can find samples all over the internet). I think the collection agency sounds bogus.

Answer 9

Collection agents lie- call your bank up and ask them.