Debt Validation, Where I'm at in the Process

Back in March I mentioned my "proud moment" of being proactive in dealing with some of my zombie debt issues. In that post I mentioned the following article Make Collectors Prove You Owe being used as my starting point. Below is a synopsis of that article and where I stand in the process.

Under the Fair Debt Collection Practices Act, a federal law regulating debt collectors, you can request the debt collector to send proof of the debt.

How it Should Happen

1] Within five days of its first communication to you, the debt collector is responsible for sending you a debt validation notice. This notice should be in writing letter letting you know you have the right to dispute the validity of the debt within 30 days.

• I did not have an initial communication from this company just received the mailing

2] You must dispute the debt in writing within 30 days, or the debt collector has the right to assume the debt is valid. During the 30 day period, the collector can continue attempts to collect the debt from you until it receives your validation request.

3] Submit a Validation Request--your request for debt validation must be submitted in writing and should be sent certified mail return receipt requested. You can dispute: entire debt, part of the debt, or request the name of the original creditor. After receiving your dispute, the debt collector cannot contact you until it has provided you with the requested information.

Sent my validation request on 3/4/09...received by CMS on 3/6/09...on 3/11/09 I received a letter from CMS stating the following:

...Our office has requested this information from our client Resurgent Capital Service.Once we have received the information from Resurgent Capital Services, it will be forwarded to you...

By sending certified RRR you have proof of the letter’s mailing and receipt by the debt collector. If you do file a lawsuit against the debt collector, the certified RRR will help your case.

4] The collection agency must send you proof that it owns or has been assigned the debt by the original creditor. Verification that you owe the debt and the amount of the debt needs to include documentation from the original creditor (however, it is the debt collector who sends it to you). It is not enough for the collection agency to simply send you a printout of the amount owed.

• As of today 4/6/09 I have received nothing

5] If the debt collector does not verify the debt within 30 days, it is not allowed to continue collecting the debt from you nor can it list the debt on your credit report. If debt collector list the debt on your credit report, it can be disputed.

• The 30 days are up, so far nothing listed on my Experian report. I need to see if I should write a follow letter to CMS.

It will be interesting to see if this debt gets sold yet again. I also need to look into whether there is any legal means of preventing the constant selling of debts like this. I will be adding some information to help clarify some aspects of this post at a later time.

Statute of Limitation

I was able to find the actual Pennsylvania law(s) concerning STATUTE OF LIMITATION. With the help of numerous web sties I was directed to the on line source for the Unofficial Purdon's Pennsylvania Statutes from West.

This site provides free access to both the consolidated and unconsolidated Purdon’s Pennsylvania Statutes and Constitution, as compiled and maintained by the editorial staff of Thomson/West, and made available here in an unannotated version under agreement with the Pennsylvania Legislative Reference Bureau.

And here it is (underlining is mine, I also left out paragraphs for clarity sake as it written in legalese)

42 Pa. Cons. Stat. Ann. 5501 et seq. TITLE 42 Pa.C.S.A. JUDICIARY AND JUDICIAL PROCEDURE CHAPTER 55. LIMITATION OF TIME SUBCHAPTER A. GENERAL PROVISIONS

§ 5501. Scope of chapter

(a) General rule.--An action, proceeding or appeal must be commenced within the time specified in or pursuant to this chapter unless, in the case of a civil action or proceeding, a different time is provided by this title or another statute or a shorter time which is not manifestly unreasonable is prescribed by written agreement.

§ 5502. Method of computing periods of limitation generally

(a) General rule.--The time within which a matter must be commenced under this chapter shall be computed, except as otherwise provided by subsection (b) or by any other provision of this chapter, from the time the cause of action accrued, the criminal offense was committed or the right of appeal arose.

SUBCHAPTER B. CIVIL ACTIONS AND PROCEEDINGS

§ 5525. Four year limitation

(a) General rule. Except as provided for in subsection (b), the following actions and proceedings must be commenced within four years:
(7) An action upon a negotiable or nonnegotiable bond, note or other similar instrument in writing. Where such an instrument is payable upon demand, the time within which an action on it must be commenced shall be computed from the later of either demand or any payment of principal of or interest on the instrument.

So what does all this mean for me:

A SOL begins to run when a cause of action accrues; begins when I have done/did something contrary to the terms of my agreement--that somethings is failure to pay my bill. By not paying bill on time I have violated the terms and given creditor(s) a cause of action.

So now I wait to see what the collection agent has to say in response to my validation request. I also need to dig some more in regards to the credit reporting time limit as well as removal of items from my report.

More Debt Info

Today I was proud of myself. I began to be proactive in dealing with my debt, specifically my zombie debt(s) that I feel shouldn't be on my credit report(s). I am hoping that by dealing with the issues surrounding my credit report(s) I may be able to improve my credit score. I do realize that these debts need to be paid, and in time I hope they will be. My goal(s) at this point in time is/are to clean up my reports as much as possible and pay on more current debt with hopes of removing them from collections.

Currently, on my EXPERIAN report I have 14 items listed. Seven items are credit card related, with multiple listing (see prior post); 2 items are utilities; 2 items are medical; and 3 items are related to defaulted student loan.

My student loans are in repayment and with some luck will be removed in July; I believe they will then be noted in a positive manner. The medical bill that are in collections will be dealt with hopefully by July. I have some other ones that I am paying on to keep out of collections and they should be paid in full by then. As for the cardit cards, well,,,let's say I have much reading and research to to do as to how best to handle them. That brings me to my proud moment,,,

Last month (2/7/09) I received a letter/notice from CAPITAL MANAGEMENT SERVICES, LP (located in Buffalo, NY) concerning my alleged deliquent debt of $xxxx.xx. After doing some digging I discovered a few items of interest:

1. this letter was from what some would call a "scavenger" debt collector; it would mark the second time that a third party collector has contacted me concerning this particular debt
2. this debt's SOL has run out (still double checking this to be sure, I am getting conflicting information. Update: PA SOL is 4 yrs, I will be posting the information I found) and is now a TBD (see prior post)
3. this debt is also past the time limit of 7 yrs for credit reporting (again need to double check)--7 years is the amount of time credit bureaus can report delinquent account information on your credit report [Note to self: I need to determine if it is the credit reporting agency is who I need to contact to remove this item or the collection agency]
4. in order to begin to deal with this debt I needed to make the collection agency validate the debt; I am using this article ("Make Collectors Prove You Owe") as my starting point

So my "proud" moment came when I actually wrote and mailed the validation letter--GO ME!!

Stop Debt Collectors and Get Back on Your Financial Feet

A good overview of your rights when dealing with debt collectors--Stop Debt Collectors and Get Back on Your Financial Feet by John Ventura, Attorney.

Some key popints to consider:
The federal Fair Debt Collection Practices Act (FDCPA) sets very strict limits on what debt collectors can and cannot do. Those limits include when they can call you, what they can say and what they can do to collect a debt.

The FDCPA applies to outside debt collection agencies, but not to creditors collecting their own debts. However, your state may have a law that applies to in-house debt collectors. Call your state attorney general's office to find out.

What To Do If A Collector Violates The Law--If you believe that a debt collector has violated your rights, or you need advice about the best way to deal with a collector, contact a consumer attorney (visit www.naca.net for a referral). You should also register a complaint about the collector with the Federal Trade Commission.

Before Your Debt Goes to a Collector

Another Bankrate.com article Before Your Debt Goes to a Collector. Experts advise that you be proactive, not reactive.

"One missed payment or several missed payments has become a mountain of debt, and as far as the creditor is concerned you've broken an agreement to pay your obligation on time."

How to Settle with a Debt Collector

From Bankrate.com--How to Settle with a Debt Collector: First, realize that ignoring it won't make it go away!!

"That bill has been sitting at the bottom of your paperwork pile for a while. Despite your best effort, ignoring it hasn't made it disappear.
"Now you've acquired somebody who wants to be your new best friend-- a debt collector.
"You can't wait any longer to face it. In fact, many credit experts say too often consumers dodge the opportunity to resolve their money issues with the debt collector.
"If you know you lost your job and you don't have the money to pay your creditors, don't be reactive, be proactive," says Robin Holland, spokeswoman for Equifax, a credit reporting agency.
"Many people don't know what to do when it comes to working out a deal with a debt collector. The following questions could help:

• An account sent to collection can be deleted from your report.
• Paid-in-full accounts are better than settled ones.
• You can be sued after the statute of limitations ends.
• Credit card charge-offs can't be deleted from your credit report.
• If you have a debt in collections over $2,000, you won't be sued.

Debts in Collection

From Bankrate.com--Managing debts in collection: An excellent series of articles dealing with debt collection process. A good strating point!!

1. Dealing with old debt
"Be careful what you say if an old debt comes back from the grave. It could cost you."

2. Debt collectors calling? Know your rights
"Debt collectors have to mind their p's and q's; it's the law. You may owe, but you still have rights, so use them!"
"The Fair Debt Collection Practices Act was passed in 1977 to protect consumers from abusive debt collectors. Here's a closer look at the rules a third-party debt collector must follow when collecting a debt."

3. State statutes of limitations for old debts
"When dealing with an old debt, it's important to know your limits."
"Once a debt passes beyond the statute of limitation in your state, a debt collector no longer has the right to sue you for payment. You may still have a moral obligation to pay back an old, forgotten debt, but you can't be sued over it."

4. How to strike a deal with a debt collector
"Ready to pony up that money you owe? You could get a break if you play your cards right."
"Debt collector is calling and you finally have a little money to offer."
"Before you pay a cent, why not try negotiating a better deal? By offering a lump-sum payment, you could easily cut your debt in half."

5. Taken to court for credit card debt
"Dear Bankruptcy Adviser: I just received a summons to go to court on an old credit card bill asking for judgment. What does this mean?"
"...This is no time to fool around. At the point that the courts become involved it is a very serious matter."

6. Tools: Form letters
"The best way to communicate with collectors is in writing. These letters will get you started."
Responding to a debt collector
Writing a debt collector? Here's a form letter