You might be wondering who are these companies that are sending collection notices on my credit card debt? I never borrowed any money from any of them. It’s a good question for a confusing situation.
Credit card companies routinely sell (or assign) debts owed to them by their customers. Unfortunately, this is entirely legal. Credit card debts can be assigned or sold to anyone. This often leads to confusion and makes it difficult for you to determine who exactly you owe. Why do credit card companies sell your debt? If you owe the money, why don’t they try to collect it themselves?
Credit card companies will, in fact, often sell your debts for a small percentage of what is actually owed. They will then write off this loss for tax purposes. Some may conclude that the debt is unrecoverable. Or they may be simply looking to balance their books. Regardless, it leaves you now owing a new, different company. This often results in problems because these companies specialize solely in collections, harassment, and lawsuits., and they are able to go after the entire balance owed on the loan. This is why you may have originally owed Capital One or Discover, but are now being sued by Midland Funding or Portfolio Recovery Associates.
So, what can be done about these collections? The good news is these debts are still eligible to be discharged through bankruptcy. Nothing about the transfer or assignment makes them immune to a bankruptcy filing. Even if they file the lawsuit against you, that too can be discharged through bankruptcy. If you don’t wish to file bankruptcy, these debts can still be negotiated on, possibly for less than the full amount. Keep in mind, these companies have already purchased the debts for less than the full amount and therefore may be motivated to take less than what the original creditor previously wanted.
These collection agencies may make it tricky to figure out who you owe and how much, but they still can be dealt with. Call us at 412-414-9366 if you are being inundated with collection notices. I am an experienced bankruptcy attorney who would be happy to discuss your situation and see if there is an option for dealing with this problem. There almost always is, so don’t despair!