Credit Card Collections

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!

Who Are These Collection Companies???

You might be finding yourself asking this question as you receive collection notices in the mail from unfamiliar companies. You know that you have credit card debt, but the companies that are collecting are entirely new. It might be a company like LVNV Funding, Midland Funding, or Portfolio Recovery Associates. Who are these companies?

Most likely, if you don’t recognize the company that is collecting from you, they probably purchased your debt from the original creditor. This is called an assignment. Unfortunately, this is generally legal. Many people who call me have hopes that these collectors can be easily dismissed. Usually they cannot. However, there are effective ways to deal with them, and sometimes you do not even need to pay them.

First of all, who are these companies? They are companies who specialize in purchasing debt, sometimes for pennies on the dollar, who then use various tactics to try and collect from you. These tactics may include calling you, sending threatening letters, or possibly even suing you. They buy the debts so cheaply that they can turn a great profit by simply collecting on a portion of the debts. So, what can you do to combat these companies and their tactics?

If you qualify for bankruptcy, these debts will almost always be dischargeable. “Dischargeable” means that any rights that these companies acquired from purchasing the debts are wiped out, as is the underlying debt. Even if these collection companies have sued you and received a judgment, the underlying debt will likely be discharged.

Bankruptcy will most likely be the most effective way to deal with these old debts. If, however, you are not able to file bankruptcy or you do not qualify, it may be possible to challenge the lawsuits filed by these companies. Oftentimes these companies will purchase the debts on the cheap, but in doing so they will not buy all of the necessary paperwork to prove what they are required to show when filing a lawsuit against you in the magistrate court. I would need to review information related to the lawsuit to see if this is an option.

Finally, in a worst-case scenario where bankruptcy is not an option and you cannot beat these companies in court, it may be necessary to come to some type of settlement agreement to pay the debt. If you have a lump sum of money available it is possible that they will take less than the full amount of money owed in a negotiation. Their willing to negotiate will vary by circumstance.

Your best option can probably be determined by speaking with an experienced bankruptcy attorney like myself. I would be happy to sit down and discuss any third-party collection agency and what we can do about them. I have been filing bankruptcy on these types of collections for almost 15 years. Do not allow these companies to threaten and scare you. They can be dealt with and disposed of. Call me at 412-414-9366 to set up a free consultation so I can help you determine your best path going forward!