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Asked 3 months ago - Aurora, CO
FlagMy wife and I are behind with payments to First Service Credit Union . We applied for this loan back in Sept . 2011 . The loan was for $ 10400 . After we were approved , the following month we received a bill in the mail and paid it . We never received a bill after that ! She called them repeatedly to only talk to an answering service or mail , and never got a call back or an email returned . After not receiving a bill for at least 4 months , our credit statement from Experian stated that our account with 1stSCU was closed and our balance was zero . The following April I started receiving harassing phone calls demanding payment . I asked to get a bill sent to me , so I could pay them . I am still behind because of their mistakes and have received a court summons to pay off the entire balance .
After those four months, what probably happened was that your loan was sold by the credit union to a collection agency.
If you contact a lawyer to Research Who you iwe the money to, it will likely cost you a little money, but you will be certain that any payments you make will get applied to your debt.
Also, it is important to understand that any communication you make with creditors, will be used against you to collect the debt.
I have to tell you . . . I'm a bankruptcy attorney. I represent mostly debtors. I don't like most credit unions. I really don't like big banks. I absolutely despise collection agencies.
That said . . . I think there may be some gaps in the facts you presented above (I'll fill them in a bit), but there are a few things you can do:
1. Dispute the debt with credit bureaus. If they don't prove up the debt, the negative information will be deleted. If they persist in reporting derogatory information without proving the validity of the debt, that would be a violation of the Federal Fair Credit Reporting Act (FFCRA).
2. If you never received correspondence from the folks harassing you (my guess is they are a collection agency, and the reason why your credit report showed a $0.00 balance is because the account was charged off and sold to a company that buys "bad debt" in bulk and at steep discounts) -- you can pursue legal action against them for violating the Federal or Colorado Fair Debt Collection Practices Act (FFDCPA). Under the FFDCPA, the collection agent must send you a written communication concerning the debt within 3 days of contacting you and that notice, among other disclosures, must tell you that you have 30 days to dispute the debt's validity. Moreover, a collection agency is not allowed to harass you and if you tell them to cease communication with you, they must do so (except to tell you they are suing you).
3. You can answer the complaint that accompanied the summons. In your answer, in addition to your right to assert that you have made payments and that the balance owed is due to the lender's mistakes, you again can make them prove the debt's validity. The judge should require that they produce the evidence of debt (typically a promissory note) that shows the debt was properly assigned to them (this requires the note be endorsed). Otherwise, they are not considered to be a "real party in interest."
Chances are, after you file an answer and go to court on the summons date, the judge will tell you to go into a room with an attorney representing the collection agency to work out a settlement / payment plan. Be firm. Bring your proof of payments (i.e., cancelled checks). Bring copies of the emails you sent to 1st SCU. Demand to see a copy of the note, its endorsement, copies of the collection letters that comply with the FFDCPA. If they have the endorsed note, the collection letters and have properly applied all of your payments, try to negotiate a payment plan you can afford.
If they don't have their ducks in a row (and this happens often with "bulk purchase debt buyers" -- their paperwork is sloppy -- to them, it’s a numbers game; they deal in volume and they don't have time to make sure all the "I's are dotted and T's are crossed" -- besides, you are one in maybe a thousand who isn't intimidated and stands up for your legal rights), consider continuing the fight . . . the judge will set a new trial date and you may be able to find an attorney to pursue FFDCPA or FFCRA claims because under those statutes, if there was a violation (and, again, there often is) the lender pays your attorney's fees!
All the best,
Scott
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