Acct charge off, sell to different co., dont pay??

[arejay]

So I spoke to one of these "credit repair" companies to try and get a couple of questions answered prior to starting to go the repair route on my own. The representative explained something to me that sounded legit, but at the same time too good to be true. So I thought I would run it by everyone here to see what you all thought.

Basically the rep said that if you took out a loan with ABC bank and for whatever reason did not make payments on the loan. Eventually the loan gets "charged off". Somewhere at the end there ABC bank sells the loan/debt to another company, we'll call them 123 Bank. The rep said that since you never signed an agreement with 123 bank to repay the loan, you are not legally obligated to repay it.

Like I said, it makes sense, but at the same time it would seem to me that if it were true 123 bank would never have purchased the debt in the first place right?

Any input would be apprciated. Thanks!

[jjgross]

Originally Posted by arejay

So I spoke to one of these "credit repair" companies to try and get a couple of questions answered prior to starting to go the repair route on my own. The representative explained something to me that sounded legit, but at the same time too good to be true. So I thought I would run it by everyone here to see what you all thought.

Basically the rep said that if you took out a loan with ABC bank and for whatever reason did not make payments on the loan. Eventually the loan gets "charged off". Somewhere at the end there ABC bank sells the loan/debt to another company, we'll call them 123 Bank. The rep said that since you never signed an agreement with 123 bank to repay the loan, you are not legally obligated to repay it.

Like I said, it makes sense, but at the same time it would seem to me that if it were true 123 bank would never have purchased the debt in the first place right?

Any input would be appreciated. Thanks!

Ok 90% of the people don't know there rights.If you owe a bank and don't pay,they have 2 choices sue and get a judgement and garnish you wages.well banks don't want to do that so they either assign it to a collection agency to collect for them,or sell it for pennies on the dollar.When your told not to pay first dispute them with the ca.Remember you have no contract with b so they can sell it to c who will try to collect,can't have no contract with you so you dispute them.It can go through several ca.So don't let them bully you.

[arejay]

I appreciate the quick reply, but am not sure I completely understand your explanation.

So, if the OC charges the account off and then sells it to a collection agency or any other company, can that "other company" legally collect the debt from you now considering you have never entered into a legally binding agreement with them?? Further more, can the company your debt or account is sold report to the bureaus? And lastly, after the OC charges off and sells your account is there anything that can be done in regard to the OC's reporting to the bureaus? Can you have anything removed after the account is charged off and sold?? Thanks again!!

[chane]

Originally Posted by arejay

I appreciate the quick reply, but am not sure I completely understand your explanation.

So, if the OC charges the account off and then sells it to a collection agency or any other company, can that "other company" legally collect the debt from you now considering you have never entered into a legally binding agreement with them?? Further more, can the company your debt or account is sold report to the bureaus? And lastly, after the OC charges off and sells your account is there anything that can be done in regard to the OC's reporting to the bureaus? Can you have anything removed after the account is charged off and sold?? Thanks again!!

Yes, the CA can legally try to attempt to collect the debt. However, if you never signed a contract with them, you don't legally have to pay them, but most people do. If it went to court, they might try to convince the judge that you agreed to third party involvement if your account became charged off and ultimately the judge would have to figure out whether you did or not and whether they could use that against you. The judge ultimately decides what is "legal" and his interpretation is ultimately the only thing that matters, not yours or the CAs.

I personally refuse to deal with collection agencies EVER. If they want to take me to court, we can fight it out there. But, if you don't educate yourself on the subject or just not show up to court like most people, the judge will reward them a default judgment. At that time, you legally owe them money.

It's legal for them to report it to the CRAs. It's also legal for you to dispute it with the CRAs and sue them if you disagree with it.

Laws can be interpreted many different ways. The CRAs and CAs definitely interpret them differently then us consumers. But smart consumers almost always win in the court of law when they take on these scumbags. Unfortunately, most people don't take them on. They let them push them around their whole lives.

[arejay]

Originally Posted by chane

Yes, the CA can legally try to attempt to collect the debt. However, if you never signed a contract with them, you don't legally have to pay them, but most people do. If it went to court, they might try to convince the judge that you agreed to third party involvement if your account became charged off and ultimately the judge would have to figure out whether you did or not and whether they could use that against you. The judge ultimately decides what is "legal" and his interpretation is ultimately the only thing that matters, not yours or the CAs.

I personally refuse to deal with collection agencies EVER. If they want to take me to court, we can fight it out there. But, if you don't educate yourself on the subject or just not show up to court like most people, the judge will reward them a default judgment. At that time, you legally owe them money.

It's legal for them to report it to the CRAs. It's also legal for you to dispute it with the CRAs and sue them if you disagree with it.

Laws can be interpreted many different ways. The CRAs and CAs definitely interpret them differently then us consumers. But smart consumers almost always win in the court of law when they take on these scumbags. Unfortunately, most people don't take them on. They let them push them around their whole lives.

Wow, thank you very much for taking the time to reply in detail like you did, much appreciated.

So, if I understand correctly, when I signed the original loan contract with the OC, being able to sell the loan to another company and me still being responsible could have been one of the stipulations in fine print, correct?

I figured there was some sort of loop hole because it didnt make sense that the secondary company would purchase the debt, even if it was sold to them for pennies on the dollar if they had no legal ground to collect on it.

Is there a different tactic to pursue when dealing with a collection company or a company that has purchased this sort of debt? Or is the approach the same as if I were dealing with the OC? Thanks again!