Purchase of previous debt by third party collection agency

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chryo

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I need some advice as to how to handle a situation that has presented itself again after 10 years. When I was in the service I had a citibank visa card. In 1990, I was deployed to the persian Gulf for Operation Desert Storm and Desert Shield. I spent 6 months in Country and when I returned home my credit was severally damaged due to the fact that I had not received any nor was I able to remit payment on the credit card. I left the service shortly there after and I took a low paying job in order to make ends meet. As I felt obligated to settle the debt I had incurred, I contacted a Credit Counseling Service. i was told that with my present Debt and current income, there was no way for them to assist me as I did not earn enough to pay rent and utilities and their fee as well. I did not have the money to file Bankruptcy so my only alternitave was to allow the debt to be written off and suffer the consequences to my credit rating. For the most part I have repaired my credit, however the Citibank bill seems to rear it's ugly head every once in a while. My account has been transferred in a portfolio on two occassions. The first was to Capitol One. They contacted me once but never again. Now it has found it's way into some other collection agencies hands. What are my legal obligations to this "third party" who has begun a process of harrassing and threatening calls. I have read the Fair Debt Collection Practices Act but it indicates that the the document does not apply to any party who obtained the debt in a commercial credit transaction. (Sec 803, Paragraph 6F, item iv)
 
Fair Debt Collections Practices Act

§ 803. Definitions [15 USC 1692a]

As used in this title --

(1) The term "Commission" means the Federal Trade Commission.

(2) The term "communication" means the conveying of information regarding a debt directly or indirectly to any person through any medium.

(3) The term "consumer" means any natural person obligated or allegedly obligated to pay any debt.

(4) The term "creditor" means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.

(5) The term "debt" means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

(6) The term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 808(6), such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests. The term does not include --

(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;

(B) any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;

(C) any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;

(D) any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;

(E) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; and

(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.

(7) The term "location information" means a consumer's place of abode and his telephone number at such place, or his place of employment.

(8) The term "State" means any State, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any political subdivision of any of the foregoing.
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I was just curious as to what my obligations were to this third party. What actions can they take?(i.e. Can they report this account as delinquint on my credit report? Can they file legal proceedings? Do they have the right to do all the things that were done by the original account holder? What actions can I take to stop the harrassment?

As far as harrassment, they are calling me continually, threatening to ruin my credit, offering me one time payment settlements, threatening legal action if I don't comply.
 
I can't say if you fall under this situation, but many consider bill collection to be "harrassment" since they don't want to deal with the situation and want it to go away. The creditor has an absolute right to pursue someone who owes them money, and you'd probably be zealous if you were the one who lent them the money!

Yes, it is possible that they could sue you for the money. After all, you did make an agreement to pay back the money. All the details should be contained within your agreement. Your credit may be affected. While there is generally a period of time in which items are wiped off your credit report (I believe it is 7 or 10 years), you really don't want this to happen.

If they went far over the boundaries of good taste (they call you at 12 am on the loan) then you do have a case for harrassment. If you want it to stop, then you can send them a letter stating that you do not intend to and will not pay the money and that they should quit calling and contacting you. That should stop the calls although it may not help you in the event you go to court, which is more likely once you send the letter.
 
To clarify, these individuals have a right to harrass me in regards to monies owed even though they are not the original account holder, but in fact, purchased the debt from another company that had previously purchased the debt from CitiBank? They have the right to post negative credit remarks on my report on the same account that was written off by the original account holder in 1992? I have already suffered for 7 years due to this unfortunate situation with negative credit ratings. Isn't this double-jeopardy? Is it legal for me to go through the same punishments for the same account on several different occasions? I don't understand how it is acceptable for a company to purchase a portfolio of unpaid accounts and start a policy of harrasment. I did not sign any agreement with this third party collection agency, yet they can still behave as if I had? This sounds like mob rules.

Again, the harrassing party is not the original debtor and is not acting on behalf of the original debtor. They are simply trying to turn a profit on the purchase of an unpaid accounts portfolio secured through a commercial credit transaction from Capitol One who purchased the account from Citibank. Am I legally obligated to this company for this debt?
 
I hope that my post doesn't give you the impression that I am making light of your situation -- I'm sure it is difficult. However, that said, they do have a right to purchase the debt of another and go after you for the debt. They have stepped into the shoes of the creditor. This probably in your agreement you signed with Citibank and I could not see why you would care who collected on the loan from you. There is nothing wrong with the company trying to make some money by purchasing a bad debt, however, they take significant risks that the money which they spend to purchase these loans will never be recouped. Citibank only recovered pennies on the dollar because they decided that you were a bad debt. You have a choice to claim bankruptcy or deal with the repercussions.

As I said in the first post, I haven't yet heard any harrassment. If you don't contest the debt and want the collector, or rather the owner of the debt, to stop calling you then you can send a letter stating that you will absolutely not pay the demand for payment and demand that they cease contacting you. They probably won't spend time collecting and will go after you in court.

With regard to double jeopardy, that only occurs if you are in court in front of a judge and your freedom or property are in jeopardy. I'm not sure how the 7 year rule applies with regard to two different parties who own a debt and each may have a 7 year term. Regardless, you owe the debt but simply don't care to pay for it. The law doesn't usually come to the aid of those who don't abide by the law and here you are not abiding by refusing to pay back any portion of the debt. The reason loan percentages rise are also because of people who don't pay back their debts.

I think that you need to look at this situation another way. For the most part, you will be viewed as the party in the wrong here. You have a debt which you should not have taken out if you couldn't pay for it. It seems as though you haven't paid anything on the debt, e.g. $20 per month. A "credit agency" won't help you since you are a credit risk who has already been a bad debt to someone else and are looking for a security! It is an added cost. You should negotiate directly with the collectors. You can file for bankruptcy (and don't necessarily need an attorney) but you need to take the time and make the effort. You can always contact the local bar association for assistance. Those are your choices and it seems like there are choices you can make and you haven't stated any "harrassment" that has occurred.
 
Thank you for your information.

As an FYI, I have since restored my credit by paying as agreed on my incurred debt. The situation here was one beyond my financial ability to reconcile in 1992. Additionally, this current debtor has offered a one time payment of $800 dollars of the $1300 original which is still beyond my means and does not seem interested in a payment plan.
 
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