Need some legal advice on debt collection

[help_with_debt]

I was in the US for a number of years, international student. Had a baby and as a result of that got hit with a lot of health bills - that I am still paying although I went back to my home country.

I got promised a job when I graduated, but due to the recession - it didn't work out too well. I was able to work remotely, but that has since fallen through.

I had a car while I was up there and was making my payments consistently for a while - but after I moved and ran out of cash and income, I have decided to not pay it right now (mainly because I have to put my kid through school, etc.).

Now I am being notified by a debt collection attorney, and I have 35 days to reply in writing otherwise I will be liable for not just the outstanding debt, the interest and possibly the attorney fees of the company.

I no longer live in the US, and if I wanted to I could just walk away from it - but I believe in honoring my obligations (I have been doing that for my credit cards and hospital bills still outstanding).

What do I do? Do I contact the debt collection agency or do I get an attorney? I am kinda strapped for cash right now, so can't afford an attorney.

Once I get my cash and income situation taken care of, in the next few months, I would definitely be willing to settle it - but I don't want to just ignore it and then get hit with a big bill in a few years - or possible immigration issues.

I would prefer not to burn my bridges, and would like to go back to the US (if I need to) without having to look over my shoulder. So I would really like to get this taken care of.

Thoughts?

[michael_dorfman]

I don't see any need for an attorney-- just get in touch with the debt collection agency, and see if you can work out a payment plan-- some kind of "good faith" payment until you're in a position to make a settlement.

Of course, this would have been much easier for you if you had dealt with it earlier, before it got to the debt collection attorney. As as business owner who has to deal with past-due debts, I can tell you that we're almost always willing to work something out with the debtor prior to handing it over to a third party, but once it is in the third party's hands, they're in charge of the show, and they want to recover their costs, too.

[help_with_debt → michael_dorfman]

I didn't want to get in touch with them, before getting legal advice - for fear of incriminating myself or doing something unwise before getting proper counsel.

I did try to deal with it earlier, with the car company, but the terms of a settlement were still too onerous. They wanted a lump sum figure (albeit with a 30% discount) - which was still way too high for me.

If I had the certainty of future cash flows, I would have pressed to get it resolved earlier - but I knew that my cash flows would be in jeopardy in a few months, so figured it would be best not to get into such an arrangement.

I do plan on working out something in the future though....once I can get through this.

[patio11]

If you're abroad, there is essentially nothing they can do to collect from you. You want the pain minimizing steps?

Dear Collector:

I am writing you regarding account number #12345, in response to your letter bearing $SOME_IDENTIFYING_INFORMATION.

The Fair Debt Collection Practices Act says that you are not to contact any consumer who gives you written notice that they are inconvenienced by your contact. This letter constitutes your official notice under the FDCPA. You are statutorily permitted exactly one additional communication, delivered via the postal mail, indicating that you have received this instruction.

For your information, I have returned to $NATION. It is not economically feasible to resolve our differences via the legal process at present, but I will contact you again in a few months to discuss disposition of this matter.

Regards,

You

a few months pass

Dear Creditor:

I am writing you regarding debt #12345, continuing our discussion of $DATE. As you recall, I invoked the FDCPA protection against inconvenient contact, and you have since honored your legal obligations to not contact me.

I am prepared to extend you an offer to resolve this matter. As of your last letter, you indicated that I owed $5,400.00 and that you were going to charge interest and legal fees in addition. I am prepared to offer you $5,400.00, delivered immediately, in full satisfaction of this debt.

This is the best resolution your client will receive, and it avoids a costly legal battle which will be complicated by the international issues in this case. I urge you to accept it.

You have my permission to contact me once, via the postal mail, of your final disposition of this matter. If you accept, your acceptance should be in writing and include the language "We accept your offer of $5,400 in full satisfaction of all debts between $YOU and $CLIENT." I will send you a cashier's check via courier immediately, and that will conclude our dealings together.

If you do not accept, please note that the FDCPA prohibition against contacting me outside the above exemption still applies.

Regards,

---

You'll note that they have an option not discussed, which is to sue you. They will probably not do this, because suing someone outside the country very quickly becomes a six figure proposition even for the most trivial of matters.

As a foreign visitor, you may not be aware of how debt collection in the United States operates. Many Americans are similarly unaware. While they talk like bulldogs, their hands are very tied by consumer protection legislation, and short of suing you there is very vanishingly little they can do without your consent (well, report you to credit agencies). They have no channel to the American immigration authorities and if they intimate that they do, they just violated federal law in a very serious fashion.

My expertise on the laws regarding consumer finance and debt collection is not that of a lawyer (and owes itself to a funny story about the difficulty of disambiguating names in a database), this is not legal advice, yadda yadda.

[jacquesm → patio11]

I second all of this except for one minor variation, I'd offer half of the debt owed. That's 'hardball' in return but since you are in debt for stuff that should have been free or at a minimum covered by your insurance (having a baby can cause you to be hounded by a debt collection agency?? what???) I think you'll be excused the karma hit for that. You are an extremely honorable person, and I commend you for that but there is such a thing as being too good, and maybe this is one of those.

They may not agree, which will cause additional back and forth, but worst case you end up where you started. Given a quick way to settle for half versus a much more protracted battle to get the whole they may settle for less.

Just my $0.02.

[help_with_debt → jacquesm]

Thanks for the compliments jacquesm. They aren't hounding me because I had a baby.

It just so happens that my cash flow no longer covers all my previous expenses - and one major reason for that is because I have had to deal with higher than expected health bills from my baby's birth.

I wish I could just offer them their half, and be done with this, but unfortunately I just don't have that right now.

When I do, if I am still able to do that, I definitely will.

[help_with_debt → patio11]

Patio...do you think I can include in there some form of requirement that they send me notification via email - just to ensure that I get it in a timely manner, and likewise I do the same to them.

Because I am not in the US, I will be emailing them with my response - rather than a hard letter (or should I arrange to get a hard letter sent?).

I was thinking of saying something like, all written communication via email should be constituted as s substitute for postal mail due me being out of the country.

How does that sound?

Thanks.

[patio11 → help_with_debt]

No, no, no. Use paper. Demand paper. If they can't figure out how to mail paper internationally -- and this is highly likely -- then you've accomplished your goal of not being hassled.

[help_with_debt → patio11]

So I need to reply to their letter by mailing a letter too?

I was thinking of just emailing them...but you think that's not a good idea?

[kroger → patio11]

> My expertise on the laws regarding consumer finance and debt collection is not that of a lawyer (and owes itself to a funny story about the difficulty of disambiguating names in a database)

Could you share the funny story with us? Now I'm curious ;-)

[help_with_debt → patio11]

Thank you very much for this.

This is exactly what I was looking for.

Really appreciate it.

[patio11 → help_with_debt]

Any time. Thanks for visiting the US, come back soon.

[malandrew → patio11]

You sir are awesome. I am in a similar situation and this information is very useful.

Out of curiosity, assuming I follow your advice to settle my debts, how would I go back to the US and re-establish a life there.

Would following the above advice constitute "bankruptcy" or would it simply result in negative comments on my credit rating?

If it would just result in negative comments on my credit rating, how long would they stay there?

Apart from securing a mortgage, car loan or credit cards, what other consequences would I suffer upon my return to the US? What would I be unable to do? Would it impact employment prospects?

If the credit collection agency violates federal law by claiming that they have ties back to immigration, what recourse do I have to file a complaint against them?

[patio11 → malandrew]

No. If you go through bankruptcy, trust me, you'll know it. There will be a judge involved and a fairly involved litigation process.

This will not result in any marginal negative comments on your credit reports. You've already earned those by dint of not paying your bills as agreed. There is no special box which they can check to say "He knows how to cite the FDCPA. Ding his credit harder!"

Accurate negative information can stay on your credit report for up to seven years from date of first delinquency, ten years for bankruptcies if I remember correctly.

Credit reports are increasingly used to vet prospects for jobs in the United States, and for some insurance purposes. Being delinquent on a single obligation is not exactly outside the mainstream of the American experience.

If a credit collection agency violates federal law by claiming they have ties to immigration, let's see:

a) You are talking to them on the phone. You should never, ever talk to creditors on the phone. If they call you, the most you should ever do is ask for their postal address, and then you send them a letter mentioning the FDCPA and instructing them to never call you. If you legitimately owe them, obviously, you should pay them, but handle all negotiation on paper. Almost all abuse of debtors happens on the phone, because it does not leave a paper trail.

b) Document the threat, immediately. At the very least, write down in a journal who said it (get a name or desk number), when, and what the exact contents of the threat was.

c) You have a couple of options at this point. The easy option is to write them a letter politely informing them that you are aware of your rights, that they have threatened you in violation of the FDCPA, and that instituting legal action against you will turn into a very expensive proposition for them. The less easy but fairly straightforward option is to go to any US court of competent jurisdiction -- your local small claims court works -- and sue them under the FDCPA for making prohibited statements in collection of a debt, namely, falsely alleging legal consequences which do not exist and falsely claiming affiliation with a government organization. You will win. Damages are $1,000 per incident, and your debt stands a good chance of being voided in the bargain.

You are highly likely to have additional legal claims against them based on state consumer protection statutes, torts like fraud, etc. Speak to a lawyer if you want the details.

You can also speak to your state's consumer protection or Attorney General's office. They're fairly big on these things.

For these and other questions, I recommend the Motley Fool forums, Credit Cards & Consumer Debt forum in specific.

[maxawaytoolong → patio11]

If you send them this letter, they may stop calling you, but will figure out a way to harass your wife or your mother.

[patio11 → maxawaytoolong]

They're only allowed to contact third parties to find "location information" for you. If they have successfully made contact with you already, and you have forbidden them from further contact, speaking to any third party about the debt is a per se violation of the FDCPA.

(Your wife is you and vice versa, for the purposes of the FDCPA. Barring them from speaking to you bars them to speak to her.)

If it happens, take a day off work and sue them. You will win.

Edited to add: Forgot to mention, always send mail certified if you are harboring plans of suing people for ignoring its contents. It costs $5 or so and you get written confirmation from the post office that they received the mail, which is admissable in court.

[dzlobin → maxawaytoolong]

The same law bans creditors from contacting anyone related to you