AboutTimmy Chou Expertise I am a experienced Mediator and a partner in a management consulting firm. As a mediator I work as a third-party neutral and specialize in partnership/shareholder disputes, management/labor issues, company culture difficulties, and family-owned business problems. I can help describe why alternative dispute resolution may be a good choice for you. As an experienced management consultant I may be able to offer creative ideas to help resolve your organizational and business problems and disputes. "If you say conflict, I say opportunity".
Question My wife has been notified that NCO Financial has filed for arbitration for a credit card debt in the amount of $6,567.29 as well as interest and fees that total around $3,200. It is an old debt they must have bought from MBNA. They send photo copies of MBNA's agreement but nothing with her signature. She does not work. I make a very good salary but after all of our monthly payments, mortgage, etc there's not much left over. Not enough to make a large lump sum payment anyway. I can't say we don't owe the money - although it is an old debt - but we just don't have the resources to pay it. Our credit score has kept us from getting loans. If the arbitration goes against us, which from what I read it will, what's next? What, legally can they do? Can they freeze my bank account? Garnish my wages?
Answer Thank you for your question.
I am not a lawyer and cannot give you legal advice. You may wish to consult an attorney however to understand your legal options.
No one will be able to garnish wages or take anything from you without a judgment. Sometimes the results of arbitrated cases are submitted to a court to be entered as stipulated judgments but unless you have engaged with collection agencies before and agreed to this process your are not compelled to participate.
You do have some rights you should exercise. Do not acknowledge the debt in any way but send a certified letter to the collector saying:
1. That you dispute this collection.
2. That the company cease and desist from collection contacts and calls until they can produce the signed documentation you have asked for.
3. That the company company comply with the provisions of the Fair Debt Collection Practices Act.
4. That any notation or entry on your credit file will not be acceptable and will generate a complaint to your state's consumer protection office.
5. That you will grant the collector ten business days to either produce the documentation or you will consider the matter closed and any further attempt to harass or intimidate you will not be tolerated.
Mail this certified, copy your state's consumer protection office, your attorney (if you have one), and the Federal Trade Commission. Be sure to have the copied groups listed at the end of your letter so the collection agency knows you are serious about your threats.
If anyone calls you, do not engage them on the subject of the debt, but ask them for their name, the name of their supervisor, and then ask them if they are aware that you have disputed the debt and that they have just violated the FDCPA by contacting you. This is the only thing to talk about with them, if you want to talk at all.
Collections is a percentage game. Companies will decide where the low-hanging fruit is and use their resources to go after them. You want to appear as difficult as possible if you can. You may not be able to keep them away, but do not assist them if you can help it. Especially if the debt is old, you must insist that correct documents be produced.
