Expert: Christine Janklow - 9/28/2009

Question
In 2006, my husband %26 I purchased some furniture from the local Gambles/True Value.  When we purchased the items, we filled out a credit application with Farm Plan, the company that extends credit for your purchases from Gambles.  The owner of the store told us that we could drop the payments off to him so we wouldn't have to mail the payments in to the finance company.  We had been paying each month but a terrible blizzard hit our town & caved in the roof of the store.  The owner decided to go out of business after the blizzard.  We did not receive a bill from the finance company, nor did we from the owner of the store.  Two weeks ago, the owner shows up at our apartment wanting to collect for the items we had purchased.  He showed us a handwritten receipt from the date of our purchase along with a running tally of the payments we had been sending to him before the blizzard.  From 2006 to current, he has been charging us 2% interest per month for the unpaid balance.  I want to know if he has the right to collect on this bill or should it be the responsibility of the finance company to do so.  Any salvageable merchandise the owner had was sold out to the local lumber company who has never collected from us either.  I just want to make sure that he can legally collect from us or is he just trying to 'pull a fast one' over on us.

Answer
Christina:
Thank you for your question. Based on the information you provided, you need to do two things before you pay anyone:
1. Make sure that the Statute of Limitations (different per state) for this old debt to be collected is still in force. To check on this you can visit - http://credit.about.com/od/statuteoflimitations/a/entirestatesol.htm

If it is still in force, someone can collect on it, however it does not seem likely that the someone in this case is "Mr. Out-of-Business-furniture-store". Your contract and the funds lended you were financed through Gambles/True Value and their financing departments, they are the creditor and unless they have assigned a past due debt to a legitimate debt collection agency, no one else should be entitled to do so.

2. You need to get in touch with them ASAP to find out the status of your account, (assuming the SOL is still in force, and what if anything is due, and to whom you now owe or will need to pay. Don't give in to Mr. OOBFS, he may be desperate for money, and looking to prey on unsuspecting past customers for some quick cash. If he visits or call on you again and you in any way feel threatened don't hesitate to call in law enforcement. There are laws in place on proper debt collections, check out www.ftc.gov for the Fair Debt Collections Practices Act guidelines.

Hope you find this helpful. If so, please take a moment to provide a good rating to enable others in similar shoes the benefit of your answer.

Respectfully,

Christine Janklow