Expert: Apex Credit Services, LLC - 5/21/2008

Question
Two years ago my husband and I signed up with a debt settlement company..they have settled two of our debts but one is not settled.  It is for Citibank...who turned it over to LVNV Funding who promptly turned it over to a law office.  We recently received a letter from the law firm stating we have 30 days to dispute the validity of the debt.  Our representative from the debt settlement company contacted the law firm and the law firm said they would settle for $9700.00 and payment over three months.  We DO NOT have that kind of money.  We told our rep at the DS company that we are willing to make monthly payments but she said they will never accept that.  The original debt was for $8732.00 two years ago.  Now, according to the law firm...it is at $13,925.00..which I think is outrageous.  Should we send a Debt Validation letter to the law firm? If we do send one it has to be there by the 23rd of May.  I am wondering this because the debt is valid and our rep from the debt settlement company already contacted them.  What worries me about the DV letter is all the talk of how we will file suit if they violate certain rights.  We don't have a lawyer.  I don't want to anger them and have them file a law suit against us.  Bottom line...I'm scared and don't know what to do.  Our rep at the debt settlement company says that it is not time to worry and that it takes a very long time to actually get to court.  They still call us and I am just out of my mind worrying about what is going to happen. Thanks

Answer
Heather:

   Debt settlement companies are usually a scam and even assuming they aren't, they have no clue as to the FDCPA/FCRA.  We would advise you to send a request for validation to Resurgent Capital, L.P. (the owner of this debt), LVNV Funding (Resurgent Capital's collection arm), and the "law firm."  Simply because you once owed a debt to Citibank doesn't mean that any of the above can properly validate it.  

   A request for validation does not threaten litigation or imply that any violation of state or federal law has been committed.  A proper request simply states that you dispute the validity of the debt and/or the amount owed and thus, request proper validation.  If they are harassing you, insert a proviso in the request instructing them not to call you insofar as it is inconvienent.  That is all that is necessary.

  Just to clarify, Resurgent owns this, not Citibank.  They likely paid a few cents on the dollar for it and now want you to pay more than you owed to the original creditor.  Don't do it inasmuch as doing so is foolish.  This debt could be time barred and even if it isn't, it is doubtful LVNV could prove it up if they did sue you.

  Finally, I would dispute LVNV's account tradeline through the credit reporting agencies as well.  In addition, I would dump the debt settlement firm.  Paying off old debts generally does nothing to help your credit and often times, further damages it.

               Apex Credit Services, LLC
               http://www.apexcreditservices.com