Expert: Creditwrench - 7/23/2008

Question
I was unemployed between August 2006 and August 2007 and as a result defaullted on a number of debts with a total value of over $50,000.  After obtaining employment in 2007 I began makeing payment on these debts on a regular and consistant basis.  Some are already paid off and others are gradually paying down.  One account of unsecured credit in the amount of $24,000 was sold to a collection attorney.  After 6 minths of payments at $400 per month I increased my payments to $500 per month.  For the next few months I found they were no longer taking the payments on the scheduled date, and I had to call each time and set up the payment.  Each time the collector first offers me an offer for a settlement in full which I cannot accept as I no access to cash for a lump sum payment.  I offer to continue my payments with the expectation of increasing my payment to $1000 per month in October 2008.  The collectors have then become abuse and tell me they have no obligation to accept my monthly payment and have intention to sue or take "other" legal actions.  Each time they have eventually  taken that months payment over the phone.  What recourse do I have if they refuse to contine taking my payments?

Answer
You have no recourse at all so long as you are trying to cooperate with them. They take your good efforts as a sign of weakness and much like a barking dog which will become much more aggressive if you show fear.

You need to learn to defend yourself against the possibility that one day they will do just what they threaten to do and file a lawsuit on you. Accept the fact that they might very well do just that. Prepare yourself for that eventuality now. Learn what laws they violate, record all phone conversations with them using a digital voice recorder and keep a written record of them as well. You will soon have a nice history of their violations.

When the time comes that you have a few violations recorded start controlling the conversations instead of letting them control the conversations. If they refuse to take your payments and start their illegal threats tell them that if they want to take you to court then they should do just that. Tell them to either take your money or take you to court. Tell them you are sick and tired of getting this hassle every time you want to make a payment. When they start giving you a hard  time demand a full accounting of the debt.

Let them know you are not the least bit afraid of them or their lawyers.
After all, there is no need to be afraid of them or their lawyers if you are well prepared to not only deal with them on a local basis but on a federal basis as well.

What you don't seem to realize is that they will never give you any receipt for your payments and you will probably end up paying forever and stand an excellent chance of ending up in court anyway.

I realize that you are fearful of having to go to court but once you have become familiar with how to go there and defend yourself against their lawyers and win there is nothing to fear except fear itself.

Learn that even though you pay them and try to do the right thing your payments are actually being used against you via your credit reports.
You are actually doing nothing but buying your own bad credit.

I don't blame you for trying to do the right thing and nobody else will either but are you really doing the right thing for yourself? That is a question you should be seriously considering.

I can assure you that while you are doing the right thing from a moral standpoint you are doing the wrong thing for your own good. You are simply paying out huge sums of money fruitlessly hoping to stave off what may well  turn out to have been inevitable anyway.

All that money could be going towards your eventual retirement or making a better life for yourself.