How Do I Handle A Debt Collecting Company?

Tom McCutcheon – Attorney at Law

Q:        I recently got a letter from a company called Portfolio Recovery about a Visa card that I have made no charges on in over four years.  I have been trying to pay the minimum payments but I might have missed one or two in the last year.  I don’t know who Portfolio Recovery is.  I have never done business with them and I really don’t have the money to pay all the charges they say I owe.  I don’t think I owe all the money they say I owe.

DeeDee

Florence, AL

A:         There are a number of companies such as Portfolio Recovery and Midland Funding LLC that buy “bad debt” for pennies on the dollar and then try and collect it.  These companies try and buy this debt for literally pennies on the dollar, sometimes $0.04 per dollar and then try and collect the full amount of the debt.

We have seen a number of lawsuits filed by law firms who do nothing but collect debt.  Often they will work out an arrangement with a local lawyer to pay an appearance fee so they don’t have to show up from out of town.

My advice has always been to ask for proof of the debt immediately upon receiving a letter from a debt collector.  If you receive a harassing phone call, tell them not to call you back.  Ask them to put it in writing.  If they continue to call you after you have asked them not to, you may have a Fair Debt Collection Practices Act violation. The letter that you write should include that you “dispute the claim and you are asking for signed written proof of the debt.”

Often these companies do not have the documentation that they need or a witness to authenticate the original debt.  We have seen a fair number of cases where the original debt is beyond the statute of limitation for collection and that may well be true in this instance.  If you are sued over this debt, please contact an attorney to file an answer that includes the defense of statute of limitations.  If you request proof of the debt, the judges will typically allow the debtor limited discovery to see the proof, such as it may be, that the creditor has.

It certainly sounds as if your debt may be beyond the statute of limitations.

Buckle up and drive safely.

McCutcheon & Hamner, P.C.

256.764.0112