Served with a summons over credit card debt

[INmedgirl]

Hello, I'm sorry to bother you all with a query you've likely heard a million times, but I was hoping to seek advice on my specific situation.

My boyfriend accumulated some credit card debt from 1999-2001. He lost his job from downsizing in 2001, and while he attempted to work with the creditors who were willing, others were not, leading to some deliquent credit card debt.

Today, he received a summons today regarding a ~ $1500 balance. It appears that the debt was bought by an agency "Elite Recovery Systems" who is now being represented by a law firm in KY.

I have been reading a bit on the subject, but I have no background in law and am a bit confused as to how to proceed. He cannot afford an attorney to represent him because he only works part-time and is in graduate school.

1) Should we request a letter of validation? After reading that this is part of his rights under the FDCPA, I told him to ask the law firm for validation when he called them. The creditor whom he spoke with seemed to be a bit flustered by this, he told me, and she stated that they only have one piece of paperwork (if it is the same that was sent to is it is only a letter from Elite giving his name and the amount of debt - isn't more information than that required?). He asked that it be sent to him. Should he send a letter to that effect, requesting the same information?

2) If they are unable to provide sufficient validation, is the case dropped?

My main questions are:

Is it better to settle now for the $980 they are willing to take as settlement (they won't negotiate further) or go to court and allow the judge to decide, after seeing my boyfriend's poor financial situation? Do you think that going to court can result in a good outcome, i.e., can the "settlement" be reduced further according to means to pay (or even dropped completely)?

Thank you in advance for any insight you can offer me.
INmedgirl

[Mr. Knowitall]

He can try to request validation, but given that you admit the debt is valid they will probably be able to document the debt.

Is it better to settle for $980 than lose in court and have to pay $1,500 plus court costs, and possibly plus attorney fees? Sure. But if this is an unusual case where they can't document the debt, or (more likely) they're worried that they have missed the statute of limitations (which appears to be five years if this is a Kentucky matter) then he may be paying more than he needs to. But he'll have to weigh the pro's and con's and decide for himself.

[tinykim]

You should request validation just to be on the safe side.

(You can find good information on Debt Validation at http://en.wikipedia.org/wiki/Debt_validation and a sample validation letter at http://credit.about.com/od/debtcolle...debtletter.htm)

You don't even know if this company has the right to collect this debt for the original creditor. Don't talk to anyone at the company because they will tell you anything to get you to send in some money. In your letter of validation, it states that you are not disputing the debt, merely requesting validation. If they have the back-up documents, they must provide them to you. If they don't, and demand payment again, then they have violated the FDCPA and could be subject to a fine. If they can validate, then you can settle. Most companies of this sort have paid very little money for the debt and will settle for a lot less than you think. But don't just fall on your sword. Make them prove to you that they have the right and the ability to collect this debt. They make their money counting on people not doing their homework. I did mine and ended up being paid by the collection agency and its lawyer!! The collection agency refused to honor my request to validate and then filed a lawsuit contra to the FDCPA. In a countersuit, the collection agency ended up paying ME for violating federal law, in addition to not being paid for the original amount it claimed that I owed (and which it was never able to prove that it had the right to collect!)

You don't want to pay this collection agency and then have another come after you in 6 months because the first one didn't really have the right to collect. You want to see a letter of assignment from the ORIGINAL creditor.

Companies are making billions of dollars buying portfolios of bad debt for pennies on the dollar and then hounding people for bills which are beyond the statute of limitations. Sometimes the debt has been bought and sold several times and the company sending you the collection letter may not have been legally assigned the debt. You pay Company C today and Company B takes you to court the following year because it was assigned the debt by the original creditor years ago. OR the original creditor sues you because it NEVER sold the debt at all.

Always make a collection agency VALIDATE. You can settle any time before you go before the judge. Collection agencies have been known to settle at the back of the courtroom while the docket is being called! Don't rush and make a mistake that will bite you on the ass later. If you ever get a summons, get a consultation from a good consumer credit attorney. It will be worth it in the long run. There are a lot of people who are sick of the bottom feeders so you can find a lot of help out there. One good organization National Associate of Consumer Advocates website (http://www.naca.net). That's where I found my attorney.