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  1. #1

    Default A Debt Collector is Trying to Collect an Old, Settled Debt

    My question involves collection proceedings in the State of: Indiana

    In 2014 I settled a debt with QVC. They wrote off a portion of it and I paid a settlement amount.

    In 2018 I received a notice from Portfolio Recovery that they were trying to collect the amount that QVC had written off About that same time, QVC sent me a notice that they were terminating my account for past due amounts. Mind you, I had not used or bought anything from QVC since the settlement.

    I disputed the amount with Portfolio and they sent me a notice saying that I did owe the bill and they would collect. But as proof that I owed the bill they sent me a copy of my last QVC statement from 2014 showing the amount written off by QVC and the settlement amount I paid to QVC.


    How can you settle a debt with the company only to be told 4 years later that you owe the bill again (and Portfolio is saying the amount written off plus what I paid in the settlement is owed)?

    Thank you.

  2. #2
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    Default Re: Trying to Collect Old/Settled Debt

    Did you not receive a written settlement agreement from QVC?

  3. #3
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    Default Re: Trying to Collect Old/Settled Debt

    Quote Quoting labsmom5
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    In 2014 I settled a debt with [a creditor]. [The creditor] wrote off a portion of it and I paid a settlement amount.
    Was this settlement memorialized in a written agreement signed by both you and an authorized representative of the creditor?


    Quote Quoting labsmom5
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    How can you settle a debt with the company only to be told 4 years later that you owe the bill again. . . ?
    The "how" phrasing of this question doesn't make much sense, but the fact that the creditor "wrote off a portion of" the debt is irrelevant. "Writing off" a debt is nothing more than an accounting/tax transaction that has no impact on the creditor's legal ability to collect the debt. As for the rest of this, it sounds like someone made an error and/or is unaware of the 2014 settlement. Send both the creditor and the collection agency a copy of the signed, written agreement that memorialized the 2014 settlement. If you didn't memorialize the settlement in writing, then you may have a difficult time proving that it happened.

  4. #4

    Default Re: Trying to Collect Old/Settled Debt

    After 5 years, I can't begin to think where I would have put the agreement. However, I just called QVC and verified with them that they show I had a settlement agreement and that it has been satisfied. They are going to send me a letter stating such.


    So are you saying that settlement agreement as not really binding as a way to work thru your debts? That even after a settlement agreement and you paying it, they companies can still come back and try to collect the debt? They why bother with settlement agreement? Why not just file bankruptcy and get out of it all? We were trying to avoid bankruptcy and work with the companies to pay them something. Can they all come back and demand the full amount of the settlement? And we paid taxes on the settlement amounts as federal taxes. So what's up with that? IF I have to pay the settlement amounts can I modify my income taxes that I did NOT get that as income?

  5. #5
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    Default Re: Trying to Collect Old/Settled Debt

    Quote Quoting labsmom5
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    After 5 years, I can't begin to think where I would have put the agreement. However, I just called QVC and verified with them that they show I had a settlement agreement and that it has been satisfied. They are going to send me a letter stating such.


    So are you saying that settlement agreement as not really binding as a way to work thru your debts? That even after a settlement agreement and you paying it, they companies can still come back and try to collect the debt? They why bother with settlement agreement? Why not just file bankruptcy and get out of it all? We were trying to avoid bankruptcy and work with the companies to pay them something. Can they all come back and demand the full amount of the settlement? And we paid taxes on the settlement amounts as federal taxes. So what's up with that? IF I have to pay the settlement amounts can I modify my income taxes that I did NOT get that as income?
    If it was a true settlement agreement, no they cannot come back and demand the full amount. However, if they simply write it off, rather than making a settlement agreement then yes, they can sell off the balance to a collection agencies for pennies on the dollar and the collection agencies can try to collect. I wonder how the collection agency ever got that statement since QVS shows you in the clear after the settlement agreement. It might have been a mistake on someone's part.

  6. #6

    Default Re: Trying to Collect Old/Settled Debt

    So, I am going to keep investigating and pushing this but if in the long run they still say I must pay this off, how can I change my federal tax return to show that I DID NOT receive the write off amount as income and I must still pay it off? Seems to me like I am being double dipped in this case if they filed a 1099 and still say I must pay.

  7. #7
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    Default Re: Trying to Collect Old/Settled Debt

    Quote Quoting labsmom5
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    So, I am going to keep investigating and pushing this but if in the long run they still say I must pay this off, how can I change my federal tax return to show that I DID NOT receive the write off amount as income and I must still pay it off? Seems to me like I am being double dipped in this case if they filed a 1099 and still say I must pay.
    Once you get the letter from QVC and provide the collection agency with a copy of the letter, they will have to stop trying to collect from you. If the tax return where the 1099-C showed was 2014 or 2015, it would be too late to file an amended return and get a refund. If you are still paying on the balance for that year however, you could file an amended return to reduce the balance still pending.

    You would not be able to do anything on 2018 or 2019 as the Trump tax law changes got rid of that particular deduction.

  8. #8
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    Default Re: Trying to Collect Old/Settled Debt

    Quote Quoting labsmom5
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    So are you saying that settlement agreement as not really binding as a way to work thru your debts?
    I did not write or intend any such thing. What I wrote was (I thought) quite clear: If you failed to document the settlement in writing, then you may have a difficult time proving that it happened. As mentioned, based on your original post, it seemed that the creditor and the collection agency either made a mistake or was unaware of the existence of the settlement (although that seems to have changed in the 34 minutes between your original post and your follow up post). That being the case, you apparently found yourself in a position where you needed to convince folks that the settlement actually occurred. How are you going to do that if you didn't document the settlement in writing or no longer have the documentation? No one in the collection industry is simply going to take you at your word.

    Also, five years is not a lot of time. A settlement agreement relating to a debt should be maintained, at a minimum, until the applicable statute of limitations expires. In Indiana, that means either 6 or 10 years depending on the nature of the debt.


    Quote Quoting labsmom5
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    That even after a settlement agreement and you paying it, they companies can still come back and try to collect the debt? They why bother with settlement agreement?
    Again, it's all about what you can prove. Let's say that, because of an innocent mistake, the corporate creditor misplaces or loses its records relating to the settlement. Let's further say that, as is often the case, there is turnover in the accounts receivable department, so the person(s) with actual knowledge of your settlement are no longer with the company. Some new A/R person sees that you owe a debt and sends it out for collection and you get sued. You defend on the basis that you settled the debt. But what's your evidence? You apparently lost or misplaced your written evidence, and that's on you. See where I'm going?


    Quote Quoting labsmom5
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    And we paid taxes on the settlement amounts as federal taxes. So what's up with that? IF I have to pay the settlement amounts can I modify my income taxes that I did NOT get that as income?
    No one here is in any position to opine intelligently about your five year old income tax returns.

    Quote Quoting llworking
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    If it was a true settlement agreement, no they cannot come back and demand the full amount.
    I think it's important here to distinguish between what the creditor can do and what it legally may do. In this case, it is obvious that the creditor can demand the full amount because that appears to be exactly what happened. If the creditor or a collection agency sues, then it will have the burden of proving the debt, and nothing the OP has written suggests the creditor can't meet that burden. The question is whether the OP could meet his/her burden of proving that the settlement occurred. Based on the OP's first follow up post, it seems like he/she probably can meet that burden.

  9. #9

    Default Re: Trying to Collect Old/Settled Debt

    Ok. So I dig out my boxes of receipts and tax stuff from 2014 & 2015. All the settlement letters and agreements are in there. I know I got one from QVC cause I got a release from them too after I paid off the settlement agreement. And when I called about it, the representative said that she saw it in the files that I had a settlement agreement.

    But I am not clear on your comment "If the tax return where the 1099-C showed was 2014 or 2015, it would be too late to file an amended return and get a refund. If you are still paying on the balance for that year however, you could file an amended return to reduce the balance still pending.

    You would not be able to do anything on 2018 or 2019 as the Trump tax law changes got rid of that particular deduction."


    What deduction are you talking about? I paid taxes on all my settlements (what they wrote off was taxed as income) And, yes because of the added income it was put on a payment plan and I am STILL paying that.

    Thanks for all your help.

  10. #10
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    Default Re: Trying to Collect Old/Settled Debt

    When you try to get back money that you paid in tax due to a 1099-C its a miscellaneous itemized deduction. Miscellaneous itemized deductions were eliminated with the new tax laws. However they would still apply for prior years.

    When you file an amendment to get a refund you have a deadline. That deadline is 3 years from the date the original return was filed, or two years from the date that it was paid off. Since you are still paying on the debt you could file an amendment to reduce the amount due if needed.

    However, as soon as you get the promised letter from QVC you will have the necessary evidence (if there wasn't enough with your tax papers) to prove that the debt was settled so the whole issue of amending your return is a moot point.

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