Portfolio Recovery out of SOL. Send FOAD?

[IheartLoopHoles]

Thanks everyone. Ok here is another question....

 

If you do the PFD for a settled amount, a CA can't send you the 1099-c for the written off amount right? Since they didn't incur the loss, the OC did.... and then they paid a very small fraction to buy it? Kind of answering my own question here but want to make sure it's worth it if I choose to do PFD.

[IheartLoopHoles]

On 10/18/2022 at 10:31 AM, PotO said:

 

You are right.  A PFD removes the tradeline completely.

 

One thing to consider is that the PFD with the CA only affects the CA's tradeline and not the OC's.  If the OC is reporting, you need to negotiate a PFD with the OC and not the CA.  Unfortunately most CC OC's will not negotiate a PFD.

My understanding with OC's is once they have written it off their books via charge-off and then sell it to a JDB there is no business to be done. They consider it gone/not theirs anymore and will refer you to the JDB they sold it to.

[hegemony]

1 hour ago, IheartLoopHoles said:

My understanding with OC's is once they have written it off their books via charge-off and then sell it to a JDB there is no business to be done. They consider it gone/not theirs anymore and will refer you to the JDB they sold it to.

not every CA is a JDB.

 

the contract between OC and CA can be complicated.

 

That said, the OC can still report the tradeline if you PFD with a CA.

[PotO]

3 hours ago, IheartLoopHoles said:

Thanks everyone. Ok here is another question....

 

If you do the PFD for a settled amount, a CA can't send you the 1099-c for the written off amount right? Since they didn't incur the loss, the OC did.... and then they paid a very small fraction to buy it? Kind of answering my own question here but want to make sure it's worth it if I choose to do PFD.

 

My understanding is that only the entity that owns he debt can send the 1099.

 

3 hours ago, IheartLoopHoles said:

My understanding with OC's is once they have written it off their books via charge-off and then sell it to a JDB there is no business to be done. They consider it gone/not theirs anymore and will refer you to the JDB they sold it to.

 

As brother @hegemony so accurately stated, there are distinct and important differences between OC, CA and JDB.  Not all CAs are really JDBs and JDBs often use CAs to collect their debts.  Also, the FDCPA does not apply to OCs, although the Rosenthal Fair Debt Collection Practices Act does.  Also, there have been several FTC advisories about how the FDCPA does not apply to JDBs, although virtually every JDB will comply with the FDCPA to avoid the issue of whether the FDCPA applies to them being heard by the courts.

 

Regarding this debt, exactly what are the tradelines on your credit reports?  There are distinctions which should indicate whether or not the OC still owns the debt and if an entity is a CA or a JDB.  I've not looked at those things for a while so I am not entirely sure myself, but I believe @hegemony, @hdporter and @centex could shed light on this.  

 

As for PFDs, almost every CA will accept them and most JDBs will, too.  Most OCs will not.  You need to identify the players.  It would suck if you negotiate a PFD with a CA, but then the OC / JDB derogatory tradeline is still on your credit reports.   

[legaleagle2012]

My dear Pot-O: Gotta read the fine print, Jethro. He hasn't been sued. The case I cited addresses "filing or threatening to file a lawsuit ." Nothing else. Altho sending one of those nice collection letters that does not include the language that the debt is beyond the SOL and you cannot be sued for it would be a violation in his circuit. (I doubt they are that stupid)  It mischaracterizes the legal status of a debt. "Normal collection activities" must comply with the law; they can ask, pretty please pay us, nothing else. So far there have been no collection activities, hence I told him he has no basis to do anything. Now mosey on down to the ce-ment pond and have some Irish coffee, you all. 

Edited October 20, 2022 by legaleagle2012

[IheartLoopHoles]

The OC is reporting as a charge-off. CA is reporting as balance due....

[hdporter]

On 10/19/2022 at 5:54 PM, IheartLoopHoles said:

Thanks everyone. Ok here is another question....

 

If you do the PFD for a settled amount, a CA can't send you the 1099-c for the written off amount right? Since they didn't incur the loss, the OC did.... and then they paid a very small fraction to buy it? Kind of answering my own question here but want to make sure it's worth it if I choose to do PFD.

 

A 1099-c has nothing to do with the value at which the debt is carried on the books of the issuer.  It has everything to do with the benefit received by the account holder.

 

No matter how little a CA/JDB purchased your debt for, they now have a legal right to recover the face value of the debt from you.  If you're relieved of that obligation through debt forgiveness (abandoned collection efforts), your benefit is the debt face value.  And that's the amount for which the 1099-C will be issued in.

 

(Admittedly speculation, having no first hand experience with this ... but I'll stand behind it with a rigorous Acct/Econ degree from a "lofty" inst.)

[legaleagle2012]

1099s do not cancel the debt, according to the IRS. If it is 200 and you settle for 100, they can 1099 you for the other 100.

 

"Since scientists can't prove that cigarette smoking causes cancer, why would anyone expect them to know anything about climate science?"

 

 

That's funny. Interesting fact; the actor who played "Marlboro Man" died of lung cancer. 

So did 3 others who played him, and so did RJ Reynolds III. Just proves cancer cures smoking.

 

[IheartLoopHoles]

So I have received 1099-c's from some of my charge-offs and had to account for that as income on my taxes.

 

I'm guessing I should not have to do that all over again with the CA that now owns the debt. Paying on the written off amount more than once is obviously not correct.

 

[hdporter]

8 hours ago, IheartLoopHoles said:

So I have received 1099-c's from some of my charge-offs and had to account for that as income on my taxes.

 

I'm guessing I should not have to do that all over again with the CA that now owns the debt. Paying on the written off amount more than once is obviously not correct.

 

 

Your former creditor should cease debt collection after issuing a 1099-c (and should not be selling the debt to a CA/JDB).

 

Here's what the IRS says re this matter:

 

Quote

After a debt is canceled, the creditor may send you a Form 1099-C, Cancellation of Debt showing the amount of cancellation of debt and the date of cancellation, among other things. If you received a Form 1099-C showing incorrect information, contact the creditor to make corrections. For example, if the creditor is continuing to try to collect the debt after sending you a Form 1099-C, the creditor may not have canceled the debt and, as a result, you may not have income from a canceled debt. You should verify with the creditor your specific situation. Your responsibility to report the taxable amount of canceled debt as income on your tax return for the year when the cancellation occurs doesn't change whether or not you receive a correct Form 1099-C.

https://www.irs.gov/taxtopics/tc431

 

I read this to say that if a creditor continues collection of a debt after issuing a 1099-C, you should request that the creditor and instruct them to amend the 1099-C to cancel it with the IRS.

 

I don't see much gray area around this topic.  Either the debt is cancelled and the face value reported via 1099-C, or collection continues and issuance of a 1099-C is invalid.  Even in the case where a creditor sells a debt for less than face value, there's no immediate income attributable to the debtor; the debtor is still on the hook for the full face value with the new owner of the debt.

 

btw, I'll also stress that it's possible that many recipients of a 1099-C may escape tax liability by filing the IRS form to establish that they were insolvent at the time of issuance.  (Insolvency translates as a negative net worth.)

[IheartLoopHoles]

On 10/19/2022 at 3:58 AM, legaleagle2012 said:

 

Kaiser v. Cascade Capital, LLC - Ninth Circuit Court of Appeals

 

"Joining other circuits, the panel held that the FDCPA prohibits filing or threatening to file a lawsuit to collect debts that were defaulted on so long ago that a suit would be outside the applicable statute of limitations. The panel held that these prohibitions regarding time-barred debts apply even if it was unclear at the time a debt collector sued or threatened suit whether a lawsuit was time barred under state law. The panel concluded that plaintiff’s debt was time barred under Oregon’s four-year statute of limitations. Accordingly, plaintiff’s complaint stated a claim for relief under the FDCPA."

 

Still trying to find an angle here. @legaleagle2012 do you think the following statement on the TL could be construed as threatening law suit?:

 

Seriously past due date / assigned to attorney, collection agency, or credit grantor's internal collection department

 

They are reporting this on all of the TL's.

[shifter]

No. 

[legaleagle2012]

No, they would have to take some type of action against you in a letter, etc., or by actually filing a suit. 

[Why Chat]

On 10/18/2022 at 12:39 PM, Why Chat said:

Try this;

https://whychat.me/GUIDEBOOK.html

 

Once you have successfully deleted any and all old addresses and it has been more than 90 days since your last unsuccessful dispute, you can try disputing this way;

https://whychat.me/SOL PROGRAM GUIDE.html

https://whychat.me/initdispltrsol.html

 

DO NOT try to check your dispute on line. The method described is designed to keep the dispute out of the CRA's automated computer systems. ( do not call either)

 

If you wish to try the method I suggested and it doesn't work you can always try a PFD or whatever. Remember there is always a possibility that the reporting CA did NOT get the account assigned to them from the OC but instead obtained it from a data miner and therefore any PFD to the CA would have no effect on the reporting by the OC

[legaleagle2012]

PRA has that delete promise right on their site. By paying, you have entered into a contract. If they don't delete, that breaches the contract. Two guesses what happens next. They are NOT that *Admin prohibits insults that reference an individual's intelligence.*.

[dvd]

On 10/18/2022 at 9:53 AM, IheartLoopHoles said:

Thanks WhyChat. My understanding was that a PFD gets deleted from your CR's altogether and PRA specifically offers this as an option?

 

FYI- Portfolio Recovery is one of the collection agencies that will automatically delete once you pay/settle the collections.

[Goku4]

Watching this thread because Portfolio/PRA is my last baddie but mine is within SOL..People are advising me to call them, offer 35%, not pay more than 50%. My concern is they will sue me as my credit score rises, my situation slightly different than OP.

[Goku4]

On 10/30/2022 at 7:16 AM, legaleagle2012 said:

PRA has that delete promise right on their site. By paying, you have entered into a contract. If they don't delete, that breaches the contract. Two guesses what happens next. They are NOT that *Admin prohibits insults that reference an individual's intelligence.*.

They don't just lie/keep the money? They don't do that? Are they known to settle for less?

[Bluesie58]

18 hours ago, Goku4 said:

They don't just lie/keep the money? They don't do that? Are they known to settle for less?

What do you mean by “keep the money”?  PRA is a debt buyer.  When it purchases accounts, it owns them and is owed the money.  So, yes, they keep the money because they own the account.

 

Yes, they are known to settle for less.  Just get everything in writing.  As long as the amount agreed upon is paid within the allotted time, that amount settles the account.  It’s just like any other contract.  As long as you hold up your end, they can’t come back and sue you for more than what they agreed to.

[Goku4]

On 11/27/2022 at 7:35 AM, Bluesie58 said:

What do you mean by “keep the money”?  PRA is a debt buyer.  When it purchases accounts, it owns them and is owed the money.  So, yes, they keep the money because they own the account.

 

Yes, they are known to settle for less.  Just get everything in writing.  As long as the amount agreed upon is paid within the allotted time, that amount settles the account.  It’s just like any other contract.  As long as you hold up your end, they can’t come back and sue you for more than what they agreed to.

I meant, like, collect the money for perhaps a PFD getting the payment in full and then refuse to PFD.

 

In my instance I was honestly just wondering my chances if I acted as though it didn't exist, and just let it age, if they would come after me.. they got mine mid-2020... not trying to threadjack and was going to post in other thread about it but it is my last baddie.

 

Worst case is I don't want to poke the bear, make them interested, have them not want to settle, and end up sued.

[hegemony]

34 minutes ago, Goku4 said:

I meant, like, collect the money for perhaps a PFD getting the payment in full and then refuse to PFD.

 

In my instance I was honestly just wondering my chances if I acted as though it didn't exist, and just let it age, if they would come after me.. they got mine mid-2020... not trying to threadjack and was going to post in other thread about it but it is my last baddie.

 

Worst case is I don't want to poke the bear, make them interested, have them not want to settle, and end up sued.

doesn't matter when PRA bought it... is it out of SOL?

[Goku4]

1 hour ago, hegemony said:

doesn't matter when PRA bought it... is it out of SOL?

 

1 hour ago, hegemony said:

doesn't matter when PRA bought it... is it out of SOL?

At about 2.5 years... I wish I could say it was but I do not think it is.

 

I could give the State this all would be going down in but I don't want anyone to get all crazy. I'll try to surmise.. My credit score is rising, one Student Loan debt (ITT) completely wiped out because ITT was a fraud... The other one (DeVry) SHOULD be as well, it sure was on the communication I got - Devry Institute of Technology, Devry College of Technology and DeVry University. All three were. I put my application in I just hope not too late but.. Credit score presently sitting at 620 and 624 as per Credit Karma and Experian ?? it was in the mid to low 5s. So. Score going up. Cards paid down, not much left to pay on them at all.... 

 

I even got another Capital One card $300 limit mind you, C1 charged off to PRA.

 

Forgot my login information to check if there is a settlement offer on PRA website. Last time I looked (earlier this year?) there was not one.

 

And this is why I am asking these questions. I did technically make a separate thread.. PRA was at topic of this one, so. Here I am, opening up the browser and checking in on if I should legitimately just leave it alone or if that would be unwise. Are they good about checking on accounts they own when they feel they can collect?

[hdporter]

First, PRA has no reputation of reneging on PFD.  You want this off your credit report?  Call then and negotiate and don't wince about the possibility that they might screw you.

 

The internet groups are chock full of successful PFD stories where it comes to PRA.  They're a churner ... they intentionally incentivize people to pay a fraction of the debt to clear it off their books.

 

 

[Goku4]

On 12/13/2022 at 12:19 AM, hdporter said:

First, PRA has no reputation of reneging on PFD.  You want this off your credit report?  Call then and negotiate and don't wince about the possibility that they might screw you.

 

The internet groups are chock full of successful PFD stories where it comes to PRA.  They're a churner ... they intentionally incentivize people to pay a fraction of the debt to clear it off their books.

 

 

 

I have to say, I'd rather pay Portfolio a percentage than in full! I am gathering that I should call when I'm ready to pay from a "burner card" maybe like Chime..

 

Maybe my goal for January. I don't think there is enough time left in this year since we are talking about negotiating "Half or less" on a touch less than $3000, I have paid off other things. 

 

Maybe this won't go as bad as I think it will.

[legaleagle2012]

Read the fine print. That pay for delete might only apply if you pay in full. I never looked, but you should.