Does an offer to settle a debt for less than the full amount validate the debt?
I received a letter from Cohen and Slamowitz, a law firm, notifying me that my creditor (citibank) has referred my account to their office for collection. They state that I have 30 days to ask them to validate the debt.
I am planning on sending them a letter to validate the debt, but I am considering offering them a settlement amount to clear the debt.
By offering them a settlement offer (a take it or leave it), does that in effect validate the debt and validate the fact that I owe this money? If we cannot settle, and this ends up going to court, will the fact that at one point in the process I offered to pay them a sum of money to settle the account hurt me and will they use this as evidence that I in fact owe all this money?
Any tips or answers to my problem will be appreciated. Thank you.
The debit is relatively new… it is credit card debt and I defaulted in April or May I believe….
I would assume offering to pay validates that you owe the the debt. I would just try to settle it without a fight. Going to court will only mean that you will have to pay more in the end.
Some collection companies will not settle for less either. I don’t know about the one you are dealing with, but some of the ones I have dealt with want the full amount or they will take you to court.
My husband had to go to court for one and they added more money, plus annual interest.
Just something to think about.
Best of luck!
August 7th, 2010 at 4:41 amYes, if you try to iron out a deal, that basically is seen as you saying, "I know I owe this money, I will pay you this much"…
At this point, just have them validate the debt. How old is this debt? Is it past the statute of limitations?
Also any *offer* you make or if they accept should be in writing, not verbal and you should never send them a check or give them banking info over the phone. Send a money order.
August 7th, 2010 at 4:41 amYes I believe it will so don’t discuss it with them. If they continue to harass you, that is their job. How ever if you can find the the correct place to call, you can stop all harassing phone calls.or perhaps just do not speak with them at all. When they call just act as if you cannot hear anyone on the other end. Like Hello………..Hellooo…………HeLLo and as you are hanging up say in a loud enough voice for them to hear. Damn it, that’s another person that won’t answer me!!
August 7th, 2010 at 4:41 amPer your update, Send them a letter via Certified Mail + Return Receipt (NOT regular mail) stating:
Per the Fair Debt Collection Practices Act, I am requesting validation of your claim, to include the following a copy of the original signed contract with my signature for this alleged debt. I cannot respond to your claim until validation in the form of copy of the original signed contract with my signature has been submitted. Receipt of this letter is being officially timestamped by the USPS.
FYI: from a quick Google search, this appears to be a super nasty firm…be careful when dealing with them. Read the info at the following link very carefully:
http://www.budhibbs.com/collectorpages/cohen_slamowitz_cmts.htm
Other links:
http://cohenslamowitz.com/
http://www.consumeraffairs.com/legal/ny_cohen_slamowitz.html
If you settle, get all terms in writing BEFORE you pay…which states that the account will be "Paid in Full." Once you get that, then pay. Keep documentation in your perm. records. Don’t give them your checking account numbers. Assume that any promise that is not back up in writing is a lie. Avoid getting on any sort of monthly payment plan.
August 7th, 2010 at 4:41 amThey aren’t really asking you to validate the debt, they are giving you 30 days to dispute it. As far as they are concerned, any debt that crosses their desk is valid and fair game for whatever collection tactics they need to use. It’s up to you to dispute it to prevent it from going to court. Using the word ‘validate’ is a way to keep you from asking for proof. You have a right to request copies of the original debt. They don’t want you to do that, so they ask you to ‘validate’. When you don’t validate, you don’t dispute, either. It’s a trick they use.
If you really owe the money (no fraud, no identity theft, no wrong person, etc), then you automatically validate the debt by not disputing it.
Your debt was sold to a third-party collection agent for pennies on the dollar(usually about 5 cents). If you owed someone $1.00, your debt was bought for 5 cents. You should never offer to settle for more than half of the original debt. If your original debt was $1.00, you should offer 25 cents and settle for 50 cents, at most. The company that you really owe the money to got 5 cents. The collection company will get 45 cents. That’s a HUGE profit for them and a huge savings for you.
If you don’t really owe the money, then never settle. Fight them in court.
EDIT: I forgot to mention. No post-dated checks, no electronic accesss to your bank account, get the deal in writing before you send them a dime. My wife had a credit card that went overdue when she was in the hospital, so I quit paying them for a few months. Her original debt was $440. That debt ballooned to over a thousand dollars with legal fees, late fees, over the limit fees, etc.
My wife didn’t want to be a deadbeat; she wanted to pay what she owed. When I spoke to the credit card company, they said that they can only take payments by electronic withdrawl. That meant that they could take over a thousand from my account, regardless of what the lady told me. They would have cleaned me out. I also insisted on a letter stating that if I sent them $440, then the debt was cleared. She told me that they only send those letters out once they receive payment. I told her no deal. Do it my way or sue. Sure enough, they called me back with an address to send a money order to and mailed me a letter before I sent it. We paid the original $440 and nothing more. I still have the letter and the money order stub.
August 7th, 2010 at 4:41 amIt’s standard. A collection agency has to give you this notice by law.
Don’t be intimidated because they are lawyers. Under the law, they are acting as a collection agency and subject to all the applicable laws.
I think the best is to send them a letter requesting validation. You can find formats all over the Internet. Send it some 7 to 10 days before the 30 days are up, if you need time and want to stall a bit. While the validation is being put together they can’t continue the collection process. Once they validate, then you can offer a settlement if you can. Don’t offer a settlement in the same letter since this would be contradictory. In my experience, I always sent a validation letter even when I’m sure the debt is mine because I want them to validate the exact amount they are claiming down to the last penny. And I always asked for anything I could think of and let them worry about what is legally required.
Since Citibank is the original creditor, there is a near certainty that they can validate properly. At this point, if you don’t reach a settlement, their most likely course of action will be a lawsuit.
Make sure you send them all correspondence CERTIFIED, RETURN RECEIPT REQUESTED. This way they can’t deny getting the request for validation on time.
It’s always a good idea to google a collection agency to see what reputation they have:
http://www.google.com/#hl=en&source=hp&q=Cohen+and+Slamowitz&btnG=Google+Search&rlz=1W1GGLL_en&aq=f&aqi=&aql=&oq=&gs_rfai=&fp=8f14b87ebbb573e6
August 7th, 2010 at 4:41 amIf you offer to settle, you are in fact validating the debt. Yes as an answer to all the questions. If you plan on disputing the debt as invalid, then you will not want to contact them in any other manner than to have them prove the debt. Keep in mind, if you go to court, they will most likely win, unless you have something of substantial proof that the debt is not yours.
August 7th, 2010 at 4:41 am