I was recently contacted by a collection agent representing an entity I owed a large sum of money to. This account has already fallen off of my credit report. (7+ years since last payment) When they called me they said it was on my credit report and like a fool I believed them and made a $55 dollar "good faith payment to secure a settlement offer". The discount was at more than 50%, so I paid the one payment. Since then, I have not been able to secure a loan to pay off the settlement, and found out the original loan is not on any of my credit reports. Am I a: liable for the original debt? (I live in NY, and the loan was made when I lived in CA). b: am I now liable to the collection service since I sent them the "good faith payment to secure a settlement offer"? any advice you all can offer would be greatly appreciated!
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Hi Tamera
Since the negative listing has already been removed from your credit report, it means that the Statute of Limitation in your state has already expired and you should not have made the payment. The $55 good faith payment you have already made has rewind your SOL and you may be required to pay back the entire amount of the debt. However, if you have received a written confirmation before paying off the $55 amount, that they agree to settle for less than half the debt amount, you need to pay the amount as agreed between you and the collection agency.
Hi Tamera
Once the Statute of Limitation of the debt is over, the creditor or the collection agency can no longer collect the debt. So before paying off any amount you should always check the credit report. These collection agencies purchase the debt at a very low rate from the original creditor and recovers the debt with interest on it from the debtors. Since you have paid after the SOL has expired, you become fully liable to repay the debt and if you do not pay it back, the collection agency can even sue you to the court and bring judgment against you to garnish your wages.
I am very sorry you are in this situation but all of the above responses are correct. You will have to repay now that you made a good faith payment. I suggest that maybe you make some kind of arrangements with this company.
These companies make their money on uninformed people. Always , always check your credit report before making any type of payments. Believe me they will call back in a few days if you say "Well so and so, I will need a few days to check my report and see what rights I have. If you call back by such and such a date I will let you know how I am going to handle this". They will call...believe me but at least you will know by checking your report if you are protected by the SOl.
You just started the statute of limitations all over again, now you will have to pay the debt.
Don't you hate that. Now over a lying collector there will be lots of debt harassment.