Trying to Help My Brother

Here is the link to the Texas Attorney General regarding debt: http://www.oag.state.tx.us/AG_Publications/txts/debt.shtml

the worst is put a lean on his house. which means when he sells it they will automatically take the money at the time of sale. we are going through this, but we are claiming bankruptsy. And usually you can make monthly payment, even to law firm?? Depends on how bad they want the money. if you have any other questions feel free to e mail me ____@____.com

Can he ask the collection department (or who whoever they are) to split the payments into two or three? They will probably insist that he give them his bank account info to have it set up on an automatic draft. The same thing happened to me but for a larger amount and that is what I did. They should be willing to do that.

By the way, those places LOVE to call themselves "law firms" to scare people but they are just a collection agency.

Everyone mentioned that they cannot do anything but put a judgment on the house, which is correct. But it will not only effect him if the house sells but also if he decides to take a mortgage out on his house. (Home improvments, home equity loan, etc..) The judgment will effect his tier grade in the home loan process, and they will make him pay it off with funds from the loan but that is all. I would just be prepared to include that in the sell of the house or if he ever gets a loan against his home. Other than that don't sweat it there is nothing they can do except call and harass you, and make a judgment.

Debt collectors will work with him if he's willing. Lump sum shouldn't be the only form of repayment. However, if he's being belligerent on the phone with them, he won't have much to bargain with. I have a couple friends who work on the other end of that phone and have told some stories. They genuinely want to help the person resolve the debt problem, but they don't deal well with jerks. Maybe he should call back and try being nice and apologetic and let them know he'd really like to resolve the situation out of court. Since he can't do a lump sum, maybe he could offer what he CAN do -- 6 monthly payments or something. $647 is small potatoes and not worth going to court over. There are people with thousands of dollars in debt who are able to work things out amicably.

C.,

I can tell you that if it is a credit card, there isn't much they can do by filing suit. Once they send it to a law firm and file a collection account with the credit bureau's, his credit is pretty much shot on that one account. Paying it isn't going to help much in terms of how other creiditors will see it. He does not have to pay everything in a lump payment. He can make monthly installments. I would advise him to offer that first (in writing to them via certified mail). If they don't want to help him that way, then he should just forget about it. The only problem will be if he tries to buy or sell a home, the mortgage company will make sure those collection accounts are paid before they can do anything. As far as a lawsuit goes, he doesn't really have anything to fear. It will just be his credit (which if over a year old already is already messed up on this account) that will suffer. After five or six years it will fall off of his file and be ok.

WOW you have plenty of great advice!
A few things that have not been mentioned though.....

Once his credit is "ruined" have him order free credit reports from Equifax and Experian. You can get free credit reports for applying to a line of credit that you know you will get turned down for. Getting turned down for credit automatically gives you the option of ordering free credit reports from the major credit reporting agencies.
Then have him go through the reports and dispute every negative item on them even if they are legitimate.
The collecting agencies only have a short time (I think its 30 days) to respond to a dispute claim. If they don't answer the claim in time it gets removed for a short period of time (six months or one year? it's been so long that I can't remember exactly). This will give him a window to re-apply for credit with a cleaner credit report.
Then have him do this once a year for the rest of his life. (It might be hard to convince him it's worth it).
It's really something everyone should do along with yearly taxes ect.

Lastly, some personal advice. Don't give them the money to pay it off. It's harder to stop helping out with money once you start. They will seek "help" from you every time something like this comes up. It will strain your relationship and eventually end it.
Advice and genuine concern are free. But don't treat them like children and attempt to take control of the situation.
If you do give them a gift of money make sure that is exactly what it is. Don't attach any strings such as "you have to use this money to pay off debt" or tell them they are indebted to you. They are mature adults and should be treated as if they can make their own decisions. They can become dependant upon you if you help them. Or worse, they resent the gift as you trying to control their life.
Then don't complain to others (behind their back) that they are stupid when they spend the money on something else. Remember it was a gift; choosing how to spend it is their right.
I have been on both ends of this situation (the helper and the debtor) and both ends are tricky unless you force yourself to follow some rules and stick with them. Always have faith that your friend/relative ect. can take care of themselves (this goes for adult sons and daughters too).
RPocai

If your brother lives in Texas he is in no threat of losing his home or car. However, his credit can be affected and they can get a judgement against him. This means that if he keeps a sum of more than that amount in his bank account, they can take it from his account. Another thing is that it will stay on his credit for so many years (7) before he can have it removed. Here is the kick, another collection agency may buy the loan and start trying to collect on the debt and if they do, then they too can list it as an unpaid debt with credit agencies, therefore adding another 7 years. This can go for a very long time until years from now when he tries to have it removed, whoever has the debt will have to provide documentation to support the collection, which may be difficult to do.

Should he try to buy another house later down the road and this is still outstanding, it will have to be paid to pass credit check - depending on the loan. It may also prevent him from getting other credit cards and various credit lines.

If he were to make payments, even if it is only $20.00 per month, and they accept them, then a suit will not hold water because they have accepted payments (doubtful they will attempt this as it is costly). They can still list him as pay slow, but will have to show the account closed and will have to continue accepting the payments and cannot sue, as they have accepted the funds as payment. Many collection agencies use scare tactics and depend on ignorance to help them collect these debts. It is easier to try to make arrangements and if they say no, then tell them this is the best I can do.. Chances are they will take the arrangement. If not, I would still send a check monthly to see if they at anytime accept the payment. Tell him to document everything and all of his attempts to negotiate, as he may never know if it will be needed.

They won't sue. They can threaten to, but they won't. What he needs to do is send them a 'Cease & Desist' letter (by certified mail) and that will stop the harrassment. That basically fires the collection agency (or whoever the account is now with) and hopefully doing it once will kick it back to the original creditor. He is ONLY obligated to pay the original creditor. You can fire any and all collection agencys and he should the second he is contacted by them. Act nice on the phone, get a persons name and their physical mailing address. Then you slam them with the letter and they are basically cut off. Once it's back to the original creditor, sometimes they will settle for a smaller amount or he can work on making payment arrangements. If he chooses not to pay them, it can and will affect his credit report and it will stay on there longer than the 7 years (or the number of years people always think it will stay on). The person was correct in stating that it will jump from agency to agency and when it jumps to a new one, it appears to be a new debt...even if it's 13 years old. I speak from experience.

http://www.budhibbs.com/

This is an old friend. He has answered a call, to champion the financially challenged. Please go to his web site and read his book, the download is free, really!

In short your brother's debt is now owned by a collection agency. Go to buds web site and get a Crease and Desist letter. Mail it ASAP.

The same Law that allow corporations to sell a debt to these vultures. Allows you to refuse to do business with the debt collector. Too cool!

The Bad Debt will fall off of his credit report 7 year from the last date of activity. The last time you speak to, make a payment to, anything. So the debt is bad at this point, no matter what you do. However if you continue to make payments, and speak with the vultures. Then, ever time you do, that is activity, get it.

Bud calls it "walking the debt". Stop beating a dead horse, let it go. Walk away.

If you ever speak with Bud, be sure to tell his P. said, Hello!

I noticed no one else has mentioned garnishment. I'm not sure what the laws are here, but companies can take you to small claims court and get a judgement to garnesh wages. By Law the employer has to notify you that your paycheck will be garneshed untill the debt is paid off. You don't even get notification that there is a court date you just get a letter stating there already has been a judgment filed against you. I have worked in collections and they will work with you usually if you keep your promises and don't scream and yell, it was a very stressfull job and so is having debt. Those of us who have been in his situation are understanding, but not everyone is. Anything is better than nothing. If he calls and doesn't get the results he wants from that person I would request to speak to a supervisor (sometimes that helps) as long as he is polite about it. It is their job to help you. Companies only hold debt for a certain amount of time 'till they sell (every company is different) Hope this helps!

Honestly they can't do anything. Just the lien on the house but it wouldn't affect him until he decided to sell the house. I'll be perfectly honest with you...these "law firms" are mostly just glorified collection agencies and probably won't take him to court. They will just resell the debt to another so called law firm!
Now with that said, I would encourage your brother to work out a deal of some sort, because as long as he's paying on it even in a very small incriment they can't even put a lien on his property. And really your brother has the upper hand, he might not get the settlement offer but they have to accept payment. If they refuse payment then the onus is on them and not your brother.

Well just ask them to split it into the smallest payment they can or tell them how much a month you can afford. As long as you send in something they cant come after you..they still could pentalize and add on late charges and such but they just call and send the demanding "lawyer" letters to scare you so you will hurry up and pay them back...they are just being bullies so I wouldnt worry too much. Good luck with all this.

Debt collectors always threaten they will sue... even if a lawyer sends the debtor a letter... they won't sue. Some lawyers actually get paid just to send out letters of threat...

Suing would cost them a few thousand dollars... and for what?? $647 dollars? They are not stupid. They use the scare tactic and sometimes actually get results. They won't sue though...

Your brother can either pay or not pay... sure, it will be a hit on his credit report, but a small one... no biggie...

I really don't know for sure. I have a credit card debt but it is over $2000 just slightly. I got to a point where I could not pay and it grew. They did not try to sue me, but would call and speak in a threatening tone and demanding I pay the entire amount immediately as it was sold to a collection agency. I stopped answering the phone and did look into bankrupcy but laws are different now. Finally they realized they were not getting their money and are allowing me to pay it out in $40 payments with no interest. I don't know if that helps or not, but that is what happened to me.

J.