Debt Collection-am I Being Scammed?

Updated on August 25, 2008
K.L. asks from Lampe, MO
10 answers

I will try to make this short. My husband divorced his first wife in 1997. They owned a home together that they purchased in 1995. They were advised by their attornies to let the bank repossess the home as opposed to selling, or dividing property, so that is exactly what they did. Fast forward-my husband and I have been married for 5 years. During that time we have received loans for vehicles, student loans, my husband even got a personal loan from the bank to buy my engagement ring and various other credit related ventures. Earlier this year we purchased our first home together. Prior to applying for financing we got copies of our credit reports. Between the two of us we had one derogatory mark that had to do with a late credit card payment. Needless to say we qualified for the lowest interest rate possible for our new home and had no issues or troubles getting financed. I'm telling you all this so you will understand my surprise at the phone call I received this afternoon. It was a debt collector representing a mortgage company claiming that my husband owes them (tens of thousands) from a loan taken out in 1995. They gave me his name, social security number and even the name of his ex-wife. So, they obviously have the right person. What I don't understand is if the home was repossessed by the bank should he still owe so much money? And, would this debt not show up on his credit report and why now, 13 years later? This is the first time I have EVER heard of or from this agency. No letters, no messages, no prior phone calls, nothing. Is it possible that this is a scam? Someone has gotten their hands on our personal info and is trying to make a quick buck (or several quick bucks!)? How do I find out if this is legitimate? Has this ever happened to anyone? I do have the name, call back number and even extention of the person who called today and it is a true number and I get the recording that matches the name he gave me. I have no idea how to proceed with this, please help!

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So What Happened?

Wow! I am so thankful for everyone that took time out to clue me in! I had no idea about any of this stuff and have spent much time online researching this particular company and the laws. This is a real company, but holy cow, the complaints are rampant! Turns out they are junk debt buyers, this debt (if even valid) is way past the statute of limitations. The last person to call me-yes, calls EVERY day since this post-even admitted it was past the statute of limitations but that won't stop them from calling! I have my husband working on the request for validation and cease and desist letter right now. I found a really good template online. This is a whole new world to me-terminology I never thought I would even learn-cease and desist, validation of debt-but one thing's for sure, I am not a sucker and you all empowered me with the info i needed to fight this! If you want a little light reading, check up on this company-Portfolio Recovery. Just google them and you'll be amazed at all the complaints you can find. And, heads-up, looks like anyone can fall prey to their little scam! Thanks again to all of you! If anyone wants to message me personally who has dealt with them please do so!

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answers from Tulsa on

I would contact the BBB first to see if the debt collection company is legitimate and in good standing. Then I would write a letter to the company and ask for copies of leal documents substantiating the debt. You may need an attorney to solve this problem. And as a last resort I would call the Problem Solvers at kjrh. Here's their web address:

Good luck.


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answers from Tulsa on

There is such a thing as a deficiency judgment (meaning the lender files a lawsuit to recover and the court issues a judgment); however, some states have anti-deficiency laws. The deficiency is the difference between the amount owed on the mortgage at the time of foreclosure and the amount the property brought at sale. The anti-deficiency laws normally only protect mortgagors from purchase money mortgages, not for second mortgages or for property that is not used as a primary residence.

This information may or may not mean anything to you. Assuming a deficiency resulted from the mortgage foreclosure and sale of the property, basically, the person calling is probably a junk debt buyer who purchased the deficiency debt and is trying to collect. I don't know what state the mortgage was executed in or where the property was located, etc, but most likely, the debt is out of the statute of limitations. (meaning they can't do anything (like sue for the money) except send letters and call, trying to collect... until you write them and demand that they stop)

This also depends on whether they are collecting on a JUDGMENT or on just the promissory note alone. Judgments can be renewed, and if it's a judgment, it could still be within the statute of limitations... but if you've never heard anything in 13 years, it's probably just a junk debt that's been bought and the company is now trying to collect.

Get more information from the collection agency by writing them and requesting validation of the debt. Determine whether there was ever a judgment rendered by a court. Then, you may want to consult a consumer law attorney.



answers from Tulsa on

Dear K L,

3rd party debt collection companies and continue to attempt collection until the cows come home.

The bottom line is this: The original debt is over 10 years old. Too bad so sad. You do not have to pay this! It is no longer impacting you/his credit.

You have 2 choices: 1) You can make payment arrangements or 2) you can tell them to get lost.

Its up to you. But the debt is no longer a threat to your credit you well know now. Get the name and address of the collection company and send them a "Cease and Desist" letter.

Keep the letter on hand, because this company will quit contacting you (as per the letter and the law) and they will sell your so-called debt to another debt collection company. This new company will need the same letter.

If you want to pay the debt, most companies will offer a "one-time" drastically lowered balance - if the debt is paid immediately. Most of the time, you can bargain the debt down to half (or less than half) of the original balance.

Best of luck to you.



answers from Tulsa on

Hi! I am so sorry to hear about this stressful time for you. Here is my advice:
1) If your husband is still in somewhat of contact with his first wife, he should call her and ask if she has received any like phones calls. If so, the two of them need to go back to the bank and see if anything is going on with it. Since is has been so long ago, the banks would have written the accounts off and would have sent it on to a different collection agency if that is what actually happened.

2) If you husband will not communicate with the ex, then he needs to contact the bank from where the home loan originated and ask about what is going on. He should also consult with his divorce attorney as well. If something did indeed happen that was not supposed to as it was spelled out in the divorce decree, then he/she would have to explain that to your husband. The costs in attorney fees would be cheaper than paying back a debt on a home that he may not actually own.

3) Keep the information from the debt collector and it does not surprise me that there is a recorded message. It may be a scam but you still want to be sure and talk to an attorney. If it is a scam, you will need to turn that information over to the authorities. There is a division of the police department that handles scams.

Good luck!



answers from Tulsa on

I'm curious to read the answers but 13 years seems like it is beyond the statute of liability. Even bankruptcy only lasts 10 years.

I would consult a bankruptcy attorney or an attorney of some sort. Perhaps one will answer this request. I would be very cautious about a scam.

Good luck,



answers from Tulsa on

I was a mortgage loan collector a few years ago and this does sound somewhat suspicious. I cannot imagine the company where the loan originated from contacting not him first. Your husband needs to contact the company where the loan originated from to find out if the property sold at a loss, in which case they will come after him and his ex for the balance. They should be able to answer all of your questions. You might also have him contact his ex (if they are on speaking terms) to see if they have contacted her also. It may be legitimate, but like you I cannot imagine the loan originator not contacting you directly before going to a collection company. Best of luck to you



answers from Tulsa on

We had something similar happen. My husband had some financial issues before we were married. During our first year or two of marriage, we took care of everything. We've been married almost 10 years now, and 1-2 years ago, I received a call about a debt he had. They had all the right information too--social security #, prior addresses, etc. What they couldn't tell me is the origin, and why I had never heard from them before when obviously they knew how to find us, why I don't have something in writing, and why they didn't show up on his credit report. They just had a dollar amount and said he owed them money. I asked the man about the statute of limitations and he said there was no time frame on a debt. It was the strangest thing as we bought a house, various other things, his credit score was fine, and there was nothing negative any more on his report.

This company called us a couple times and then sent me a bill that just said he owed this money. The bill even said that they would take necessary steps to collect the money. I never received anything in writing as to details of the money owed as I demanded. I told them they needed to prove to us that he owed the money. Since I never heard from this place before, I wanted my husband's signatures showing he borrowed this money. Since they never provided that, I never did anything, and never heard from them again.

This is what I learned: a debt is still a debt, no matter how long...the creditor just can't get help from the courts to collect on it after the statute of limitations. There are companies out there that buy these old loans for pennies, and they try to collect on them. My guess is that when the bank took a loss on your home, they may have sold that loan to one of these companies for very little money, and that company is trying to collect.

I hope this helps a little. I'd ask someone you trust to verify what you've heard, and then you can decide what you should do.



answers from Tulsa on

I would call your state attorney general office & BBB and make sure the company that called is legitimate. It may be a case of identity theft what address are they saying? You may want to get a good attorney.



answers from Tulsa on

Your husband should contact his prior mortgage company to find out what is going on. They probably won't be able to talk to you, since your name is not on the mortgage. Meanwhile, you could check with the better business bureau to see if the business is legitimate. You could also return the call and try to get more information from the company about the nature of the debt, when exactly it arose, and why it has taken so long to be addressed. The amount of detail they could provide might give you some insight as to whether the collection company actually is legitimate.



answers from Tulsa on

There is a statue of limitations on debt. Reading from the debt cures book. "Paying debt that is old is not required of you". Every state is different but I believe Oklahoma's is 5 years. If you have a debt that was written off six years ago and there has been no activity on your credit report for the deby since then, you are probably free of that debt forever. There are scavenger debt collectors he knows your debt is too old, but he is hoping you don't. Tell them the debt is not collectable and hang up then send them a letter telling them to stop calling. Whatever you do don't admit to the debt. Hope this helps

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