“Dear Steve,
I turned over one of my credit card debts to a debt negotiation company. I currently checked my credit report and this credit card shows status of closed. Write off of $xxxx. A credit collection company now shows up on my report as a debt purchase account – and has $xxxx – $100 listed as the balance but it doesnt show who they bought the credit debt from
I checked with my negotiation company and they show that it has now been turned over to a law firm collection agency and it shows a balance of $1000 more. The negotiation company claims that a firm that buys debt can charge interest of whatever they want.
My question is can a purchased debt be charged interest – i do not have a contract with them, i have a contract with the original credit card company who have closed the account with a $0 balance.
Am I under obligation to pay a debt purchaser since my contract is not with them and my credit company shows a $0 balance.
Can the credit card company recall a debt back if it has been sold and try to recollect that debt by turning over to a law firm?
How can i find out if the original credit card company has recalled the debt and who it has been turned over to.
Louise”
Dear Louise,
Here are the answers to your questions as I understand them to be:
- “My question is can a purchased debt be charged interest – i do not have a contract with them, i have a contract with the original credit card company who have closed the account with a $0 balance.”
If the debt buyer purchased your debt it should be in accordance with the terms of the original contact you signed.
- “Am I under obligation to pay a debt purchaser since my contract is not with them and my credit company shows a $0 balance.”
The debt buyer will allege they bought your contract and are now the owner of that agreement and debt due.
- “Can the credit card company recall a debt back if it has been sold and try to recollect that debt by turning over to a law firm?”
Once a credit card company sells a debt they are done with it.
- “How can i find out if the original credit card company has recalled the debt and who it has been turned over to.”
The best thing to do would be to pull a consolidated credit report and see who is reporting the debt. The credit report will contain contact information.
It doesn’t really seem there is any doubt that you incurred the debt, just on how to pay it back. is that correct?
If you have any doubts or concerns you can contact an attorney licensed in your state to provide you with legal help in this matter.
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My issue is with the amount of the debt and who the actual owner of the debt is. This debt has been sold and bought three times and has never had any charges added to the original charge-off amount. All three of my credit reports show the original creditor with a $0 balance and status of sold to Arista. But Palisades is shown as the owner of the debt. My debt settlement company, Legal Helpers Debt Resolution, told me that the debt was recalled by the original creditor and transferred to a law firm. The law firm will settle at 50% of what they say the balance is – I can’t afford that, but I can afford 50% of the original charge off amount. My contract with the debt settlement company says I will get my 15% fee, if they don’t settle my debt at 65% of the current face value – by “current” I called LHDR at least 3 times to clarify “current” and all times they told me it was the current value when I signed the contract. Now they are saying “current value” is the “current value” of whoever owns the loan.
I thought that if Loan was bought by someone –they are requited, if I request, to prove how they come up with the balance – and show what contract states that. I don’t think they have any paperwork on showing the detail of the debt since it has been bought and sold so many times.
My question – how can I find out the actual amount of the debt when it was originally sold and what the terms of the sale were – if they are allowed to charge interest if the original creditor has washed their hands off the debt. Also how can I find out who legally actually owns the debt and what proof do they need to provide me to show that they are indeed the new owner of the debt – am I entitled to the paper trail of purchases of the debt.