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It's time to play lawyer.... (If you live in the USA)
Note: The facts have been changed somewhat in the interests of discretion.
I've got a question for anyone living in the United States. I have a situation where a person entered into a credit card debt consolidation program with a private company. It's one of those "debt relief" programs where the company gets paid tons of fees every month, and THEN negotiates the credit card debt. (With no assurance as to the result.) It's a fool's game.
Prior credit card statements are relevant to a particular matter. The person claims that the credit card companies will no longer talk to them, and are unwilling to provide copies of their prior monthly statements. The say this is because they are enrolled in the consolidation program.
They have not declared bankruptcy, to my knowledge. Any debt issues are still private.
Has anyone known somebody in this situation. It seems hard to believe. Before I hit the books, I was hoping to hear of an anecdotal story.
I've got a question for anyone living in the United States. I have a situation where a person entered into a credit card debt consolidation program with a private company. It's one of those "debt relief" programs where the company gets paid tons of fees every month, and THEN negotiates the credit card debt. (With no assurance as to the result.) It's a fool's game.
Prior credit card statements are relevant to a particular matter. The person claims that the credit card companies will no longer talk to them, and are unwilling to provide copies of their prior monthly statements. The say this is because they are enrolled in the consolidation program.
They have not declared bankruptcy, to my knowledge. Any debt issues are still private.
Has anyone known somebody in this situation. It seems hard to believe. Before I hit the books, I was hoping to hear of an anecdotal story.
Comments
Having worked as a debt collector for a short stint, nothing seems illegal with that situation. It's been a while and I can't guarantee my answer, but that's what I think.
I would, however, look for illegalities in any attempts to collect the debt. I read lots of stories about people who have collectors come after them breaking the law, and they are winning suits when they fight back.
Now, even though you continue to drive the car, the dealership is doing business with Billy. You're not in the picture anymore as far as they're concerned. Legally, you're an end user. When it comes to matters of finance, however, most businesses have confidentiality rules -- some internal and some enforced by law -- to which they adhere. They are not about to release information about the loan to you, only to Billy. It's in his name now. It's his responsibility. You have nothing to do with it. You're no longer the customer.
This is most likely the attitude with which the credit company is approaching your friend's record request. Your debt has been sold to a third party (the consolidator), and the credit card issuer is no longer doing business with you. Any information about that debt is confidential between the credit card issuer and the consolidator. If you want access to that information, you would have to go to the consolidator to get it.
And that is most likely protected by both state and federal law, although I'm far from an expert in that area and have never dealt with consolidators myself.
That would make sense, though, if the consolidation company actually assumes the debt. But I just can't imagine they would take that risk.
Keep in mind that this was not a consolidation loan. It's just some shady debt relief program. The type that Attorneys General sue all of the time.
UPDATE: I think I just found my answer. Here is a quote from an article:
But debt settlement is just the opposite. Debt settlement companies, sometimes called “debt negotiation†companies, do not negotiate with a person’s creditors directly. Instead, they wait until the debts have been turned over to a collection agency and only then begin the process of negotiating for a lower repayment amount.
If the credit card company has sent the debt off to a collection firm, they've washed their hands of the debt.
But... the issue is getting statements from BEFORE the time it was sent to collection. Surely someone has to be able to give these to the person. Maybe the person was not specific enough. This is not an issue of dealing with the debt, just getting statements to show the accrual of debt.
EDIT:
Also, if the debt changed hands frequently, a request to the original creditor as well as a request to the current owner may cut the time between request for and receipt of the required documents significantly. Usually the creditor is responsible for verifying the debt (which may or may not include providing records) within (iirc) 30 days of receipt of a written request for verification. I cannot remember if that is part of the FDCPA or if that was just a State Law, though, so I do apologize if that is not accurate to your State.
Oh, and there is a key difference in the original creditor hiring a collection agency to collect on their behalf and a collection agency purchasing the debt. The individual's credit report will state who currently (w/in 3-6 months of accuracy) owns the debt.
Further, waiting until the debt is sold may actually help the consumer as the original creditor often sells the debt for pennies on the dollar, meaning that the new owner is significantly less "in the hole" for the debt and often has a lot more room to negotiate a settlement that both provides the debt collection agency with a profit and is within a budget the debtor can more easily afford. The only time this might be detrimental is if the original creditor is still compounding interests and fees to the sum of the debt. In which case, fast action is preferred over waiting for the debt to sell.