Dealing with a collection agency (car)

Easto · Post by **Easto** » Mon Jun 08, 2009 3:24 pm

Here are the facts. (not my problem. I'm trying to help a friend)

1. Purchased a used 2001 in 2002 for $14,000
2. 2 years later stopped making payments.
3. Repossed 3 months latter
4. Lost/Avoided contact with agency.

The agency has located this person and says that $10,000 (approx) is due. They are saying since a contract was signed that this means the balance must be paid. It would be my belief that after the repossesion the car was sold in order to offset the balance that was due. I would also think that this would reduce the balance considerably.

When talking to the collection agency my friend to them they do not have that kind of money. A few minutes later the guy came back on the phone and told them that they would accept $8,000. Obviously we have a lot of room to work with here.

What papers and/or information should I collect and what paperwork do I have a right to examine from the collection agency in order to prove any validity in this matter?

BTW, this is happening in the state of California.

YARDofSTUF · Post by **YARDofSTUF** » Mon Jun 08, 2009 5:47 pm

I believe the common line of thought is:

The Collection agency bought the debt for a small price, so negociate for less than half the bill and to make sure, in writing, that do something about the effect it has on your credit score. I think TonyT has mentioned this before.

CiscoKid · Post by **CiscoKid** » Mon Jun 08, 2009 5:52 pm

Contact the finance company, the collecction agency is full of crap. State of California says you are only liable for the difference between auction price minus repair costs, if any, and the outstanding debt

TonyT · Post by **TonyT** » Mon Jun 08, 2009 8:07 pm

Read this first:
http://ag.ca.gov/consumers/general/coll ... cies10.php

RoundEye · Post by **RoundEye** » Mon Jun 08, 2009 8:21 pm

I thought you only had to pay the difference of what the car was worth and what it finally sold for. I have no clue since I never had a car repossessed and I think it varies from state to state.

Here’s a quick little story that might bring a smile to your face, it did when I first heard it. When I was younger there was a guy I knew that realized he couldn’t afford the note, about a month after he bought the car (small pick-up truck).

So he decided he’d make it look like it was stolen. He brought it to the spillway (rural area) and burned it. Idiot didn’t realize he was still upside-down on the note and was responsible for the difference. Well since it was burned it had zero value and he had to pay the note for a truck he could no longer drive. That was about 20 years ago, I wonder if that clown ever paid off that truck.

Easto · Post by **Easto** » Tue Jun 09, 2009 12:03 am

Thanks for all the info and help.

What's funny is this guy at the collection agency wrote and told them they owe $10,000. Then after 1 phone call it's already down to $8,000. I'm going to look into the facts of the loan and call the guy in the morning.

ARS · Post by **ARS** » Tue Jun 09, 2009 12:56 am

Correct me if I am wrong but I thought collection agencies basically pays off your debt then comes after you seeking the payment. They can sue you for the remaining balanced that the agency paid for or they can drop it if it is not worth it...?

I unno ;x lol

RoundEye · Post by **RoundEye** » Tue Jun 09, 2009 1:40 am

I could be wrong on this too, but the collection agency can’t sue you for more then the balance of the loan. They often pay less for the loan that’s why they so often try to cut deals. As long as they collect more on the deal then what they paid for the loan they are still ahead of the game.

blebs · Post by **blebs** » Tue Jun 09, 2009 6:58 am

Yes, they buy the debt dirt cheap. They probably only paid $2000 for it.

Post by **YeOldeStonecat** » Tue Jun 09, 2009 7:21 am

RoundEye wrote:I could be wrong on this too, but the collection agency can’t sue you for more then the balance of the loan. They often pay less for the loan that’s why they so often try to cut deals. As long as they collect more on the deal then what they paid for the loan they are still ahead of the game.

You're not wrong..that's the game. Whoever originally gave the loan passes the job to the collection agency, which pays them a fraction of what's actually due. They figure it's better to re-coop something rather than take a total loss.

The company that does the actual repo also gets a slice of that pie. The car (or boat or RV or whatever) is repo'd, they get a piece of the action for the repo work itself...and then it goes to the wholesale auctions to re-coop even more monies for the load agency. Whoever takes it to these wholesale auctions and sells it (usually the repo place) gets another % of the sale for that part.

There's a lot of money being made at these levels.

Easto · Post by **Easto** » Tue Jun 09, 2009 12:10 pm

Thanks for all the information, everyone. I'll get back and let you know how the story unfolds once I'm able to get a bit more infro and straighten this out.