Advice on debt collections after settlement

Due to the size and complexity of the collections apparatus used by most large banks in the United States, the situation you describe, in which an account the consumer previously paid suddenly pops up to haunt them a few years late, in a quite common occurrence.

Thankfully, the law is on your side in this situation. In addition, banks are generally aware of this problem, and therefore tend to concede the fact that the account was settled with sufficient pressure from the consumer. From my experience working with similar issues in the past, resolving these problems with the banks requires a lot of pressure from the consumer, as the banks would rather ignore the issue and continue their standard collection efforts. While I do not think that banks intentionally keep settled accounts open to try to collect more money, in those cases where accounts are accidentally left open, many collection agencies have found that by undermining the consumer?s confidence in the negotiated settlement, they can often convince consumers to pay off the same account twice. For this reason, I encourage you to conduct all correspondence regarding this account in writing; this will this prevent heated conversations with collectors that are rarely of any benefit, and will provide you with a written record of all exchanges with the creditor in case the creditor files a lawsuit against you to try to collect the debt.

As I mentioned previously, the law is on your side in this situation, regardless of what the creditor may have stated. The agreement that your representative, the settlement firm, negotiated with Bank of America?s attorneys represents a legally binding contract. Assuming the settlement firm made payment as required under the terms of the agreement, and it sounds like they did from the information in your question, then you have performed as required by the contract; therefore, Bank of America is obligated to honor its agreement to forgive the remaining balance of your account.

While the lack of documentation, such as a copy of the check used to pay the settlement, will likely make proving the settlement more difficult, I think that you have sufficient evidence to substantiate the fact that the account was settled. You mention in your question that the representative at Bank of America with whom you have been working could not provide you with information about the date or amount of the last payment Bank of America received on this account. You should request this information in writing from the bank, asking that they send you a statement of your account showing the date and amount of the last payment credited to your account. Assuming that the date and the amount of the last payment on the account match the settlement amount and due date appearing on the settlement offer letter you have, this should be sufficient documentation to show that the account was settled. You will need to forward this documentation to the law firm currently handling your account as proof that the account was previously settled. The law firm should be willing to stop collection activity on the account and report to Bank of America that the account was settled. However, from my experience in working with consumers on similar issues, you will need to keep the pressure on the law firm and follow up regularly until they agree that the account is settled. You should not take no for an answer unless the creditor can provide definitive proof that the settlement terms were not met by you or your settlement agency.

Bank of America should have no problem providing you with the full payment history of your account. But if the bank cannot or will not provide the information regarding the date and amount of your last payment (the settlement payment), you may want to pull a copy of your credit report to check the balance and the date of last payment appearing on your report (also, there is a chance that one of your credit reports will show the account listing as "settled" or "settled in full" as a result of your account being settled). The date of last payment should correspond to the payment due date on the settlement agreement negotiated by your debt settlement firm. It is likely that the creditor simply applied the settlement payment to the account balance, so the current balance on your credit report should roughly equal the balance listed on your settlement letter, less the settlement amount you paid to resolve the account, though the balance may have increased over the past year due to accrued interest. Even if the balance does not exactly match the old balance minus the settlement payment, if the date of last payment corresponds with the settlement due date listed on the agreement letter, you should have enough documentation to present a strong case to the creditor and its attorneys.

In regard to the account number in question being different from your original Bank of America account number, I am not at all surprised by this fact. Bank of America recently purchased the credit card portfolio of MBNA Bank and consolidated the credit card operations of the two companies. When they did this, Bank of America changed many of its old account numbers. This has been a widespread problem for credit counselors and debt resolution firms, as they must cross-check account numbers before making payments for their clients. However, my friends in the debt resolution industry have reported that, by calling Bank of America directly, they have been able to confirm that the old account corresponds to the new account number. If you contact Bank of America and are able to confirm that the new account number represents the same account that you previously settled, you should ask for a written statement from the bank regarding the change of the account number. If the bank representative will only provide verbal confirmation, you may want to record the telephone call, though you will need to disclose the fact that you are recording the call to make sure you are not violating any laws.

Once you have confirmed that the new account number corresponds to the same account that your settlement agency resolved, and obtained documentation regarding the date and amount of the last payment made on the account, you should send all of this information to the law firm handling the account. You should also include a letter explaining the fact that this account was previously settled and that the firm must cease all collection activity and report to Bank of America that the account was settled. You can also send a copy of your letter to Bank of America directly. A good bit of follow up may be required on your part to make the creditor understand that you are not going to give in and pay them more money. In the end, the creditor should be willing to close the account and report a zero balance to the credit bureaus. However, if the creditor refuses to do so, you may want to consult with an attorney in your area to discuss the legal recourse available to you to resolve this account.

I wish you the best of luck in solving your problems with this creditor, and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.Bills.com