Hi Hank, I've sent you a pm. Thanks.

I will contact the internal collections department of the bank to confirm that they are still the principal.

Is there anything specific I should say to address the issue of accumulated interest after the debt was sent to third party collection. I want to make my offer based on the original amount of $8,500. How hard will the interest be to contest in discussing settlement?

How do I make payment without divulging any information of the bank I am currently with? I was thinking a bank draft/money order is best, no?

I am not concerned with 'right of offset' as I no longer, and don't plan to, deal with my old bank.

I will share this thread with him, but he is a real estate lawyer so I'm not sure if he'd have much to say in terms of specifics. I'm just hoping for him to look over wording and be sure there isn't anything ambiguous.

Thanks again Hank.

Ok, I'm thinking I will just have my family friend (a lawyer) look over any settlement agreement they send me to make sure all is clear and without any trickery. I would never go with a debt settler; I figure I can get enough information and deal with the collectors myself. I'd be looking for a lump sum settlement payment, and would never agree to any type of payment plan.

The letter I received only states that this new collection agency has been retained to press for the collection of my account. My bank name is listed alongside the debt amount, but they don't specifically say who they were retained by. Am I to assume that they are still collecting on behalf of the original creditor, my bank?

You mention that collection agencies that are buying debts and becoming the new principal do not have to follow the Ontario Collections Act. What do you mean exactly; are they free to ignore such things as the SOL? Should I be concerned if this new agency (possibly a debt buyer) has purchased the debt?

What I meant regarding this debt and how it appears on my report, is that it is not listed in the 'Collection Accounts' section, but only in the 'Credit Information' section of Equifax. I have yet to look at Transunion, but will this evening.

Thanks for clarifying the inquiry issue; it all makes sense now. I have never done anything since that requires a hard check, but I guess I need to start the repair process and will begin with a secured card that should push it off.

So to be clear, when I begin talking to them I should start by asking for a letter of assignment from the collection agency stating they are authorized to collect on the account for the debt owner. Then I can negotiate a settlement with them, with everything clearly stated and signed by an authorized individual. I will then wait to receive the document before ever sending any payment. Do I wait to receive the letter of assignment before negotiating?

Thanks Hank!

Yes, the debt occurred in Ontario and is regular consumer debt.

Is there a way for me to determine who actually owns this debt? The first letter I received says the are collecting on behalf of the original creditor (the bank), but given that they are now the 3rd agency trying to collect on it I suspect it may have been sold by the bank. Are they allowed to claim they are collecting on behalf of a bank, when in fact they have purchased the debt.

Also, I noticed I have a hard inquiry on my credit report from the 1st collection agency that is older than 3 years; why has it not purged from the report? Should I contact the credit bureau?

A small hesitation I have is that there is nothing under collection accounts in my report, and I fear talking to them may give them reason to access it and make changes. Can they add anything to my report, given that the debt does appear under credit information as well as being an open account.

Is it a good idea to speak with a lawyer and have him oversee any and all documents I may exchange with them if a settlement can be reached, or is that unnecessary?

I cannot thank you, and all the other who voluntarily help others on this forum, enough!

Thank you for the quick response. I remember that just before the original creditor (my bank) handed the debt to their collections department, they closed it and said it would no longer accumulate interest. How can this new collection agency be asking for nearly $4,000 more than the original debt?

I'm seriously considering trying to settle, for perhaps 30% of the original debt of $8,500 when it went into default. I just don't want to be hounded without end. What are the most important points to have them include in a settlement agreement letter/contract. Is there a template I can follow to ensure that this ends after an agreement, and they can no longer ask me for any further amounts? Ideally, I would like the collection removed from my history, even though it's set to disappear in 2 years. Is this something I can ask as part of an agreement; is the collection agency even able to do this? I understand I can provide the reporting agencies with proof of settlement, but that would not make it disappear from my report, correct?

And to be clear, there is nothing I can say or do to revive the debt as the statute limitation has passed. Would they be able to update my report with anything else, if I continued to ignore?

Would the threat of bankruptcy make them more willing to accept my 30% offer, as they wouldn't receive anything if i did, correct? Sorry for so many questions. Thank you very much for your help!

First, let me say thank you ahead of time for all the help on this forum.

My situation involves a debt of $8,500 with a date of last activity of 2009-01. I believe the debt is now with a 3rd collection agency, who have just recently begun calling. I also just received a first letter from them with the usual wording. I have never acknowledged this debt since it first went into third party collection. The curious thing is that this latest agency is now asking for $12,495! When I defaulted on this credit with the original creditor it was closed at $8,500, and that is the amount listed in my credit report. Curious thing is that it is not listed under collections, but only under credit information.

I'm not sure what to do. Do I continue to ignore this new collector? I also find it strange that the sent notice to my old address in Ottawa, when my credit file has had my new address for a few years now. Can't they simply look that up? I want to know why the amount has changed, but I don't want to acknowledge the debt. Is it best I wait it out until it drops off my report given that the Statute of 2 years has passed? Also note that this collector is in Manitoba, and I'm in Ontario.

How long can I expect them to hound me past the 6 year point? Any idea what this debt would be worth if I decided to settle?

Here is how it reads on my report:

High Credit/Credit Limit: $9,000.00

Balance: $8,500.00

Date of Last Activity: 2009-01
Status: Bad debt, collection account or unable to locate

Date Reported: 2009-01
Comments: Written-off
Account assigned to third party for collection

Thanks for all you invaluable help.