Thanks everyone. Your statements just further reinforce what we have been thinking.

As much as it pains me to give these people anything more than 10 cents on the dollar, she has kind of set the precedent that she CAN pay and has been paying $260/mth which was a mistake to begin with. I hadn't read enough in the online world at the time to help her with confidence so they bullied her into setting up the payment arrangements with threats. Looks like the best option is to be done with it. I will get to my old collection debt in a separate thread... thanks again !

Well, I agree with drunkbeerguy's point of view; however, Equifax, while it lists collections for 6 years from the date of last activity, with respect to settlements, they only retain it for 3 years from the date settled. Still, this poor girl has been paying the Zellers/ARO debt for years and will have an R9 almost forever if she continues on the way she's going.

On the other hand, if she settles the thing tomorrow, the delinquency should only be on her Equifax credit report for another 3 years. And if she has no other negative items, her Equifax report should be clear by then. Still, it will likely be on the TransUnion one for 6 years, as different credit bureaus may have slightly different reporting policies so long as they are consistent with consumer laws. From that point of view, it might be best to get rid of the collection agencies as soon as possible by negotiating a settlement.

Ray

Sounds like you're dealing with the Kelowna BC office of ARO. Incidently, Tara, Dave and Karen have got job add links for skip tracers and collectors right next to your post on Google.

The Manitoba Limitations of Actions Act Section 2.1 (i) has a 6 year limitation period for the debt. It's hard to predict who will sue who without a crystal ball, but ARO, while being a bunch of pathological liars like all other collection agencies, isn't one of the more agressive litigative ones. I really doubt whether they would sue your girlfriend over $900, or even $1500, especially since (1) they've shystered a lot of money from her already and (2) she can't have any significant income or assets if she's been R9 over a small bill all this time.

ARO, by their own admission, loves to sit back and monitor TransUnion credit reports (via hard inquiries) always looking to see if their target debtor has accumulated any property that they can pounce on and seize. The Kelowna Office is known for buying up all the HBC (Bay and Zellers) R9 accounts for pennies on the dollar.and sitting on them for years, if necessary. Because payments have been made on the account, the limitation period for suing has been getting renewed every time you make a payment - most of which goes to service the whopping 28.8% monthly or 32.3% per annum interest.

And so, yes, it seems that you could scarcely be getting a much worse deal. Even if they took your girlfriend to court, they would never get any court order from a judge as generous as what she's been paying, especially, if she explained her financial situation to the judge.

If it was me, I'd probably tell them to go ahead and let them sue your girlfriend. But they probably won't. Instead, they'll just threaten you by telling her they'll send over the RCMP etc etc. The usual schtick. That way, they'll have an asset they only paid a few bucks for, generating a generous income stream for them for years. It's not much better than having a pay day loan outstanding.

I can't make any sense out of the numbers you presented. How would someone have to pay $129.00 every 2 weeks on a debt that small?

In any event, if I offered Dave and the Boys over there any money at all, it would only be 200 bucks - tops! Actually, what I really would do, if I was in your girlfriend's position, is to call their bluff and let them sue me or let the SOL run out. She has nothing to lose and lots to gain by doing that. The thought of paying those miserable collection agencies anything would turn my stomach. Just my personal opinion though.

The deadlines given to you by them are absolutely and totally meaningless, just like anything else that they might tell you.

Ray

Hey Kev,

I can only tell you about my experience with negotiating a settlement, but Raymond, Angella, and Monty have much more experience than I, so I would defer to them for real advise.

My situation was that I defaulted on a vehicle loan. I owed (with interest and late payment penalties included) just over $12000, however, $8500 was the principle remaining (all numbers approx.). I was in a car accident, in which the insurance company wrote off the vehicle and gave me a $5300 cheque. Before I "sold" the vehicle to the insurance company, I called NCO (the collection agency) and offered a $4000 settlement that would be paid within 3 days. They accepted. I picked up the cheque, signed the papers and went to the bank and sent the payment within an hour.

Now, from what I have learned from the great people in these forums, which have helped with sharing their experiences and opinions.........if the account is already in R9, it can't get worse, The R9 is on your credit report for 6 years from the last payment received, NO MATTER WHAT. So, if you want to stop payments of $130/month right now instead of continuing to pay for the next 12 months, you are in fact doing yourself a favor.

If you offer a settlement for say $700 by the end of the next week, and it is accepted.....the item on the credit report will say paid in full (better than saying unpaid), and will disappear January of 2014. This also stops the harassing calls.

If you stop paying $130/month right now, the item on the credit report says unpaid, but disappears January 2014. Harassing calls continue.

If you keep paying $130/month until paid off in January of 2009, the item won't disappear until January of 2015....and losing a year of better credit. Plus, you never know when the collection company will start harassing again.

Hope this helps a bit. However, this is just my situation, and my understanding of how things really work. Again, I would defer to Raymond, Angella, and Monty for any REAL advise.

DBG.

This is a sample letter received from ARO to Collect the amount owing.

Background:

It is actually my girlfriends debt but I am trying to help her as best I can. She is already at an R9 from this one and has been making bi-weekly payments of $129 since April of '06. Orignal Debt amount was $1800 as of 5 years ago and it is still $1555 at this current date. They are only offering a settlement of $927 as long as it is received by the end of the month. My question is : Can I do better ? These people are real jerks too.

January 15, 2008

EMAIL: xxxxxxxx@yahoo.com

Subject: ZELLERS

File #: xxxxx-xxx

CDN#: xxxxxxxxxx

Balance: $ 1 560.60

Dear Sir or Madam:

We are authorized agents for ARO Group, who has purchased the above mentioned account(s).

As per our conversation, our office will accept the amount of $ 927.22 as settlement in full for the above-mentioned account(s)

We are to receive one (1) cheque, in the amount of $ 927.22 dated on or before January 18, 2008. Please make cheque payable to ARO INC, and ensure reference number XXX XXXXX-XX is written in the memo line. The cheque is to be received in our office on or before January 30, 2008, no later than 12:00 PM NOON (PST).

If our office does not receive payment for the above-mentioned account, or any payment is returned to us for any reason, this settlement agreement is null and void and payment in full is due.

If you have any questions or concerns regarding the above, please call us on our toll free number as soon as possible.

Sincerely,

Tara Genereaux

Branch Manager

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Any help would be much appreciated !