Re: Example of a $1 contract

Posted by SteveX (199.245.32.11) on January 20, 2004 at 17:05:40:

In Reply to: Re: Example of a $1 contract posted by computerguy on January 20, 2004 at 15:27:43:

Cool, I'll wait for your reply tomorrow because this fascinates me. & I think I see what you mean now....let me see if I have this straight…please correct me where I'm wrong.

"What you do is set up a legal Novation"

- not sure what this is so I did a quick lookup on Merriam Webster on line dictionary...

Main Entry: no·va·tion
Pronunciation: nO-'vA-sh&n
Function: noun
Etymology: Late Latin novation-, novatio renewal, legal novation, from Latin novare to make new, from novus
Date: 1682
: the substitution of a new legal obligation for an old one

Ok, So you're saying set up a new legal contract with the CA...I'm assuming you mean after the validate the debt & prove a legal right to collect & while the debt is still within SOL, correct? Actually you must mean this or else this doesn't make any legal sense...if the CA can't show a legal right to collect why would I give them one??

"To set up a novation you must accept the full dollar value of the debt"

....ok, do you mean the amount the OC charged off, the new amount the CA says you owe them including all their unknown fees & legally questionable interest(then again they might be reporting the amount of your charge off, I had one do that) or the pennies on the dollar amount that the CA bought the debt for? Full dollar value is a very subjective term, my idea of what I owe & the CAs idea could be very different..

"Once you accept the debt you offer a monthly payment schedule to pay off the debt. Any amount will legally bind a contract once accepted by the creditor $1 or more ...in the court case I used $50 ... it was a debt of over $20,000."

....ok, say the CA legally proves I owe them the money & it's within SOL & we agree on the full dollar value of this debt...& say I don't want to explore or have already explored all my other options like filing BK or something (if I owed 20K I would seriously look into BK or some other legal remedy, yeah it a short term kick in the a$$ but I know of people who it helped get their finances in order, but again I'm a frequent reader of this board but not a frequent poster & don't know as much as most here so please nobody take what I say here as law) & set up a payment thing like your example...$50 a month for a $20K debt...if the CA doesn't pull any tricks & charge interest or fees I'm looking at paying off my debt in a little over 33 years....all the while my new "legal novation" with the CA allows them to report this collection account on my credit reports the whole time & then for another 7 years after payoff (unless there is a stipulation in this "legal novation" that says they stop reporting, please advise!)...around 40 years total of a lower fico score & higher interest rates...& I gave them the legal right to do it with the novation I sent them....is this correct? Seriously, I don't know, I'm just going on my understanding of the FCRA & FDCPA but if this gets me around all that let me know.

My apologies if you've explained my questions in another post or if I'm misunderstanding your "$1 contract system" but I just don't understand how this helps me or someone else in debt...or even how a CA would benefit, they all want their money over the phone right away when they call, why would any of them, especially the bottom feeders, agree to a payment plan like the 33 year one in your example...I mean, does this "legal novation" you want people to send have any stipulation that says that after I agree that this debt is mine & set up this payment plan that they can't just change their minds & sue me a few months/years down the road? & I mean an iron tight one because we all know how CAs lie & go back on agreements. Does this $1 contact have any legal guarantees for me? I understand your "What you don't want to do is, miss a payment and never be late because then you have dishonored the contract you had established" statement but if I'm doing this for 33 years, or say I double up my payments & get this puppy paid off in 16 and a half years, I may be late on one or two....stuff happens, you know? Is the "legal novation" void? Do they hit me with a late fee? Do I have to send all my payments CRRR to make sure the CA doesn't just say I was late & terminate the whole thing? I mean the extra $4-$5 bucks a month for the CRRR will add up over 30 years & that's just at today's prices…it could cost $10 to CRRR a letter in 2034 …..

Anyway, sorry for the long reply but thank you for fielding my questions….looking forward to your answers.

Talk to you tomorrow!

Follow Ups:

Post a Followup