Legal Question in Credit and Debt Law in Minnesota
Continued Collection Activity on a Settled Debt
A few years ago we were offered discounted settlement on several credit card debts that had been turned over to various collections agency. We were desperate to get out of debt and paid the settlement amounts. Everything seemed to be fine until we received a collections letter last year on one of the debts we paid. After looking closely at the amount, we realized that it was the balance of the total amount owed (plus interest) on a settlement offer. We sent a copy of the settlement offer & cancelled check and said we were not responsible for the remainder of the total balance. We got no response but we continue to get letters from different collections agencies attempting to collect on the debt we thought was paid off.
We hope to get prequalified for a mortgage loan, but worry that this collection activity will have a negative impact on our chances of preapproval. Is this legal collection activity and if so, do we have any recourse against the collection agencies we settled with since their offer promised no further collection activity with the debt being considered paid? If it�s not, how can we stop it and better yet, what can we do to reverse the impact on our credit reports? Any information given is greatly appreciated.
1 Answer from Attorneys
Re: Continued Collection Activity on a Settled Debt
The collection activity you describe may be a violation of the Federal Fair Debt Collection Practices Act, subjecting the agency to damages under the law.
I would be happy to review the entire situation with you to determine your remedies.
You should be aware there is a very short statute of limitations so do not delay.
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