November, 2016

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Collection Rep Tried to Steer Me Away from CCCS Agency! Why?

For signed up for a debt management plan through a consumer counseling agency in January 2013. For 2 years I made consistent monthly payments. In Fall 2014, my transmission went out and I still owed on the car. I did not have money for the transmission repair, so I had to find a cheap rental car from a mom-and-pop operation as alternative transportation, have my car towed and pay a money storage at a parking garage since I could not leave a inoperable vehicle parked in the city streets, and still have to pay for car note. I had to place student loans in forbearance. To make it short (too late), I was screwed.

Although I was nominally on the debt management plan for most of this year, I kept falling further behind. This Fall, I contacted the credit counseling agency regarding the possibility of establishing a new payment plan. They told me that the criteria are established by the credit card companies and made no effort to negotiate a new payment plan. This prompted me to start looking at other credit counseling agencies.

I am completing the process of signing up with another credit counseling agency. The projected payments are lower, if only because my debt is lower than when I first signed up with my original agency.

As part of the process, I needed to get updated records on the balances on the cards. I had recent statements for all creditors except American Express, which stopped sending statements after I signed up with the original payment plan. When I called to find out the exact balance, I was referred to Zwicker and Associates.

Zwicker does not own the account, but performs some of American Express’ debt collection and legal functions. I got the balance, but not without some hardball tactics to get me to pay them that night.

The representative I spoke with was very anti-consumer credit counseling agency. He said they would not work with a credit counseling agency and would only work directly with me. He questioned me as to whey I would want to pay somebody else to pay them, when I could do it directly. I told him that it would be easier on me administratively with the # of accounts and the accounts I had. Then he said their attorneys were working on my case earlier that morning and would file a suit in my state to garnish my wages if I did not pay directly through them. I had already told him I did not have money to pay the terms he was asking for, so I told him I need to “check around” to see if I could get some help from family. He gave me a deadline of 8 AM the next morning to respond back.

The conversation with the Zwicker rep was very upsetting, but I did not let him affect my plans. At this point, my only options are trying to re-establish a new debt management plan, trying to do debt settlement, or bankruptcy. I already had it in my mind that bankruptcy was a last option, but I would do it if anybody tried to come after me through the courts. After getting off the phone, I reported the balance on the AMEX account to my new credit counseling agency. They finalized and sent out proposals to the card companies the next day, which are pending. The car is still disabled, but I have miraculously paid off the car note. If the new DMP proposal is accepted, it will open up $400/month in my income and really take a lot of strain off my financial life (although I still have to be fiscally prudent).

Does anybody else have experience with such agencies like Zwicker (an agency that performs some collection functions, but does not actually own the account) trying to steer people away from credit counseling? Given that the account was still with the original creditor, I was very suspicious that Zwicker was trying to pressure me to pay through them so they would not be squeezed out of some of the money. There were so many red flags in my conversation with the rep like the next day 8 AM deadline, which I suspected was done so I would panic and pay them something, before consulting with any financial or legal advisors about my rights. Of course, the next day I learn that most courts would not issue a judgment against you if you are making monthly payments or other reasonable efforts to pay off the debts.