Dear Melissa,

My wife and I had bought a pair of ATV’s almost 3 years ago through HSBC lending. The way the loan started was 100.00 every month, a revolving loan I believe. Well in that time we paid the balance down about 1000.00 dollars. Starting balance was 14,000.00 roughly. They were repossessed about 4 months ago and they sold at auction for around 4,400.00 dollars after which they then said we owed around 7300.00.We had no way of paying there fees interest charges penalties etc.

Now a debt collection agency or lawyer firm is threatening to garnish my wife’s wages. She works fulltime for the state of Arizona. I am an independent business owner. My question is why they want the full 12000.00 dollars, and they would not work out a payment plan so we could keep the quads at an affordable dollar amount. This sounds kind of fishy. And threatening to garnish wages could really mess things up. We own a house that has a mortgage payment of around 1731.00 a month, which is hard on the both of us. And also just bills in general. Any help? Suggestions?

Thomas L.

Dear Thomas,

After an item is repossessed and sold at auction, the original consumer then owes the deficiency.  The first thing that I would do is find out whether the bill is with a collection agency or attorney firm.  If the account is still listed with the collection agency, it will buy you some time to at least get some of the account paid down.

Most collection agents work off commission, so the higher the dollar amount paid, the higher their commission check.  If you were to come up with $12,000 immediately, they may make 10% of that.  If you send in $50, their commission is going to be a lot less.

Now since the collection agency is under no legal obligation to accept a payment plan from you, you may just have to send in money every month.  They will always accept your payment and cash your checks!  If it’s $10 or $1,000, make sure to send in a little every month.  Not only will this chip away at the debt until it’s paid off, it will also inform then that you are planning on making good on your obligation and may ward off a wage garnishment of your wife.

Do YOU have a question for Melissa? Email her at melissa@dovcocs.com.

Melissa Douros
Dovco Collection Solutions, Inc.

As the owner of Dovco Collection Solutions, Inc., Melissa Douros uses her eight years of being a collections specialists to offer advice and answer questions pertaining to debt collection.  With running her own successful collection agency, she seeks to keep debt collectors accountable for their actions and in line with the law.