You may have just received a letter from PO Box 4115 Concord CA or you may have received a call from 6302568591 (aka 630-256-8591). This is Portfolio Recovery Associates, and they are likely trying to pursue unpaid debt from a creditor such as Synchrony Bank, Capital One, or Citibank.
The reason that Portfolio Recovery may use an unnamed envelope is that they are a debt collector, and want you to open the letter that they sent.
Portfolio Recovery Associates is one of the most LITIGIOUS debt collectors in the United States. It is imperative that you know YOUR options when dealing with them.
Many individuals are confused when they are sued by a company that they have never heard of such as Portfolio Recovery also known as Portfolio Recovery Associates (PRA). This is because it is one of the largest debt buyers in the United States. That means that Portfolio Recovery will purchase debt from a large creditor.
One of the most important questions to consider is whether the debt you carry is past the statute of limitations. And, if they were to get a judgment against you, are they able to garnish your wages.
See the following debt statutes and garnishment calculator to help you estimate that for your specific situation in your specific state. The free calculator should take 1-3 minutes.
Portfolio often sues you to recover the money, so it’s actually highly likely that this is the first time you’ve heard of Portfolio Recovery. In each situation, it's vitally important to know your rights as an individual. You also should understand your options, which is why we built the free debt relief options calculator below to help. The calculator is based on your zip code, and the information is personalized to your financial situation.
As stated above, you may have received a collection letter and are asking yourself, “Who is Portfolio Recovery?” Portfolio Recovery Associates LLC is one of the largest debt recovery companies in the United States.
We review many lawsuit cases each year where Portfolio Recovery Associates will sue an individual for unpaid debt. Based on our internal data, this debt buyer is one of the most litigious of the creditors. That is the reason we are writing this article to provide insights as to who Portfolio Recovery Associates is and provide insight if you have been sued or if you just received a letter that it is now handling your debt.
Many creditors will set a limit as to how much they will sue for. Portfolio Recovery does not seem to set a high limit for when it will sue. In fact, we have seen Portfolio Recovery sue for only a few hundred dollars.
As such, it’s important to understand how this firm works, so that you can be prepared.
Portfolio Recovery (PRA Group) is a publicly-traded acquirer for nonperforming debt. According to an FTC report, PRA was among the top five debt buyers in the United States. Portfolio Recovery is somewhat unique in their approach as they do also purchase student loans and medical debt.
As such, if Portfolio Recovery believes you have the means to pay but are holding back, the company may not settle with you for some time. There may be an exception to this rule, especially if the debt is close to the statute of limitations in your state.
Unlike other larger debt buyers, Portfolio Recovery appears to have its own collection unit in the house. That means that it may purchase and services the debt. The company is in the habit of settling the debt for less than owed, but Portfolio does appear to use more sophisticated techniques to determine at what percentage the company will settle for. If you would like to speak with a representative at Portfolio Recovery, you can contact them directly at 800-772-1413.
There is a lot of information in this article, but we wanted to build the debt statutes and garnishment calculator to first show you the statutes in your state and the garnishment laws that Portfolio is required to abide by. Next, we would like to help you determine what is best based on YOUR specific situation and our experience with Portfolio Recovery. We also like seeing things rather than reading things, so hopefully, this helps.
If you have not yet been sued by Portfolio Recovery Associates, you may also consider reading our hypothesis on how creditors determine whether to sue or how to settle credit card debt when a lawsuit has been filed because you often have options to settle the debt before going to court.
If you have been sued, you may also consider reading our article covering how to respond to a Portfolio Recovery lawsuit.
Why does some Portfolio Recovery litigate for some debt while attempting to serve others? Our hypothesis is that Portfolio Recovery has a multi-pronged strategy when deciding whether to sue:
The first thing I tell folks when they’ve been sued by Portfolio Recovery or by any creditor is that this happens often and that we will get through this together. As Portfolio Recovery is one of the more litigious creditors that we come across, we also know that they will work with you, especially if you’ve experienced extreme hardship.
A debt collection lawsuit generally begins when the creditor or law firm representing the creditor files a complaint with the state civil court and lists you as the defendant. The complaint provides the reason why the creditor is suing you and what the creditors want to obtain in payment. Oftentimes this includes the money you owe plus interest, potentially late fees, attorney fees, and any court costs.
The attorney representing the creditor or the creditor themselves will often notify you of the lawsuit by serving your papers. This means that a copy of the complaint and court summons is delivered to you. Below is the debt options calculator as well for your personalized insights.
If you do not respond, the creditor or law firm will request a default judgment. With a default judgment, the creditor may do the following based on the state that you live:
This is why it’s important to respond to the summons. Many creditors (including Portfolio Recovery) will work with legitimate debt settlement firms and consumers when suits have been filed.
When this happens you will want to gather as much information on the debt as possible. Oftentimes, as with Portfolio Recovery, the entity suing you is not the original creditor as we stated earlier.
Review your own records and determine:
There are other options you can do when Portfolio Recovery sues you, in addition to responding to the lawsuit.
The first thing to do when you get sued by Portfolio Recovery is to determine whether you owe the debt. I know this sounds trivial, but it may take some time to do so, especially if the debt is old.
When you owe the debt, there are four main avenues that you can take, and we can use our calculator to help you distinguish which options are most relevant. So, let's look at your options one by one:
This option is often much easier said than done. Most people do not have thousands of dollars available to easily pay the debt in full, so this tends to not be a viable option for most folks. In addition, there may be much damage already done to the credit score and credit report at this point.
If your debt is small, you have the cash, and this is one of the only debts you have, you may be able to pay in full, but this is often not realistic for most people.
Settling the debt before judgment is one of the most common things to do in a situation where you have been sued. There are three options that you can consider and each has its own pros and cons.
You will want to take a look at your entire debt picture before settling your account. If you have a lot of outstanding unpaid debt, will another creditor follow suit if you settle this debt? For this, I would advise speaking with an expert to review your credit report to see whether there are other litigious creditors to be concerned about. We offer this service for free, but many other players should be able to offer this as well if you already have someone in mind. Now, let's go into your options:
If you go with either of the two bottom options, it's important to know the fees. The best fees are either a percentage of debt saved (incentivizes them to get the lowest amount) or
You are also almost always going to get a better deal with a lump sum settlement. The difference can be significant. We have seen with another creditor that a lump sum of 25% of charges was offered vs. 45% of charges in 24 months.
Bankruptcy may also be a valid option when you are sued. This option may be more realistic if you are unable to come up with funds to pay the debt and you have a lot of other outstanding debt, meaning that more creditor lawsuits are likely to happen.
For this route, you must consider whether you have other assets, income, and liabilities that would make this option either too expensive or not good for your situation. We built a Chapter 7 Calculator to help determine whether you qualify and a Chapter 13 Calculator to help determine your plan payment if a Chapter 7 does not work for you.
It is good to speak with Portfolio Recovery if you do not and cannot have money to pay the debt. I can help with that conversation. If you need to buy time to get the money together to attempt to settle, you can also file a reply to the case. Rest assured that we have had great success in this area or we can point you in the right direction if we are unable to help.
You may be expecting a resounding, "yes", but this is another situation where it depends on the situation. For example, let's say someone has $50,000 in unsecured debt, and creditor 1 sues for $5000 of unpaid debt. Let's say you are able to settle for 75% of the charges. Are you able to settle for 75% of charges if creditors 2-5 end up following suit and suing you?
How do you mitigate this potential problem? My advice is to find someone who can review your credit report and give specific advice on a strategy including how litigious your creditor mix is. Others do this service as they have creditor lawsuit data, and we do as well, so we are happy to do so.
Also, I advise you to not pay for a credit report. The government allows you to get a credit report from the 3 bureaus once per year. Here's the FTC government website that will point you to the AnnualCreditReport.com. The key to reviewing a credit report is to look at specific trade lines and balances related to those trade lines. Experian has a great article titled, "Understanding Your Experian Credit Report".
This is situational from state to state. We wrote an article specifically highlighting information on garnishment and state statutes when debt collectors sue.
There are many times where Portfolio Recovery will be able to obtain a judgment without your knowledge. Say for example that you were not able to receive the court summons. The creditor, in this case, may ask the judge to have a judgment passed to them regardless of whether you received the summons or not.
In this case, it may be more difficult to negotiate with Portfolio Recovery, but that is dependent on such things as whether your state allows wage garnishment or whether there are opportunities for levies or liens against an asset. It may also depend on how likely Portfolio believes it can collect money from you.
Portfolio Recovery is in the habit of settling debt via a payment plan or a lump sum payment prior to the lawsuit. You may be thinking that it’s not possible to come up with a lump sum payment to settle that debt. That’s completely understandable.
We work with Portfolio Recovery to negotiate flexible payment arrangements that work for both the consumer’s finances and for Portfolio Recovery. You should be able to do the same. You also may be able to avoid a future lawsuit if you are able to get a structured settlement plan in place with them today. Feel free to contact us directly with any questions about how this may work your budget.
Absolutely, we are experts here to help. Ascend is in the business of helping people resolve his/her debts through payment plans and one-time payments. Our conversations and emails are always free. We will never move forward to offer our services unless we believe it is best for your situation. Feel free to comment below with your questions.
There are a few things you can do when there's absolutely no way that you can resolve any of your debt. First, I would recommend speaking with them and being completely open with your financial situation. You can provide bank statements and/or pay stubs along with an overview of your income and expenses.
There are numerous alternatives, but the most common when there's absolutely no way to resolve your debt is bankruptcy. We built a Bankruptcy Calculator to help compare your options and your costs. There is also a DIY option Chapter 7 Bankruptcy, so let me know if you'd like more information.
We do not know why, but Portfolio Recovery is notorious for not wishing to provide settlement documentation in writing. This is a common practice amongst most creditors, so we do not know it has taken this stance. There are three common ways to deal with this
I have not personally seen Portfolio Recovery not follow through on the settlement, but I am not sure everyone can say that.
Until recently (potentially the last 3-6 months), Portfolio Recovery has not been in the habit of doing what we refer to as a “Pay to Delete”. That said, we have seen that this has changed and has even been added to Portfolio Recovery’s Frequently Asked Questions. Here’s the summary of the change:
We definitely appreciate Portfolio Recovery’s recent more pro-consumer stance on credit reporting, and we hope you appreciate it as well. Drop me a note if you have any questions.
Your situation is unique, so you will always be the best person to understand what you should do in any situation.
You also should understand your options, which is why we built the free debt relief options calculator below to help. The calculator is based on your zip code, and the information is personalized to your financial situation.