Consumer Protection Law

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Can a collection agency that is only servicing a debt report…

Customer Question
Can a collection agency...

Can a collection agency that is only servicing a debt report on a bureau? Or do they need to purchase and own the debt in order to report the collection account

Lawyer's Assistant: What state is this in? And when did the issue begin?

Ok, a quick explanation: This is a Timeshare contract originated in Mexico. Contract reads jurisdiction is in Mexico District court.

Lawyer's Assistant: What steps have you taken so far?

The issue is annual maintenance fee. The resort is using USA Arizona based collection agency

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

No I do not type very fast But want a good collection attorney

Submitted: 3 months ago.Category: Consumer Protection Law
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Customer reply replied 3 months ago
The Timeshare Maintenance contract has a clause that states non payment of the annual maintenance fee for 2 consecutive years implies cancellation of the contract. And the Spanish version doesn't use the word implies, it just says they will cancel the membership. The issue, is that Americans can not take advantage of this mechanism, and simply not pay for two years in order to extinugh the membership because, the resort contracts with an American based collection company to threaten ruining the consumers credit
Customer reply replied 3 months ago
The Timeshare Maintenance contract has a clause that states nonpayment of the annual maintenance fee for 2 consecutive years implies cancellation of the contract. And the Spanish version doesn't use the word implies, it just says they will cancel the membership. The issue is that Americans can not take advantage of this mechanism, and simply not pay for two years in order to extinguish the membership because the resort contracts with an American based collection company to threaten ruining the consumer's credit and forces them into paying.
Unlike a credit card, where when once charged off, and the account is transferred or sold to a debt collector, the account with the original creditor is closed. A Timeshare Annual Maintenance fee in default is transferred to a Debt Collector and if the debt collector is successful in leveraging the consumer into paying or settling the account. The account with the Original Creditor is thus reinstated and the cycle will be an ongoing year after year event.I am sure consumers ask, "what if I don't want this anymore" and are probably told at the time of purchase, "simply stop paying and in two years it's over." But that isn't the case, and a US-based debt collector is never even mentioned. They can not get to that two-year mark without having their credit ruined.
Asking if they own the debt? Can the Resort just sell the debt for that current year to a debt collector, but keep the timeshare contract active and in force, or once the debt is sold the contract will need to be terminated????
Customer reply replied 3 months ago
See SEVENTH
Answered in 28 minutes by:
3/27/2018
Consumer Protection Lawyer: Law Educator, Esq., Lawyer replied 3 months ago
Law Educator, Esq.
Category: Consumer Protection Law
Satisfied Customers: 125,859
Experience: Attorney experienced in commercial litigation.
Verified

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

Actually, just because the jurisdiction is in Mexico would not make the debt invalid in the US as well. Legally, debt collection companies are legal to be used to collect a debt without owning the debt. This also means that they may report the debt to the credit bureaus and seek to collect the debt in the US.

Now, if you do not pay and they want to sue you, then they have to sue you in the Mexican court and upon the Mexican court entering a judgment then they can take that Mexican court judgment to a US court where you live and file a Petition to Recognize and Enforce Foreign Judgment and seek to get the US Court to enforce the judgment against you.

Consumers ask all the time, how do I get out of a timeshare and quite honestly the answer is sell it off or donate it for a cause or default and claim bankruptcy. What customers do not understand is under the law both in the US and Mexico, once you sign a contract you are bound by the terms of that contract and if you were not so bound, then use of a written contract would be useless.

However, most of these timeshare companies will settle out these matters if you engage a Mexican attorney and some of our customers have said they have used***@******.*** who does not charge them up front and only charges upon resolving the claim.

Please do not forget to leave positive feedback by clicking on the 5 stars at the top of your page, as the experts are not employees of the site and get no credit for spending time with customers unless they leave positive feedback. Thank you.

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