What does it mean when you get a letter from a collection agency and it says....?

Question

"If you choose not to respond to this notification, we will assign your account to collector with instructions to liquidate this balance"?

What does "liquidate this balance" mean?

Answer 1

It means your credit is shot!

Answer 2

"Liquidate" means they want to turn the debt into cash.  

They basically have two ways of doing this:

1) They convince you to pay.

2) They ask a judge to take your assets.

The fact they haven't threatened to sue you yet, indicates they still believe they can save themselves the court costs and convince you to pay.

Answer 3

its all just mumbo jumbo talk to scare you. all you have to do , legally, to get them off your back, is to call them and ask to speak to retention or to a manager, and tell the manager that you need their mailing address (if you dont already have it) and that you are sending them a letter stating that you will pay the balance when you have the funds available and that there is no further need for them to send you letters or to call you anymore.

thats how it works here in Canada, i dont know about the states. but dont be afraid of what they say, altho you must contact them to let them know about your intention to pay back BUT it will be on your own time and terms as you do not have the funds available all at once or currently at the moment.  

Answer 4

They might start garnishing your wages, or put a hold on your bank account.  More than likely though the letter was jsut a scare tactic that collection agencies are known for.

Answer 5

It's a scare tactic, but if you do not respond and they move forward to liquidate, they can freeze your bank account, garnish your wages or even try to sheriff sale your possessions.Respond and they will set up a repayment plan that you can afford

Answer 6

They'll go to court to get a judgment against you and garnish your wages.

Answer 7

They will find a way to get your money.

Answer 8

I don't mean to be rude, but please don't listen to the previous answers. No, they can't garnish you or anything, they have no right. They may if the sue you, but VERY few collection companies actually BUY the debt and few go after you like that without a good deal of money.

You have 30 days to DISPUTE your debt. DO NOT call them and let them know who you are. You already have their mailing address. Simply send a letter back, some would say you should send certified, or also call for a fax number without telling them your info. Have your letter state that you dispute the debt. Request they Validate the debt, signatures, contract, amounts owed, how they calculated those amounts, evidence they are licensed in your state to collect and that they have the right to collect on you.

Make sure you send this before your 30 days.

Answer 9

It means that you are dealing with one of the more "shady" collection agencies who have experienced a lot of Fair Debt Collection Act lawsuits.

Collection agents are prohibited from threatening to take actions that they do not intend to take....or in this case they can not threaten to sue you unless they actually intend to do so.

So if this letter said something like "pay up or we will file a lawsuit"...and they don't follow through, they are in FDCA violation and you can sue them right back for $1000.

But they need to find a way to scare you into paying.....so the worded their letter in a manner that would imply that you will be sued if you don't pay....but without actually saying it.  

"Liquidate this balance"?  I don't have a clue what that means without using the literal definition.  Liquidate implies that they are going to erase or cancel your debt.  

Keep that letter.  It may prove useful in the future.