Complaint Review: Cory G. Hicks & Associates - Tuscon Arizona

If you sell the debt, then yes you deduct the loss and that's that.

If you just "write off" the debt, then you can deduct the loss, but then if they end up paying you repay the taxes. The IRS has guidelines about how long before you can assume a debt won't be paid for tax purposes, but I am not sure of the details.

It is a lot like rebates; when a company offers a rebate on the product, they know that only a certain percentage of buyers will use the rebate, so the company uses an estimate for tax purposes, and then makes up the difference when the actual numbers come in.

And at first I thought the OP was a bit over the top, but after reading the post by the collector I'm not so sure; the collector seems like a bit of a scumbag. Check out this genius reasoning: 

"Obviously if you had employees running your business you had income and you had money to make payroll and justify the continuance of the company?"

1 - Just because you do not have zero income does not mean you can pay all your debts.

2 - Making payroll is a debt like anything else, including the $700 you are after. However, while the $700 can cost him some interest or a credit report hit, not paying his workers would cause the business to cease. Therefore he would be amazingly stupid to pay you instead of his employees.

3 - As far as him "justifying the continuance of the company" goes, you think he should shut it down? How daft are you? I mean, if he had a job but had to pay for transportation to get there, would you suggest he quit his job so that his transportation money could go towards you?

Also I find it funny that both the debtor AND the creditor make appeals to morality here. This is a business issue, nothing more. 

First of all I want to say congratulations on your daughters recovery.  That is good news and you are blessed.

That being said, why do you post this anonymously?  If you stand in the right as you claim then why do you not list your name, phone number and address so you can be contacted and made aware of your obligation more thoroughly.  Mr. Smith completely and thoroughly explained why you owed for the product you took and you admit that you owed it.  However, because you want it to be free you simply became argumentative and belligerent.  Is that not more the truth?  

Mr. Smith has worked for me for many years and if nothing else he is very compassionate when people are truthful and truly show a desire to resolve matters.  Looking at your post any reasonable person can see that your tactic was to use your poor daughters condition as some kind of excuse not to be responsible for yourself.  Obviously if you had employees running your business you had income and you had money to make payroll and justify the continuance of the company?  You should have made a better effort to resolve the money you owed instead of using your sick daughter as a pawn in your game of irresponsibility.  The worlds victims need to go live on an island and cry to each other while the rest of us responsible people do what is right despite how hard life is.  We all have it rough and to use that as an excuse not to meet your responsibilities is disgraceful.
Cory Hicks

Robert,

I would go with the advice of your business attorney. My statement was more geared toward the scenario where the original creditor sells the debt at a loss or, in other words, sells the right to collect on the debt to a third party for a portion of the original debt.

At that point, to collect on the debt would be to treat it as an asset that you still own. My understanding is that this would be a violation of IRS rules in that you have declared a loss but are still taking actions indicating ownership of the debt.

Your scenario is different in that you have suffered a loss but, as you've retained the right to collect, you still have a potential asset. So it's kosher for you, since you haven't transferred the debt, to treat it as a loss one year and a gain in another.

I may be wording this completely wrong, and I am no tax guru. But I would love to hear some other input on this, especially if I'm way off the mark (which happens from time to time).

Best regards!

"But here's the thing. By the time your debt has been handed over to a collection agency, the original creditor has likely charged it off as a business loss, ergo they cannot collect on it per IRS rules."

Can you cite the exact IRS rule or section of U.S. code that stipulates this?  In the past I have had 3 debts owed to me that I "wrote off" (charged off) and LATER the debtors paid me the monies after I sent them a few letters.  Once the monies were received, I then claimed the monies on my business taxes for the year inwhich they were received.  I did this per the instructions of my business attorney.

It is my understanding that a charged off debt is STILL VALID and collectible.  I know of only 3 ways that a charged off debt is absolved;  The creditor forgives it, the debtor pays it, or a court orders it absolved.  If you know of a specific rule or statute that states otherwise I'd surely like to know about it.

Thanks in advance Tim.

If you live in the State of Texas the law is that a debt collector MUST file a Surety Bond with the Secretary of State - I searched the website and this "firm" does not have a bond filed therefore they cannot try to collect a debt period

Section 392.101 of the Texas Finance Code prohibits a third-party debt collector or credit bureau from engaging in debt collection in Texas unless the third-party debt collector or credit bureau has obtained a surety bond and filed a copy of the bond with the Office of the Secretary of State.

Contact the Secretary of State and file a report - this agency can be fined for every call made - keep a record of all calls made, record them then sue em

I love Steph's vitriol against debt collectors, as they are, generally, the scum of the earth.

However, I find myself disagreeing with her advice most of the time. Don't tell deeebt collectors to go f*ck themselves, that will only make them more aggressive. However:

1) DO refrain from giving out personal information.

2) DO refrain from entering into payment agreements. This creates a new contract, with a new statute of limitations.

But here's the thing. By the time your debt has been handed over to a collection agency, the original creditor has likely charged it off as a business loss, ergo they cannot collect on it per IRS rules.

My standard advice is one of the following (in order of preference):

1) Declare bankruptcy.

2) If you can make a ONE TIME payment of 60% of the original debt, offer this to the collector in exchange for a "Satisfaction and Release" of the underlying debt.

3) Send a cease and desist letter.

Option 3 will not work if this is contracted as a commercial debt (FYI to my RoR loyalists: the FDCPA does not apply to commercial debts). But it will force the matter into litigation, which you may or may not want.

I know this isn't much help, but it's all I can give. I hope it helps.

I would tell this person to stick it were the sun don't shine . I would not even give this caller your bank imformation these agencys cannot be trusted . If I were you I would call the phone company to see about putting a block on thier # so they can no longer contact you. If it shows unknown I would request to the phone company that you do not take calls from blocked calls. If he calls your place of employment I would have my manager get on the phone and tell him if he does not stop calling here he will face a harassment suit. It is also against the law for a collection agency to call you at work