Collection from old employer for sign-on bonus

[cyn5]

Question - I have a collection agency calling me trying to collect on a debt that was actually a sign-on bonus from my old employer (2 years ago). Part of my employment was working there at least a year, but I had to leave after about 4 mos. That bonus was part of my income and I paid taxes on it for that filing year. Now this collection agency is calling me trying to collect. It is not on my credit report yet and I have asked them to send me documentation that states I owe it (14k). I probably will be filing bk in the next couple of months. Does anyone know if a collection like this can be included in bk? I am worried that they are probably going to pursue a judgement against me, but am thinking that I can just include this collection on my bk. Also, if I am able to include it...is it for the collection agency or the original organization (my former employer). Thanks!

[magyar123]

List both - your old employer and the collection agency.

[Flamingo]

What occurred when you left prior to the one year commitment to keep the bonus was breach of contract so your employer is going after the bonus given to you. You have or were given paperwork somewhere or in your Employment contract explaining all that and what would occur if you left before the one year period. As Magyar stated, you need to list the employer but advise the attorney of the collection agency. There might be an issue as to the taxes you said were taken out when you received the bonus (since you are going to put this amount in BK) so make sure you bring that up to your attorney so the IRS and State don't come after you in case something is missed.

[cyn5]

Okay, thanks that is a really good idea about the taxes thing. I left before my one year was because I was a consultant and the company (huge national/international co) and they had me benched for the first 4 mos I was there...never sent me out on a job, so I obviously found a local job and quit. Probably a bad move on my part, but I couldn't work there not knowing if I was ever going to be put on a project or not. The company's HR office sent me something like a year later wanting me to sign something stating the bonus they gave me was a "loan" with interest and everything....of course I am not going to sign that! So, now it is more than two years later and I am not getting calls from some collection agency...haven't received anything in the mail yet. Not sure the can do anything anyways since the collector is out of state and would probably cost more money than it is worth to take me to court over 14k. I know that in some states companies cannot collect on bonuses or incentives paid, no matter what the employee signed. I would think that they would have started this last year. If I were not going to file for bk, I would not worry about it and I would fight the collection, but since I am going to I just want to make sure I have all my bases covered. Thanks!

[debtmonster]

Wow! I didn't think any employer would come after that. I worked for a guy in 1998 who gave me a $3,000 sign up bonus to help me with relocation expenses. I worked there for about 8 months and found another job in another state paying a lot more money. I couldn't stand working with the co-workers who had serious attitudes. He never came after me, but I am including it in the BK anyway in case he sold the debt. Since I am filing BK, I want a clear slate and don't want to miss out anyone.

[cyn5]

I am not filing bk for a few months, but do not want this stupid collection agency getting a judgement against me/taking me to court over the repayment of this bonus. What are the chances that they would really be able to get a judgement? The collection agency is out of state and I checked and they are not licensed in my state. Wouldn't they have to hire a collection agency in my state to get a judgement? They have not sent me "proof" that they purchased this debt, just sent me a copy of my w2 and copy of my employment letter that I signed. I guess I could just ignore them. I sent the cease and desist letter and that is when they sent me a copy of the w2 and stuff. Should I disagree with what they sent me and just send another cease and desist, demanding that they return the debt to the original creditor (which would be my old employer). Any thoughts?

[Flamingo]

I am not filing bk for a few months, but do not want this stupid collection agency getting a judgement against me/taking me to court over the repayment of this bonus. What are the chances that they would really be able to get a judgement? The collection agency is out of state and I checked and they are not licensed in my state. Wouldn't they have to hire a collection agency in my state to get a judgement? They have not sent me "proof" that they purchased this debt, just sent me a copy of my w2 and copy of my employment letter that I signed. I guess I could just ignore them. I sent the cease and desist letter and that is when they sent me a copy of the w2 and stuff. Should I disagree with what they sent me and just send another cease and desist, demanding that they return the debt to the original creditor (which would be my old employer). Any thoughts?

You will eventually get taken to court for this as this collection agency knows you are in another state but they may have other operations under other names in your state or I am wondering if your employer is in the state in which you reside. If they cannot collect the next step may be to turn it over to an attorney but the expense for them may not be justifiable. You also need to understand that if you use your former employer as a reference for future employment this situation could work against you.

[cyn5]

Thanks Flamingo - my old employer was a large, global company - has offices in many states. Not sure why they would use a collection agency in another state...probably sold the debt? I am not worried about needing references from that company, as it has been about 2 1/2 years since I worked for them and I worked for them for only a few months. You're right, I just don't see how it could be profitable for them to even try to take me to court. I guess I should just ignore them? Or perhaps dispute it with them? Just seems weird that they would come after me 2 years later. Why not hire the collection agency within the first year.

[Kansas1960]

This makes we concerned about a similar issue with Medical Savings Account

I quit a job in 2006 in April and by that time had used the entire years balance of medical savings account of 1500 but only paid into it until April leaving about 1,000 paid to medical bills which I did not pay. They never asked me for that back, which I had expected. Do you think this may come back to haunt me or is the bill old enough? Should I include a possible debt in the BK or let it ride since it is 3 years old in 3 months?

[Never_Again]

If that account is a flexible spending account, then they will not be able to come after any money that was advanced over what you had put in. That is just how those plans work. They are "use it or lose it" at the end of the year, and that lost money is what funds what gets overwithdrawn with someone quitting.

[cyn5]

You will eventually get taken to court for this as this collection agency knows you are in another state but they may have other operations under other names in your state or I am wondering if your employer is in the state in which you reside. If they cannot collect the next step may be to turn it over to an attorney but the expense for them may not be justifiable. You also need to understand that if you use your former employer as a reference for future employment this situation could work against you.

You know, I just don't think the expense for the would be justifiable either (10k). Employer's corp office is not in my state (they just have a local office here...which I was not part of). I do not think this collection agency has a local office under a diff name here in my state, but I could be wrong (how do you find this out and if so, why wouldn't they use their local office in my state then)? My state requires a bunch of disclosures and that they have to tell you that they are a collection agency, etc...which this collection agency has not done. I disagree with their "validation" and now I guess I should just wait it out until I decide to file for bk. I think I might send them another cease and desist letter. Should i just tell them I intend not to pay and tell them to take me to court? Can I tell them to send the debt back to the original creditor or something?

[coloradomrg]

haha, the expense didn't have much to do with it in my case... I got sued 3 times for less than $500 and once for $5k. Just depends on the mood of the collector. There is always some local dirtbag atty who is willing to file the papers because 9 times out of 10 the debtor won't show and he gets a judgement, and then a percentage of the collected amount.

[cyn5]

haha, the expense didn't have much to do with it in my case... I got sued 3 times for less than $500 and once for $5k. Just depends on the mood of the collector. There is always some local dirtbag atty who is willing to file the papers because 9 times out of 10 the debtor won't show and he gets a judgement, and then a percentage of the collected amount.

So true. I wonder how long it takes the collector to sell your debt off to another once they figure you aren't going to talk to them or pay them?