In the context of debt collection, a “forward flow agreement” and a “chain of assignment” are related concepts that refer to the transfer of debt ownership and collection rights.

Forward Flow Agreement: A forward flow agreement is a contract between a creditor (the original lender) and a debt buyer or a collection agency. In this agreement, the creditor agrees to sell a steady stream of outstanding debts to the debt buyer or collection agency over a specified period. The debts are typically sold in batches, and the agreement outlines the terms of the sale, including the price, volume, and type of debts to be sold.

The forward flow agreement allows the creditor to offload a steady stream of non-performing debts, freeing up resources and reducing the burden of collecting on these debts. The debt buyer or collection agency, on the other hand, acquires a steady supply of debts to collect, which can help them build their portfolio and generate revenue.

Chain of Assignment: A chain of assignment, also known as a “chain of title,” refers to the sequence of transfers of ownership and collection rights for a specific debt. It documents the history of assignments, sales, and transfers of the debt from the original creditor to subsequent debt buyers, collection agencies, or other entities.

The chain of assignment is essential in debt collection, as it establishes the legitimacy of the current debt owner’s claim to the debt. It helps to:

Verify the debt’s ownership and collection rights.

Prevent multiple parties from attempting to collect on the same debt.

Ensure that the debt is not sold or transferred to multiple parties simultaneously.

A typical chain of assignment might look like this:

Original Creditor (e.g., a bank) → Debt Buyer 1 → Collection Agency 1 → Debt Buyer 2 → Current Debt Owner

Each link in the chain represents a transfer of ownership and collection rights, and the chain of assignment provides a clear record of these transactions.

In summary, a forward flow agreement is a contract for the sale of a steady stream of debts, while a chain of assignment is the documentation of the sequence of transfers of ownership and collection rights for a specific debt. Both concepts are crucial in the debt collection industry, as they facilitate the transfer of debts and ensure that the current debt owner has the legitimate right to collect on the debt.

Using the concepts of forward flow agreements and chains of assignment can be a powerful strategy to potentially clear your credit report of debts that have been transferred to secondary collection agencies.

Ultimately, you want to Demand a “forward flow agreement” on top of a “chain of assignment”. Reference the FDCPA’s $1000 per violation which you will be collecting via small claims and recommend that they remove the record from the credit reporting agencies if they won’t or can’t fulfill your request.

15 U.S.C. 1692 is part of the Fair Debt Collection Practices Act (FDCPA), which was enacted in 1978 to prohibit unfair debt collection practices. The FDCPA protects consumers and debt collectors. 

What the FDCPA does 

• Prohibits debt collectors from using false, deceptive, or misleading representations
• Prohibits debt collectors from harassing or annoying debtors
• Prohibits debt collectors from threatening debtors with arrest
• Prohibits debt collectors from contacting debtors before 8 AM or after 9 PM, except on holidays or weekends
• Gives debtors the right to demand that debt collectors stop contacting them
• Prohibits third-party debt collectors from contacting debtors who are represented by counsel

Definitions in 15 U.S.C. 1692 

• Bureau: The Bureau of Consumer Financial Protection
• Communication: The act of conveying information about a debt to someone
• Consumer: A person who is obligated to pay a debt
• Creditor: A person who offers or extends credit, or to whom a debt is owed
• Debt: An obligation or alleged obligation of a consumer to pay money

Learn more about the FDCPA HERE

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Here’s a step-by-step guide to help you:

Understanding the process:

When a debt is transferred to a secondary collection agency, the original creditor typically sells the debt to the agency, which then attempts to collect the debt from you. However, if the debt has been transferred multiple times, the chain of assignment may be broken, or the current debt owner may not have the necessary documentation to prove their ownership and collection rights.

Step 1: Obtain a copy of your credit report

Get a copy of your credit report from the three major credit bureaus (Experian, TransUnion, and Equifax) to identify the debts you want to dispute. Make a list of the debts, including the original creditor, the current debt owner, and the collection agency.

Step 2: Send a debt validation letter

Send a debt validation letter to the current debt owner or collection agency, requesting them to provide:

Proof of the original contract or agreement between you and the original creditor.

A copy of the assignment or sale agreement that transferred the debt to the current debt owner.

Verification of the debt amount, including any interest or fees.

Proof of the chain of assignment, showing each transfer of ownership and collection rights.

You can use a sample debt validation letter template, but make sure to customize it to fit your specific situation.

Step 3: Dispute the debt with the credit bureaus

If the debt owner or collection agency fails to provide the requested documentation or if the chain of assignment appears to be broken, you can dispute the debt with the credit bureaus. Send a dispute letter to each credit bureau, stating that:

The debt is not yours or is not valid.

The debt owner or collection agency has not provided sufficient proof of ownership and collection rights.

The chain of assignment is incomplete or broken.

You can use a sample dispute letter template, but again, customize it to fit your situation.

Step 4: Request a deletion or correction

If the credit bureau investigates and finds that the debt is indeed invalid or that the debt owner or collection agency cannot provide sufficient proof, they may delete the debt from your credit report or correct the information.

Step 5: Follow up and escalate if necessary

If the credit bureau does not respond or if the debt is not deleted or corrected, you may need to escalate the dispute by:

Sending a follow-up letter to the credit bureau.

Contacting the Consumer Financial Protection Bureau (CFPB) or your state’s Attorney General’s office for assistance.

Considering a lawsuit against the debt owner or collection agency for violating the Fair Debt Collection Practices Act (FDCPA).

Tips and warnings:

Be cautious when dealing with debt collectors, as they may try to intimidate or deceive you.

Keep detailed records of all correspondence, including dates, times, and the names of representatives you speak with.

Don’t pay a debt that you’re disputing, as this can be seen as an admission of liability.

Be patient, as the dispute process can take several months to resolve.

By using the concepts of forward flow agreements and chains of assignment, you can potentially clear your credit report of debts that have been transferred to secondary collection agencies. Remember to stay persistent, and don’t hesitate to seek professional help if you need guidance or support. Contact me for more help at 702-994-5431 (text preferred or leave voicemail).