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My fiance's old debt is all charged off and in collections - is bankruptcy the answer?

Date: Sun, 10/31/2010 - 11:55

Submitted by Sekins
on Sun, 10/31/2010 - 11:55

Posts: 16 Credits: [Donate]

Total Replies: 17


I posted a bit of information on this weeks ago when I first found out about my fiance's large amount of old debt. I wasn't a registered user then and have also learned a bit more about it so I'll start a new thread now with more specific questions and info. We live in Florida and she has now received a couple of letters from collection agencies and also one from an attorney in Miami.

All her debt is in the charged-off state but all the dates of last activity, last update or collection date are from late 2008 to mid-2010, so the 4 year SOL for FL does not seem to help here, from what I have read.

The debt was all from Open Accounts (credit cards) in her name only plus one listed as an auto loan. Her credit report shows that nearly all the debts that were charged off have been picked up by CA's so I guess it's only a matter of time until they all come calling.

The total amount outstanding is right around $22,000. She has no assets at all to speak of, not even a car (it's in her parents name). Her part-time work does not net much money and she has not yet been able to get a full-time position in her field (college grad).

Is bankruptcy the right answer here? Any thoughts on if that has any bearing on us wanting to get married around Spring/Summer 2011? In terms of credit, it doesn't matter that hers is trashed. I have a house and solid credit. Any advice here is greatly appreciated!!

From what I have read on this forum, many people are able to negotiate their own settlements with credit cards and even with collection agencies, although the latter may be a little more difficult to resolve. However, even in a best case scenario that we get her debt down to around 30% for payoff, that's $7k-8k that she (and I!!) do not have.

Am considering finding a lawyer in the area as well that I could pay for an hour's consultation on this issue.

Thanks in advance for your help!!!
-Sekins


That seems like a small amount of debt for which to file for bankruptcy, especially since it's all charged off debt. Can you list who she owes and how much she owes each? If it's a CA, let us know that as well as the original creditor. If it's still with the OC, let us know how far behind she is?


lrhall41

Submitted by OhioGal1 on Mon, 11/01/2010 - 06:27

( Posts: 5253 | Credits: )


Hi OhioGal1, thanks for your reply! I absolutely can list out each creditor and the amount, I have a summary already written up on paper. I will post that when I get home from work today.

I was reading up more on bankruptcy last night and it seems like Chapter 13 is not of real value to her in this situation. Chapter 7 may still be of value although it is interesting that you mentioned her debt amount is rather small for filing that. I was considering the "do nothing" approach for her in an attempt to wait out the SOL but the problem with that is if she somehow does get a good full-time position in her specialty (medical field), her income would go from "not very much" as a part time bartender to having a very solid salary. I would think at that point the creditors could successfully file lawsuits to obtain some of it - although, now that I'm typing this out, if she did have that salary she could afford to pay down her debts in settlements with these CA's.

Ok, all for now, will post again tonight. Thanks!
Sekins


lrhall41

Submitted by Sekins on Mon, 11/01/2010 - 07:16

( Posts: 16 | Credits: )


Okay, here is a breakdown of the debts:

Arrow Financial (CA) GE Money Bank (original creditor) Amount $425 Collect Date 12/08

Asset Acceptance LLC (CA) Citi Rooms to Go (original) Amount $2,600 Collect Date 12/09

Midland Credit Mgmt (CA) Chase Bank (original) Amount $4,500 Collect Date 1/10

Chase Bank (original)-charged off, no CA record yet Amount $6,000 Collect Date 12/09

Credit Protection Assoc (CA) Comcast (original) Amount $275 Collect Date 12/2008

Portfolio Recovery (CA) HSBC Bank (original) Amount $3,000 Collect Date 8/2010

Lenscrafters/GEMB (original)-charged off no CA yet Amount $1,050 Collect Date 2/2008

TD Bank N.A. (Mercantile) original on auto loan, charged off Amount $5,174 Date 9/2010


Thanks again for any advice and help you can provide!
Sekins


lrhall41

Submitted by Sekins on Mon, 11/01/2010 - 19:03

( Posts: 16 | Credits: )


Also, I forgot to add that I did already send a letter of validation to the law firm in Miami that contacted my fiance on behalf of Midland Credit Management. Their letter stated she must respond within 30 days or they will consider that acceptance of the debt. I sent her letter certified and with return receipt. The signed slip has already come back but no other word from the firm.

Hopefully, that action was the right one?


lrhall41

Submitted by Sekins on Tue, 11/02/2010 - 20:16

( Posts: 16 | Credits: )


It's a little frustrating to see posts by people that aren't even registered who provide almost no detail in their questions get some responses by the moderators and experts of the board, yet I've given all the details asked and have bumped several times trying to get a response without any luck!

I've set up a phone appointment with a bankruptcy lawyer tomorrow, perhaps I will obtain some good advice there.


lrhall41

Submitted by Sekins on Sun, 11/14/2010 - 09:49

( Posts: 16 | Credits: )


Hi OhioGal,

Okay, good to hear sending a DVL is the first step - I already did that for two of them that have made contact. From what I've been reading, their obligation to validate is simply to provide the last statement from the original credit card showing the amount outstanding?

If all these debts are listed on her credit report and within SOL, is it fair to assume they will all be valid?

Finally, in regards to the money, in a best-case scenario situation, her $22k could be reduced to about 30%, or around $7k. We really do not have the money to pay that. I suppose over the course of a year, she may be able to do it, given her low income and also given that I provide her with everything: gas, food, shelter, etc. Is there a benchmark for when a debt is reasonable to try to pay and when it is not?

thanks!


lrhall41

Submitted by Sekins on Wed, 11/17/2010 - 09:10

( Posts: 16 | Credits: )


Not necessarily. Since some of these were charged off a while ago, you might be dealing with JDBs on some of them. They may have no documentation of the debt at all other than a name, partial SS# and a phone number. Requesting validation may simply cause them to sell it off to another JDB but, it will buy you time and hopefully help with paying off the ones that are legit. Frankly, I wouldn't worry about the ones that haven't contacted you yet. Deal with them as they come in or as you are able to. Proper debt validation is a murky area as far as the FDCPA. It's not very well defined. However, in most cases, the CA needs to produce something with your finance's signature (original contract/application, etc.) or, if they have statements and can show that she was paying on the account, that would validate the debt, but not necessarily the amount due.


lrhall41

Submitted by OhioGal1 on Wed, 11/17/2010 - 10:35

( Posts: 5253 | Credits: )


I see the dates on the creditor list but you need to research when the last charge and/or payment was made. that is probably when the clock starts on the SOL.

Typically, in Florida wages cannot be garnished for head of household and until you get married each of you is head of household (google florida garnishment wage law).

Collection agencies should be easier to settle with if they purchased the debt. Debt is sold for 8 to 10 cents on the dollar. But it is important to have the funds immediately available to conclude the settlement.

Always demand a written settlement offer.

One alternative to all these threats and phone harrasement is to invoke the FDCPA and write a letter telling them not to call you. Tell them you prefer to use the US mail to discuss the issues and options and threats of legal action. Then lay out your your demands (proof, whatever) in the same letter. If they correspond answer them.

My best guess is that the attorneys office wont call you again.

Im not lookin it up for you right now, but you should determine the exact rules for SOL, so you know exactly when the SOL cuts in.


lrhall41

Submitted by on Wed, 11/17/2010 - 12:14

( Posts: | Credits: )


OhioGal, thank you for explaining that part about how not every CA may be collecting on a valid debt! I assumed if I saw it in her credit report, she's going to be liable for it.

Jimmy, thanks for the information about garnishment of wages. Funny you mention that, one response I got from a local bankruptcy lawyer (after a brief explanation of this situation) was this:
"[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy]She does sound like a candidate for a ch7; forget what you read about most people being able to negotiate settlements as I have not seen it yet. That’s the media and the hype which doesn’t want people to file bankruptcy, but for a lot of people it’s the best option. If you do enter into a settlement with one of these companies, you pay out a lot over a long period of time and there is no guarantee she wouldn’t be sued.[/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy] [/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy]She should file before you get married, or your income will count in the analysis. If she does nothing, she’ll be sued and could have her wages or bank account garnished."[/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial][/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy]The problem I have with SOL is determining exactly when it does start; I've been reading some conflicting information. Google searching seems to indicate it is either the date a person failed to honor their agreement to make payments, or else the time a credit card sends a demand letter for payment of the full amount. Florida is at least one of the states where making a Partial payment does not restart the clock, so long as a person does not enter into a new written contract.[/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial][/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy]In that regard, thank you for providing this kick about the SOL to me - I will go back and attempt to determine from her credit reports when the last payment/charge may have been made on all these accounts. It is possible that a few of them are in SOL or near it, then![/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy][FONT=Arial][/FONT][/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy]much appreciated,[/COLOR][/COLOR][/SIZE][/FONT]
[FONT=Arial][SIZE=2][COLOR=navy][COLOR=navy]Sekins[/COLOR][/COLOR][/SIZE][/FONT]


lrhall41

Submitted by Sekins on Wed, 11/17/2010 - 13:02

( Posts: 16 | Credits: )


The bankruptcy option is a good point. If she has no assets and no (or very little) income, it might be the better way to go. It could give her a fresh start - wipe the slate clean, so to speak. I do still think that the amount she owes is relatively "small" where bankruptcy is concerned but, I also know that, when you don't have the money to pay for something, nothing "feels" small.


lrhall41

Submitted by OhioGal1 on Fri, 11/19/2010 - 06:18

( Posts: 5253 | Credits: )


UPDATE - back in October, my fiance had received the letter from the law firm in Miami, on behalf of Midland Credit Management. I sent the law firm the certified and signature DV letter right away, thanks to information I've gathered here - but I did not send it to Midland directly. Does that matter? She did not receive a response...until yesterday.

I left the house yesterday and within about 10 minutes, someone knocked and the door and served her papers!! It is a Notice to appear for Pretrial Conference/Mediation, from Midland to her, with a Statement of Claim attached and signed by Pollack & Rosen, the Miami law firm. Is this legitimate???

The document looks legit, it has stamps all over it, including one proclaiming a "true copy" - but since I'm somewhat familiar with the court documents/stamps in this county, I'm suspicious.

I can call the county circuit clerk's office tomorrow when they are open to verify - right? Or is it automatically BS because there is no such thing as a Pretrial conference/mediation?

This debt to Midland is the $4,500 listed above. There was no response to the DV letter - do I need to send another one, this time to both Midland and the law firm?

I had spoken briefly to a BK lawyer in the area but we haven't taken any steps to do anything at this point. I sent a couple DV letters in response to the CA letters she had received, both her and at her parents house. No responses yet.

Thanks for any advice you guys can provide!
Sekins


lrhall41

Submitted by Sekins on Sun, 12/19/2010 - 09:14

( Posts: 16 | Credits: )


I was able to use the Broward county circuit clerk's website to validate that this case filing is real. My fiance has to appear for this Pretrial conference/Mediation in middle January.

Midland Credit and Pollack & Rosen never replied in writing to my DV letter. However, based on more research here, that doesn't mean much as they will just arrive at this Pretrial with the documentation they need and will prove it there.

My fiance did not ever say she was the person listed on the papers when she got served, but the guy left them with her anyways so I assume that now that she has them in her possession, that part is irrelevant. So sneaky that they waited until I had left the house to serve them, I'm almost positive of it.

The last thing I want is for her to have to go to this Pretrial, stand there and tell the mediator that she has very little money and no assets and doesn't earn much, only to have some sort of agreement pushed on her. If the debt is $4,500 and the service papers also state she is liable for "interests, costs and disbursements" then I'm sure these jerks will push for as much money as they can. So what's likely to happen? She gets put on some sort of program to pay $50 or $75 a month forever until it gets paid down? That's no good.

The court document also states "Do not bring witnesses, you must appear in person or by attorney". That means I couldn't even go with her?

I'm starting to think that this is the tip of the iceberg and even if she got on a payment plan with these guys, or made a 1-time full settlement payment at some reduced amount, that the other CA's would see that and would come after her even more.

Maybe filing BK is the answer after all...

sorry to ramble on but I really need some direction here, and there isn't much time to figure this out.

PLEASE help!!


lrhall41

Submitted by Sekins on Sun, 12/19/2010 - 10:18

( Posts: 16 | Credits: )