Likelihood of being sued
Date: Fri, 08/31/2012 - 12:49
Four years ago our financial situation deteriorated and we lost about 40% of our income. We tried making ends meet for a year, borrowing Peter to Paul with our credit cards when we ended up in a mountain of debt that we could no longer afford to pay the minimums on. We even got behind on our mortgage which was the first time that had happened in 13 years of being homeowners. So in the summer of 2009 we made the painful decision to stop paying our credit card payments.
In the three years since then we have received summons twice and letters of validated debt from one collection attorney that never filed. We were able to settle each of these three accounts by using our tax refund for one, setting up a payment plan with another, and taking out a 401K loan to pay the last. The nice thing about these three accounts is that the summons/attorney's letters arrived staggered. One in 2010, one in 2011, and one in 2012. We live in California and the SOL here is four years starting (I think) from the date of default which means we have less than a year left in the SOL. My concern now is that there are still a few accounts out there that could potentially sue us and one of them has a big balance.
I feel very uneasy that the remaining three accounts will all come knocking at once and that we won't be able to financially handle settling them. One of them is still with the original creditor (Discover) and I feel fairly certain we will be hearing from them before the statute of limitations. The other two are both with debt buyers, Asset Acceptance and Calvary. We have never heard anything from Calvary, not a letter or a call and yet they have tacked on $4000 in fees since they bought the account in January of this year ( I can see this from checking our credit). Asset Acceptance has sent us one letter themselves and then handed the account over to a collection agency to collect for them. They rarely call and have also only sent one letter.
My question to the experts is what is the likelihood that all of these accounts will come sniffing around for money in the next 10 months? Thank you in advance for your responses and I'm sorry I wrote such a novel.:D
Firewoman is a great Cult song. You a fan? Maybe you literally p
Firewoman is a great Cult song. You a fan? Maybe you literally put out fires.
Creditors and buyers do use systems that are designed to alert them when the SOL is coming up. They will also use sophisticated software, some provided by the credit bureaus themselves, to evaluate whether suing you has a high likelihood of payment. If I were viewing your profile through one of these systems I would sue for certain.
Of the three remaining debts your largest risk is Discover. The other 2 are from debt buyers and there are ways to gum up those lawsuit works if you need to buy time. Using the most effective gum means hiring a creditor defense attorney. That costs money.
How much are each of the debts respectively?
Just curious, in total you had the Discover card, 2 cards that w
Just curious, in total you had the Discover card, 2 cards that were settled, and 2 others, correct?
Michael is right on the money - as a credit card company employee myself, I am surprised they haven't gone after you faster. Discover is a little more friendly than the rest of the bunch but still, you've gotten very lucky so far.
Thank you so much for the replies. The Discover card balance is
Thank you so much for the replies. The Discover card balance is $6200 and I agree that they will likely being suing us soon. The balance on that card is not the scary one.
Michael, out of curiousity, what makes our situation look like a good one to sue? Is it because we are homeowners? To answer your questions on the balances, I already stated the Discover card balance and the other two accounts are $21,000 and $14,000. One of them has tacked on $5000 in fees in the last eight months. We have never heard from them.
While we have settled three accounts, only two are on my husband's credit (the last three cards are in his name only) and only one is showing as settled and that was back in early 2010 for a small balance card. That company sued us within 9 months of default and was still with the original creditor. The most recent settlement is the second account that shows on my husband's credit and it shows up as an account "in dispute" because we DV'd them after the initial attorney's letter. Their client had purchased all of the paper and they validated the debt within a week. We spoke with a few different attorneys and the opinions were mixed about whether or not it was worth it to fight the suit so we took out the 401K loan. We can't do that again, though. That account does not show as settled on any of his credit reports, at least not so far. It was settled at the end of May.
Our mortgage has been 30 days late every month for the last 3 years. We have never been able to catch up. We have five children and after losing nearly half of our income without much notice our livelihood has been in the toilet. We've made a lot of lifestyle changes and are still trucking along so I try not to stress about this, but it's hard not to as the clock ticks down on the SOL.
Michael-I tried to edit my post but the forum wouldn't allow me
Michael-I tried to edit my post but the forum wouldn't allow me to.When I answered your question about the balances on the remaining accounts, the wording I chose sounded snotty. I didn't mean for it to be. :D I only meant that in the paragraph above the balance was stated. Sorry about that!
BTW-I do love that Cult song!
Quote:Michael, out of curiousity, what makes our situation look
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Michael, out of curiousity, what makes our situation look like a good one to sue? Is it because we are homeowners? |
Did you send validation requests to Asset Acceptance and/or the collector they placed the account with?
If I were in your shoes I would:
Save money up as aggressively as possible. If I had about 50% of the Discover balance I would be proactive in settling it now or over the next few months. If I did not have 50% I would still continue to save and if served prior to the SOL on Discover, I would evaluate who the firm is and then depending on what money I had built up:
Settle with term payments I could afford in order to avoid judgment and garnishment.
Contact an experienced creditor defense attorney to answer the complaint and engage in Discovery with the intent to still save up money and settle, or spend the money on the attorney to take the case all the way to trial causing the economy of scale for witnesses, travel etc... to tip in my favor over a balance that low and perhaps win the case through a dismissal that would potentially then put the account over the SOL line.
On the debt buyer accounts:
If I had not requested validation, I would as soon as I received any additional written communication. Then I would see what they respond with, if anything.
If there were a case filed by the debt buyers, I would definitely connect with a collection defense attorney and spend the money to fight that off until a potential dismissal and SOL expiration.
If any litigation attempts occurred after the SOL, I would probably work with an attorney once to draft the answer to the complaint as time barred from using the courts, and use that as a template for any other case filed on an account outside the SOL after that.
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and only one is showing as settled and that was back in early 2010 for a small balance card |
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We spoke with a few different attorneys and the opinions were mixed about whether or not it was worth it to fight the suit so we took out the 401K loan. |
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Our mortgage has been 30 days late every month for the last 3 years. |
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We have five children |
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the wording I chose sounded snotty |
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I do love that Cult song! |
I hope that helps.