Statute of Limitations On Unsecured Debts

QUESTION: I understand there is a statue of limitation of 4 years to collect unsecure debt (say, credit card debt). The creditor sold the debt to a collection agency at the end of the 4th year of the debt. My question is would the clock reset on this debt account? I meant a 4 years statue of limitation starts all over again with the new collection agency? what if this collection agency now sold the debt to the second collection agency after number of years unsuccessfully to collect, and the circle repeats itself. What rights as a consumer of unsecure debt has to get this old debt off the record for good?

ANSWER: It sounds like your question relates to credit reporting more than potential lawsuits to collect the debt.
The clock for the statute of limitations on debt starts at the date of default. (Some creditors like to argue the clock starts from the date of chargeoff – -180 days after default.) Unless YOU make a payment, nothing else will restart that clock.
The statute of limitations to collect the debt in court is 4 years.
The amount of time that the debt will appear on your credit report is 7 years from the date of default. It makes no difference how many times the debt was bought and sold, it is still seven years. If you make a payment to any debt collector or debt buyer along the way, then the clock starts all over again.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

 

Defaulted PayDay Loan

QUESTION: Can I be sued in the Texas for a defaulted online payday loan?

I taken out a few payday loans online and pretty much got in over my head paying them back ! Can I be sued in Texas?

ANSWER: Most payday lenders do not sue in Texas. Having said that, they are certainly entitled to sue you if you defaulted on a loan.

I would be curious to know who is threatening the lawsuit and whether they are a “usual suspect” – – the kind of payday lender that actually does file suit in Texas. If they are not customarily in court, then their threat is illegal, and possibly a violation of either the Texas Debt Collection Act and/or the Federal Fair Debt Collection Practices Act. The collection industry for payday lenders is infamous for being abusive. I would suggest you keep track of all collection phone calls and keep all of the collection letters.

If the threat to sue is in writing, I would suggest you forward a copy to a consumer rights attorney. If the threat to sue is made verbally, you might still want to talk to an experienced consumer rights attorney who can do a bit of research and find out whether this collector is blowing smoke, or not.

Finally, you might want to have a look at your credit bureau reports through www.AnnualCreditReport.com (That is where you can get your credit reports for free.)

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

 

Not Showing Up To A Civil Suit Court Appearance

QUESTION: What would happen if I do not show up to a hearing concerning credit card breach of contract?

I am a house wife who made regular payments until my husband stopped giving me any money to pay on credit card and anything else at all . I have no income at all to work with and had to move out of our house and in with family just to stay alive due to him canceling my medical insurance and not buying food for the house now I am being sued.

ANSWER: The collection industry can be ruthless. They don’t care what your circumstances: if they can legally collect against you, they will.

Depending on all of the circumstances surrounding your finances, you may want to consider bankruptcy. Bankruptcy will stop the lawsuit against you dead in its tracks.

Otherwise, I suggest you do everything possible to defend yourself. If you/family can afford to hire a consumer rights attorney, that’s your best bet. The creditor/plaintiff is likely to get a judgment against you by default. Even if you cannot afford to pay for the judgment now, the judgment-creditors are patient: they will wait until you find employment, re-marry, gain an inheritance, or win the lottery. Meanwhile, a judgment on your credit reports can be devastating. You should do everything you can to avoid having a judgment entered against you.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

 

Getting Sued Over A Debt Already Paid

QUESTION: A collection agency says they’re going to sue me over a debt I already paid, I don’t know what to do.

I have a few emails of paid in full, but a couple of the companies didn’t send me anything, and when I tried to call them it says it’s no longer a working number.

ANSWER: First of all, I would suggest that you pull a copy of your credit bureau reports. You may obtain a free copy through www. AnnualCreditReport.com It is the only website that the Federal Trade Commission has approved of for a free credit report. You might find useful information on that website. Also, do you have old bank statements or cancelled checks to prove you paid?

If a third party debt collector is threatening to sue you on a debt that has been paid (whether you can prove it right now, OR NOT) then it seems your rights have been violated. I would suggest you contact a consumer rights attorney who has experience going after abusive debt collectors. They will probably want to look up this debt collector that is threatening to sue you. Specifically, they will want to see if this debt buyer is a common litigator; and also, they will want to find out if this debt collector has a surety bond on file with the Texas Secretary of State. If they do not, then this whole thing sounds like a scam- an illegal scam.

Keep in mind that the federal Fair Debt Collection Practices Act allows you to collect a statutory award, other damages, as well as your attorney fees. That is the reason why many consumer rights attorneys do not charge clients up front for their time. They can get paid for by the defendants. I strongly suggest you get your payment history together and call a consumer rights attorney licensed in Texas.

This information is provided for educational purposes only. There is no attorney-client relationship with Karni Law Firm until a contract is signed by the attorney and the client.

 

Recording Conversations with Debt Collectors

It is important to know that in some states you have a right to record conversations.

The laws differ from state to state.  If you do not reside in Texas, then you should do some research to find out what the law are in your state.  In Texas though, only one party needs to be aware of the recording.  Even keeping that in mind when recording a conversation, one must also consider the recording laws for the sate where the debt collector is calling from.  If THEY are in a “two-party” state, you must disclose that you are recording them.   In a small number of two-party states, both parties need to actually consent to the recording.

Why is this important?

Sometimes, it is the only way for consumers to prove that their rights have been violated by rogue bill collectors!

All that being said, technology has come a long way.  There is no longer a need to purchase a digital recorder or use your old cassette tape recorder.  There is an Android SmartPhone application called AllCallRecorder that you can download and set to record conversations from certain numbers automatically.  It’s great, it will record the entire conversation.  Iphone users have similar applications available to them, FourTrack and Recorder 10 are two of them.

This blog covers consumer rights as they relate to Texas State law. If you reside outside of the State of Texas, you should consult with a local attorney.

Collectors calling you repeatedly can be harassment.

If a debt-collector calls you at 7 a.m., 10 a.m., 2 p.m., 5 p.m. and at 9 p.m. on the same day, and more so if this happens daily, it may constitute harassment in the eyes of the Federal law.

It may be a violation of the FDCPA.  By law, debt collectors are only allowed to call you between the hours of 8 a.m. and 9 p.m.  Calling before or after those hours is a violation.  Also, calling repeatedly, is seen as an intent to harrass.  Keep a call log, write down every time you receive a phone call from the collector and what time it came in.  You can download a sample call log by visiting:  https://www.texasconsumerdebt.com/uploads/debt.collector.call.log.2009.pdf.   If you are receiving [what you think are] harrassing phone calls, you should contact a local consumer attorney [which you can find at www.naca.net] and find out what you should do.

This blog covers consumer rights as they relate to Texas State law. If you reside outside of the State of Texas, you should consult with a local attorney.

Arrest Threats? Because you defaulted on that auto loan years back?

The statute of limitations on most debt is 4 years after the date of default under Texas law.  When attempting to calculate this date, one would go back to the date of last payment on the account, count 30 days and that would be the default date.  The original creditor or any third-party to whom they may have sold the account has 4 years from the date of default to sue on the debt.  This is the first thing that you must consider when being contacted on an old debt.

If you do not pay, the creditor or debt buyer can file a civil lawsuit against you.  If the debt is past the 4 year statute of limitations, you might be able to avoid a judgment.

Unfortunately, some consumers are unable to pay.  The creditor or bill collector might use harsh collection tactics to try to collect, especially if the debt is too old for a legitimate lawsuit.

Collector:  Ma’am, you have owed this debt for 4 years now,  I realize your husband is away working and you are alone with the kids, but if you don’t pay this debt… I’ll have you arrested, your children will go into foster care and you’ll never see them again, do you want that to happen?

^ This actually happened to a lady in Houston, Texas.  This is a serious violation of the FDCPA and the collection agency that was responsible for this ending up having to pay this woman and her attorney for all the mental and emotional anguish they caused her.

If a debt collector has been threating arrest due to your non-payment of a debt, contact a consumer attorney at www.naca.net .