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.

 

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.

 

Removing A Dismissed Lawsuit From Credit Report

QUESTION: If you were taken to court for a broken lease and the case was dismissed is it possible to get it off your credit report?

My boyfriend left his old apartment a few years ago on account of his roommate who was unable to pay the full rent and left soon after. They were taken to court but the case was dismissed. Now we’re trying to get a house but the broken lease is still on his credit report. Is it possible to get it taken off because it was dismissed or does he still have to pay it?

ANSWER:The detail that is missing: what sort of dismissal was it? Your boyfriend needs to send a letter to the credit reporting agencies that are listing the broken lease. He will probably need to send a copy of that same letter to the past landlord disputing the negative information. If the dismissal documents from court are favorable to your boyfriend, he should attach them to the dispute letter. He should probably attach the dismissal documents in any event.

Your boyfriend should be gathering information about being declined or rejected from the new housing opportunity. In case the derogatory information on this credit report needs to be removed, and if it is NOT removed, then your boyfriend will have terrific grounds for a lawsuit against the past landlord and/or the credit reporting agencies under the Fair Credit Reporting Act.

If he needs assistance going through the dispute process, he should contact an experienced attorney. Most attorneys do not charge a fee for helping with the dispute letter writing process, or the resulting litigation, since the federal laws allow for fees to be paid by the defendants.

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.

 

Sued By A Junk Debt Collector

QUESTION: Sued by a junk debt collector for $1500 on unsecured CC debt from 2011.  This clearly seems to be an attempt to get a default judgment by an attorney who expects that I will not answer. I’ll pay $250 to any licensed TX attorney who will answer on my behalf in the expectation that the junk debt collector will abandon hope due to the presence of an attorney and the weak claim. I seem to be one of many thousands of people who received court docs today judging by the quality of the summons. I’ve been doing research and this seems very easy to defeat. I’m wondering whether or not I should even bother to research how to defeat this when there might be an attorney willing to accept $250 to do it for me.

Last payment on the card was March 19th, 2011. I was served by someone in a $200 car on March 26th, 2015. The lawyer lives 300 miles away. The summons is very sketchy looking.

ANSWER: I don’t know who sued you and who their lawyers are. The debt buyer industry has been empowered over the last 2-3 years for a whole host of reasons. Yes, they may simply be interested in obtaining a default judgment. On the other hand, I have had many debt buyers – the likes of Midland Funding, Portfolio Recovery Associates, and many others up put a fight, even for very low balances. Their attorneys are in court with huge dockets all set for the same day: it is unlikely they would be coming to court for your case only. Plus, if this is a lawsuit in the Justice of the Peace court system, then the Texas Rules of Civil Procedure are severely relaxed, making it much easier to obtain a judgment.

You seem to be a terrific negotiator, considering your online bidding efforts here. Any lawyer that makes an appearance for you in an answer is on the hook for the entire case, not just the answer. An attorney who values their law license and their reputation will not get hired for the limited purpose of filing an answer and then asking the court to withdraw from your case. (I may be wrong, of course.)

If you fail to answer the lawsuit, or if you appear – pro se or through an attorney – and lose the case, the judgment will likely be significantly higher than $1,500.00, including interest, fees, court costs and attorney fees. The damage to your credit report, as well as the risk of post-judgment collection would be reasons for you to hire an experienced attorney.

 

Getting Sued By A Pay Day Lender

QUESTION: I have multiple online payday loans out since 2012 can they sue me?

I tried to work out arrangements with them but they wouldn’t settle what I could afford and refuse to give me an address to mail payments to them can I be in legal trouble?

ANSWER:  Theoretically, they can sue you. Generally, however, the payday loan collection industry is notorious for its illegal debt collection tactics. I recommend you consult with a consumer rights attorney, not just to review the terms of the payday loans, but also to determine if your rights have been violated (as well as your credit reporting rights.) 

Many consumer rights attorneys do not charge their clients up front, because many of the consumer rights statutes allow them to collect fees from the bad guys.

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.

What To Include In Your Answer To A Credit Card Lawsuit

QUESTION: I have been sued by a credit card company. I have to file a written answer with the Clerk.

My debt is for 11, 000 dollars. I would like to know what I need to include in the written answer to the district court?

ANSWER: You need to contact a consumer rights attorney for a number of reasons. Firstly, the debt-collection litigation industry is a very-well greased machine in the courthouse. Unless you are an attorney yourself, I would have serious concerns that you may not properly represent yourself.

An experienced consumer rights attorney will also want to review all debt-collection materials and your credit bureau reports to see whether your rights have been violated. In other words, you may have good grounds for a counter-claim.

There are several attorneys in the greater-Houston area that handle consumer rights exclusively. I encourage you to contact an attorney. You might find that you will end up ahead, even if you pay out-of-pocket for representation.

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.

Settling A Credit Card Lawsuit

QUESTION: I am involved in a credit law suit in TX and a court date has been set. I have been offered a settlement by the plaintiff for about 60% of the debt payable over 5 years with no interest. The questions I have are: 1.) Is the offered settlement reasonable or should I ask for a larger discount? The discounted amount is slightly less then the principal. So effectively the discounted amount strips out the accrued interest and the attorney’s fees. 2.) The plaintiff’s attorney has drawn up a Rule 11 Agreement and a Agreed Final Judgment to be filled with the court, which requires me to agree to a full judgment sum. Do I have to agree to the Final Judgment? Do these agreements have to be filled with the court?

ANSWER: You have many valid questions. The debt collection lawyer might be giving you answers, but you should certainly seek counsel. An attorney with experience handling the defense of credit suits should review the agreed judgment before you sign it. 

With respect to your credit reports: the agreed judgment will appear on there, just as any judgment would. Have you considered other routes with the goal of avoiding a judgment altogether? Depending on the amount of debt that is at issue, you might be better off hiring an attorney, or at least consulting with an attorney. There are not just debt collection defense matters here, but also debt collection abuse and credit reporting angles that should be considered.

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.

Settling A Credit Card Lawsuit

QUESTION: I am involved in a credit law suit in TX and a court date has been set. I have been offered a settlement by the plaintiff for about 60% of the debt payable over 5 years with no interest. The questions I have are: 1.) Is the offered settlement reasonable or should I ask for a larger discount? The discounted amount is slightly less then the principal. So effectively the discounted amount strips out the accrued interest and the attorney’s fees. 2.) The plaintiff’s attorney has drawn up a Rule 11 Agreement and a Agreed Final Judgment to be filled with the court, which requires me to agree to a full judgment sum. Do I have to agree to the Final Judgment? Do these agreements have to be filled with the court?

ANSWER: You have many valid questions. The debt collection lawyer might be giving you answers, but you should certainly seek counsel. An attorney with experience handling the defense of credit suits should review the agreed judgment before you sign it. 

With respect to your credit reports: the agreed judgment will appear on there, just as any judgment would. Have you considered other routes with the goal of avoiding a judgment altogether? Depending on the amount of debt that is at issue, you might be better off hiring an attorney, or at least consulting with an attorney. There are not just debt collection defense matters here, but also debt collection abuse and credit reporting angles that should be considered.

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.