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.

 

Actions That Can Be Taken After A Default Judgment

QUESTION: I have a default judgment, accounts frozen, money taken. There’s a balance, what actions can be taken?

The default judgment was $5,947 plus 5% annum over 2yrs court cost and receiver attorney fees 25% added to total up @ $10,284.. $6,411 was taken from frozen accounts leaving a balance of $3,878 on judgment. Can this be negotiated or settled for less…need legal direction…..

ANSWER: While you can certainly work with the judgment creditor to settle the judgment yourself, I would encourage you to consult with a consumer rights attorney before you proceed alone. Your rights may have been violated in the way that the judgment was taken, the way that the judgment is now being collected, and with respect to your credit reports. I would especially encourage you to talk to a lawyer if the judgment was taken by a Third-Party Debt Buyer (not the original creditor). 

Finally, you should not agree to anything negotiated with the judgment creditor unless it is in writing. 

I have an important follow up question for you: were you served with papers when the lawsuit was originally filed? If not, you should consult with an attorney to have the judgment completely unwound.

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.

Ex-Spouse Defaulted On Car Payment: What To Do?

QUESTION: My ex husband had defaulted on his court ordered mediated agreement of my car payment for two months. What should I do?

Our divorce was finalized in Austin, Texas on January 11, 2013, but we both live in different areas of Harris County.  He has been late off and on since our divorce.  I also struggle getting my spousal support.

ANSWER: I will answer this question from a consumer debt/credit perspective. If you want to keep the vehicle and you are trying to maintain good credit, your fastest and most secure way to do that is to make up the missed payments yourself. It will probably be cheaper for you to pay your way through the vehicle then to deal with the repossession costs. Unless your finance company is especially nice (which most are not) they are probably already entitled to repossess the vehicle. Getting it back may mean that you will have to pay the full amount of the vehicle (it’s called accelerating the payments.) In other words, the finance company is not obligated to allow you to simply come current.

I realize that if you start making monthly car note payments yourself, your ex-husband may try to assume that you are taking over that responsibility. I would suggest you carefully document every communication with the finance company- 1) asking how many payments are behind; and 2) finding out if payments have been made each and every month. Ultimately, you will want to be able to show the family court that you would not have made the payments, except that you were at risk of losing the vehicle. If the vehicle is ever repossessed, make sure the finance company has your correct address. They are obligated under Texas Law to send you 2 notices if they sell the vehicle to another person. You are welcome to send any correspondence from the lender to my office for us to review, whether it is pre- or post- repo.

You should consult with a consumer rights attorney regarding all issues on financing, repossession, and your credit score. You should consult with a family lawyer regarding a motion to enforce; you will want to get a judgment against your ex-husband for payback of the monthly note payments and other obligations he is avoiding.

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.

Debt Collection Tactics

Debt collectors are notorious for engaging in what can often be described as abusive and harassing tactics in order to collect a debt. Some debt collectors will even go as far as threatening to come to your home or place of employment to serve you with lawsuit papers. In my experience, these particular debt collectors are the worst of the worst, and most often they usually are not even licensed to collect debt in Texas.

If, however, the party that was calling happens to be a legitimate debt collection agency, then one would probably be within their rights to sue them for violations of the federal and Texas debt collection laws. My office has handled many suits against abusive debt collectors. The laws allow the consumer to recover damages, in addition to all of the attorney fees and costs incurred while suing the debt collector. Many consumer rights lawyers will handle debt collection abuse cases on a contingency basis.

Before proceeding with a lawsuit, it is advisable pull your credit report to determine if the particular collection agency in question is listed. Depending on when the account in question went into default, it may or may not appear as a negative comment on your credit report. A free copy of your credit report can be downloaded once every year from www.AnnualCreditReport.com. Any suspicious lines listed on your credit reports should also be taken up with a consumer rights attorney.

Finally, if you have the name and/or phone number of the collection agency, and especially if you have any recordings, feel free to send that information along. My office will gladly do some research to determine if the collection agency is legitimate.

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.

…And You Thought You’d Laid That Debt to Rest

Here’s the situation:  You might have found yourself named as a defendant in a lawsuit trying to collect an old debt.   Like many defendants, you might have even agreed to a payment plan or some sort of settlement for less.  Quite often, debt buyers will agree to significant discounts in order to settle a debt.  You might have felt relief that the debt was resolved, with hopes that you would never have to deal with it again.

….Until you pick up your mail to find a 1099 Forgiveness of Debt Income Tax form issued by the debt buyer.  This happens quite frequently – – not just by debt buyer plaintiffs, but by original creditors, too.

The question is:  do you actually owe Uncle Sam taxes for the debt you were forgiven?

CreditCards.com recently added an excellent overview article on exceptions to tax liability on forgiven debt.  Anyone who has received a 1099 form for forgiven debt as income should educate themselves, rather than assume that they actually owe taxes.  Read 6 exceptions to paying tax on forgiven debt.

Read more: http://www.creditcards.com/credit-card-news/six-exceptions-paying-tax-forgiven-debt-1282.php#ixzz2swjqAFzG .

Please note:  we are not tax advisors.  Consult with a tax specialist for your particular situation.