Debts In A Divorce Decree

QUESTION: I financed a car with my ex-wife. The divorce decree states that the vehicle and the debt for it are hers.

She has not been paying on the auto loan, and it is hurting my credit. Do I have any legal recourse?

ANSWER: From a credit/debt rights perspective: Notifying the lender and/or the credit bureaus that your ex spouse was given the car and the car note does NOT relieve you from the liability. Family courts and divorce-court judges cannot force the bank (not a party in the divorce lawsuit) to agree to drop you as liable on the car note. Unfortunately, most divorce attorneys do not go into that sort of detail with their clients.

The only way you can save your credit is by making the payments yourself or encouraging your ex-wife to sell the car. If you make the payments yourself, you will probably have recourse to go back to family court and demand that your ex-wife reimburse you. If you convince your ex-wife to sell the car, any deficiency between the amount owed less the amount recovered through the sale is still your liability.

I would strongly recommend you do everything in your capacity to avoid the vehicle being repossessed. From a credit/debt perspective, a repo is even worse than a late payment or two.

On another note: if the vehicle does get repossessed, you should anticipate getting notice from the lender before the car is sold. That notice is required by Texas law and you should allow a consumer rights attorney to have a look at it to determine that your rights have not been violated. The Texas Finance Code has some terrific relief (damages) for consumers when that letter following repossession is defective.

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 (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 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.

How To Proceed With Payment Request Letters Totaling $10,000 From A Collection Agencies

It is important to recognize and understand that if you ever find yourself in such a situation your credit score is probably very low. Thus it will be extremely challenging obtaining the best interest rates for any financing (if you even qualify). At the same token, a lot of the very small debt out there (under $1,000.00) ends up on the debtor’s credit report, ends up in collections, but does *not* end up in a lawsuit. While I do not encourage debtors to avoid paying their bills, it is also clear that one may not be in a position where the debtor can legitimately afford to pay the delinquent bills. The negative lines on a credit report will slowly age, have less impact on the credit score, and after 7 years they will come off altogether.

If one happens to have any particular debt that is significantly over $1,000.00, then there is the possibility of being sued for that debt.

If you ever find yourself in such a situation, it is strongly recommended that you keep track of all debt collection calls that are made to you or anyone else. Most consumers are unaware, that they has debt collection rights. You can download a debt collection call log from my law firm’s website to help keep track of callers. Also, whatever debt collection mail that is received should be reviewed by an attorney. Keep in mind that often times debt collection letters have violations in them, and the consumers are really not knowledgeable enough to notice. Also keep in mind that most consumer rights lawyers will not charge an un front fee to handle debt collection abuse; federal and state laws allow consumers to collect their attorneys’ fees from the “bad guys.”

You should obtain a copy of your credit reports. They are available for free, once every year through It will enable you to have a complete picture of your debt.

Here are some additional suggestions to bear in mind:
1. Do not ignore the collection letters. Keep them; share them with a consumer right’s lawyer. You are welcome to send them all to my office so that I can advise further.
2. Sometimes it is worth considering calling the debt collection agencies to possibly work out a payment plan, but only after you have shared the collection letters with an attorney in the field of consumer rights. It is important to understand that sometimes paying one collector will open a jar of worms with others who are constantly looking at your credit report and probably wondering, “why is this person paying that debt, and not this one?”
3. $10k worth of debt is probably not enough to make bankruptcy the best option.
4. Bill consolidations is hardly ever the best way to go. Nevertheless, one should consult with an attorney to determine whether the debts may ultimately end up in litigation. If that’s the case, then debt consolidation may operate to prevent an imminent lawsuit.

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.

Do I need a debt attorney?

QUESTION: Do I need a debt attorney? Is there a limitation to before a medical bill is to old to collect? Does that include if the hospital has sold off my sons bills to a collection agency? He had a seizure in the water, was care flighted to the hospital and was there a few days. We didn’t have insurance, so we have the bills. The hospital didn’t received copies of the bills even after we requested them. That was 5/3/2011. Now we have a “Shafritz and Assoc, PA” calling us to settle pretty much in full. Does the time frame still hold true?

RESPONSE:The statute of limitations is 4 years. The concern that I have for you relates to the collection agency. It is not listed with the Texas Secretary of State as a licensed debt collector. If you pay them anything, you are risking that you are wasting your money, and that the statute of limitations will start all over again for a new 4 year period.

Under federal debt collection laws, a third party debt collector must send you something in writing within 5 days of the first phone call. If they have not already sent you something, then ask for a letter with an explanation of the debt. If they have sent you something in writing, you may want to share that letter with a consumer rights attorney to determine if your rights have been violated. Federal debt collection laws allow you to collect an award of up to $1,000.00, as well as other damages and your attorney fees. (That’s the reason many consumer rights attorneys can handle debt collection abuse cases on a contingency.)

Also, I would suggest that you check your credit bureau reports to see whether they are illegally reporting this debt to the three main credit bureaus. You can pull your credit reports for free through That is the only website that has the stamp of approval of the federal trade commission.