Death Debt and Collections

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Dealing with the death of a dear loved one is stressful enough without bringing legal issues into the fold. Unfortunately, when a loved one, like a mother, passes away with debt, creditors are often quick to pounce on the family of the deceased to collect their debt.

Do they have a right to collect debt from the family?

People who inherit from a deceased loved one have limited liability. Their liability is limited in most cases to the amount that they inherited, and that is not particularly easy to obtain. For example, a mother who passes away who does not leave an estate or any assets for the creditors to collect on leaves no inheritance for a collector to attach. There is very little that creditors can do, legally, to enforce this debt. For the most part, they are limited to phone calls and letters. For the family, it is an annoyance during a grievous time.

How to get creditors to back off?

Despite the stressful nature of this situation, the burden still falls on the family to provide the correct documentation to the creditors to stop the harassment. The family will need to send documentation to the creditor showing the value of the deceased family member’s estate to be zero. The documentation should also state that the deceased had no assets and quite simply, you are not going to pay. The terms that help are “Cease communications” and “refuse to pay”.

They can’t sue you, but can you sue them?

It is possible that you can sue the debt collectors if they fail to comply after you have sent the proper documentation, and demanding that they cease communications with you. When they do fail to comply, they are in fact, in violation of the Fair Debt Collections Practices Act (FDCPA) and you can sue them. If the debt shows up on your credit report, you will have to jump through all of the necessary legal hoops, but that is also a violation of the FDCPA and may also violate the Fair Credit Reporting Act (FCRA), which also gives you another basis to sue them. Consult with a consumer protection attorney to go over options for pursuing this case.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

If you are not a Virginia Resident, click here to find a lawyer near you.

Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230

Old International Student Loans

International Dilemma: I owe the Swedish government for my student loans. Do I still have to pay?

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Tackling legal challenges can get a bit precarious when they are international. There are many factors to take into consideration, like the laws of that foreign country and how they translate into the U.S., statute of limitations and the validity of the actual debt in question.

Collecting the Debt

This debt is over 15 years old, and no payments have been made on it. We will discuss the legal obligation to pay in this post, only, and not the moral obligations of payment. In this case, the creditor would have 2 choice- to sue in Sweden to enforce the debt and then domesticate the judgment here under the Uniform Enforcement of Foreign Judgments Act, or sue here. As long as the underlying judgment is valid in Sweden, the Swedish creditor could move to domesticate the judgment. The Swedish government would, however, need a court order to legally enforce this judgment in the U.S.

Follow the Rules

Though the Swedish government may be able to domesticate this judgment, the collectors for the loan still have to follow all of the rules of the Fair Debt Collection Practices Act (FDCPA), including time to bring a suit, avoiding abuse, false statements or unfair actions. They would also need to comply with the Fair Credit Reporting Act, as this debt is too old to include on your credit report; it is 15 years old and past the statute of limitations for credit reporting.

Questions

There are still many questions to be answered on the validity of this debt as we are unsure of the statute of limitations on student loans in Sweden. It is possible that this debt is invalid, if in fact, the Swedish statute of limitations has passed. However, if this debt is valid and the Swedish statute of limitations has not expired, the creditor can sue in the U.S. They cannot, however, garnish your wages without a judgment because it is not a U.S. Federal student loan.

A consumer protection lawyer can help sort out the details of this case.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

If you are not a Virginia Resident, click here to find a lawyer near you.

Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.592.0792
You can fax us: 804.234.1159
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
1650 Willow Lawn Drive
Suite 201
Richmond, VA 23230

Collection Agency Threatening Legal Action From Over 8 Years Ago

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There are several different perspectives to explore in this case.

Defense Against the Collection Lawsuit

The first issue is the length of time that has transpired since the original debt in the case. The longest statute of limitations in Virginia is 5 years. Because the debt is beyond the statute of limitation, you no longer have a legal obligation to pay. But you need to remember that the statute of limitations in Virginia is an affirmative defense, not a complete umbrella to a lawsuit. As a result, the threat is still real. They can sue, but you have a defense. You should plan for that defense.

Fair Debt Collection Practices Act

The collector in this case has violated the Fair Debt Collection Practices Act (FDCPA) by threatening to sue past the statute of limitations. A threat to sue, when there is no right to sue, or there is a legal defense that will defeat the claim that the collector knows of, is a threat to take an action that is not permitted.

Kimber vs. Federal Financial Corporation

A similar case was filed in the Alabama District Court in August of 1987. In the case, Ms. Kimber sued the collector for attempting to collect debts from her and other Alabama residents after the debt had passed the statute of limitations. She argued this case not only because her creditor threatened to sue without giving proper notice, but also because the debt in question was considered “stale,” beyond the Alabama statute of limitations. In such a case where it seems pretty apparent that the creditor has violated the FDCPA, it is prudent that you hire an attorney to review your case

For an additional examples of similar FDCPA cases, check out Freyermuth vs. Credit Bureau Services.

But should you pay anyway?

The next question in this case to consider – does this debt actually belong to you? While the statute of limitations on this debt may have already expired, if you have the money, you should consider paying, because it is the right thing to do. This is isn’t a legal obligation, just the right thing to do. But you need to consider the credit reporting consequences. It is possible that by paying the debt, that the collector may report that the debt is now paid, or that you made a payment, restarting the time the debt can be reported on your credit report.

Should creditor be reporting debt on your credit report?

Lastly, it is also important to investigate whether or not the creditor is actually reporting this debt on your credit report. Two issues may arise if this is the case: 1.) If the debt is false, then you need to follow the necessary procedures with your creditor and the credit bureaus to dispute this; 2.) If the debt is not false, but is past the statute of limitations, you may also dispute.

In either case, it is good to hire an attorney to map out your options.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

If you are not a Virginia Resident, click here to find a lawyer near you.

Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230

Credit Reporting And Duty To Pay

Question: Do I have to pay even if a credit reporting agency has done an investigation and deleted the bills off my credit report?

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There is no cut and dry answer to this question.

The reason why there is no cut and dry answer is because there are many different variables that can dictate whether or not you are still responsible for a debt, even though it has been deleted from your credit report. Strangely enough, credit reporting and duty to pay are completely unrelated.

The Credit Report side

Companies are not required by law to report your debt to the credit bureaus, which means that you can still have an outstanding debt with them even though it is not on your credit report. Therefore, you may still have an obligation to pay. Before making a rash decision about which debts you will and will not pay based upon what is reported on your credit report, make sure you fully understand your duty to pay. There are two types of duties to pay.
Further, even if you do have to pay, there is a time limit for them to report the debt- typically 7 years.

The Duty To Pay

The first is quite simple; it is your moral duty to pay. A moral duty to pay is simply an obligation to pay a debt because it is the right thing to do and it has no expiration date.
A legal duty to pay is a little more complex. A legal duty to pay has an expiration date or statute of limitations. The statute of limitations on your debt will vary depending upon the debt. Here is a blog post on statutes of limitations.

The Difference is Important

Why is it important to understand the statute of limitations for your legal duty to pay? It is important because you can be sued and taken to court within the statute of limitations, even if the company is not reporting your debt to the credit bureaus. So, just because your debt has been removed from your credit report does not make you immune; you are still responsible for that debt, both legally for a period of time and morally forever.

What To Do With a Debt

So, if you have debt that you owe that is not being reported on your credit report, you may need to deal with it anyway, if the statute of limitations has not expired. If a judgment is entered against you, then that judgment is on your credit report for 10 years.
So, as you are investigating the debts, both on and off your credit report, the questions you want to ask are the following:
• Is it really your debt?
• Is it in the statute of limitations?
Once the statute of limitations is up for your debt, your debt collector can no longer take you to court; it has expired. If a debt collector is trying to collect a debt from you that is not yours, you might want to consult an attorney to learn more about your rights and options to take this case to court.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

If you are not a Virginia Resident, click here to find a lawyer near you.

Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230

What is the Statute of Limitations on a debt in Virginia

What is the Statute of Limitations on my debt?

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A number of people have asked what the statute of limitations is on debt in Virginia. The answer is both simple and complex.

A contract which is in writing has a 5 year time from the date the plaintiff first has the right to sue, called breach.
A contract which is not in writing (oral contracts are valid in Virginia) which includes promises and other agreements, is 3 years from the date the plaintiff has the first right to sue.

Here is where it gets interesting.

Some contracts are subject to a different Statute of Limitations. If the contract is for the sale of goods, it would be subject to a special term, under the Virginia Uniform Commercial Code, which is 4 years.
And not all oral contracts are enforceable. There is another law, called the Statute of Frauds (which is correctly called the Statute for the PREENTION of Frauds), in which case some agreements, even though they should be enforceable, are not enforceable. Some examples are contracts for more than $500.00; contracts which cannot be performed in less than 1 year, and contracts for the sale or transfer of land. There are other things that are covered by this statute, but those are the most important here.
A contract under seal has a 6 year statute of limitations. But what does a contract under seal mean? It means that where the signature line is that it says SEAL. This is not a notarized contract.
A Notarized contract is a contract with a special kind of witness- a Notary- who witnesses your signature. A Notarized contract should still have a 5 year statute.
Except that not all written documents are a contract in writing. A written contract has all the terms and conditions on its face, or are easily found. For example, a contract that says that the interest rate is the highest prime rate in the Wall Street Journal on the first Monday of each month, is still a contract in writing. A contract that says that the terms can be changed by one party at any time by giving notice 30 days in advance is NOT a contract in writing, IF anyone makes a change.

But what gives the right to sue?

The right to sue come when a party breaches the contract. Typically, it is the first time a person fails to make a payment when due. However, some contracts have other terms that can trigger default, or quasi-default. Examples include if you go over your credit limit. This may be a default, or the contract may specify that if you go over the limit and do not pay it down to under the credit limit within 30 days that would be default. Turning in the collateral MIGHT be a default,

Can the statute of limitations be extended?

Sure. If the time to sue has started, under certain circumstances, a payment may restart the statute of limitations. An unconditional promise to pay in writing will restart the statute of limitations. An oral promise to pay will not restart the statute of limitations.

What if the contract calls for the law of another state?

Virginia law says that the time to sue is the shorter of the time in Virginia or the law of the state of the contract. So what law applies to the statute of limitations? If the agreement says that the law is that of Delaware, and Delaware says the statute is 3 years, then 3 years would be the longest it could be.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

If you are not a Virginia Resident, click here to find a lawyer near you.

Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.592.0792
You can fax us: 804.234.1159
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
1650 Willow Lawn Drive
Suite 201
Richmond, VA 23230

What is Statute of Limitations To Garnish Wages or Bank Accounts

First of all, let’s formally define statute of limitations once again. It is the period of time allowed to file a lawsuit. The length of time assigned for a statute of limitations varies depending upon the underlying lawsuit. For example, in the state of Virginia, the statute of limitations for personal injury is 2 years; for contract in writing, 5 years and for contracts not in writing, 3 years; and for repossessions of consumer goods, including cars, 4 years.

A garnishment, however, is a secondary proceeding in court based upon the first judgment which is filed after the initial lawsuit. Judgments can be filed anywhere from 6 months to 5 years after the initial lawsuit. The statute of limitations on garnishment is also variable depending upon the court in which the case was recorded. If the underlying judgment is recorded in general district court, then the statute of limitations is 10 years from the date of the judgment.

However, if the judgment is recorded in circuit court, the statute of limitations is 20 years from the date of the judgment. Here’s where is can get a bit tricky – your case can be filed in a general district court, yet still be recorded in the circuit court, subjecting you to the 20 year statute of limitations on your garnishment.

There is a way to determine if your case has been recorded in either the general district court or the circuit court. Your garnishment will be assigned a case number. If your case number begins with the letters GV, followed by a series of numbers, then your case was recorded in general district court. If it begins with the letters CL, followed by a series of numbers, then it was recorded in circuit court.  Not all cases do  have to be recorded in the circuit court. Parties have the option to file in circuit court if they feel they need more time, but it is only an option.

Virginia state law stipulates that an entity can only perform one garnishment at a time for a maximum of 6 months. However, there is no limit on the amount of times a company can garnish you. One thing, however, is unclear, and that is exactly what happens if a garnishment is issued at such time that it violates the statute of limitations timeline. For example, let’s say your case was recorded in general district court, so your statute of limitations is 10 years from the date of judgment. The company issuing your garnishment decides to do so 9 years and 11 months into your timeline. If this occurs, you may, in fact have a case for dispute. Now is the time to hire an attorney.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES. 

YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation.  They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

If you are not a Virginia Resident, click here to find a lawyer near you.

Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230

Old debt with new Garnishment?

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Old debt with a new garnishment?

A number of people have asked how long a creditor can issue a garnishment on an old debt.

WHAT IS A GARNISHMENT?

A garnishment is a court order for a third party to turn over property that belongs to the debtor to the creditor.
What does that mean in English? Someone else is holding something that belongs to you, like for example a bank holds your money, or an employer holds wages that are owed to you. A court orders that the bank or the employer pays some or all of the money that is owed to you to the creditor.

But there is a requirement that the creditor have a judgment. A garnishment is a secondary proceeding or order after the judge lowers the hammer and says that you owe the money.

Once there is a judgment, the creditor is in control. They can do lots of things. They can request a garnishment to be issued by the court, or levy against assets, attach cars, houses. But they can attach wages or bank accounts.

The judgment has its own statute of limitations. A judgment in General District Court is good for 10 years, renewable for 10. If the judgment is recorded in Circuit Court, or originates in Circuit Court, it is good for 20 years.

But all this assumes that the judgment is valid.

How do you know if the judgment is valid? There are a number of issues,

1- Was the judgment served or did you get notice that it was pending? In Virginia, you do not need to be “served” by a process server, service is done by “nail and mail” service. They attach a copy to the front door of your last known address, and mail a copy, regular mail to your last known address.
2- Are you the named defendant? Did they sue you or someone with a similar name?
3- Was the debt within the statute of limitations?
4- Do you have a defense to the claim?

Only after you have reviewed all the factors, can you go back and attack a judgment.

What can you do with a garnishment?

There are 4 options with garnishments.

1- You can do nothing, and let the creditor collect their money through the garnishment.
2- You can try to negotiate with the creditor and either settle the debt or make payments that are better for you.
3- You can get the evidence that allows you to attack the underlying judgment, and “un-do” the judgment, and fight the debt.
4- You can always file Bankruptcy.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

If you are not a Virginia Resident, click here to find a lawyer near you.

Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230

13 Collections Myths BUSTED

13 COLLECTION MYTHS BUSTED

Many people believe the common myths of collections. Most of them are myths that are as effective as an ostrich sticking its head in the sand.  Don’t be an ostrich.

  • 1.     If I make a payment they will leave me alone.

FALSE.  Usually, if you make a payment, it means that they know that you have some money, and will pay more.  They will bother you more, not less.

  • 2.     If I make any payment at all, they cannot sue me.

FALSE.  In fact, making a payment may restart an expired statute of limitations. You may make it so that if they could not sue before, they can sue now.

  • 3.     If I settle, it will improve my credit rating.

FALSE. If you make a payment, it may decrease your score, because there is now recent activity on a negative account.  Eventually, the score may go back up, but for the short term, the score will be lower.

  • 4.     All debt collectors sue.

FALSE.  Most debt collectors do not sue. Check to see if the debt collectors are located in your state of residence (we are talking about Virginia here), and if they are licensed as a lawyer there. If they are not licensed in your state, then they cannot sue, they cannot get a judgment, and they cannot attach your wages or bank account.

  • 5.     If I get sued, I can lose my house or my car.

USUALY FALSE. There are circumstances where people can lose their house or car, but those are relatively rare. Cars have an automatic exemption in Virginia for $6,000.  Houses do not have an automatic exemption, but most homes do not have enough equity in them to be at risk.

  • 6.     If I get sued, my spouse’s wages can be garnished.

FALSE.  Only you are responsible for the debts that you owe.  Virginia is not a community property state, so spouses are only responsible for the debts that they sign for, or are for medically necessary expenses.

  • 7.     If I get sued, my spouse will be liable for my debts.

FALSE.  Only you are responsible for the debts that you owe.  Virginia is not a community property state, so spouses are only responsible for the debts that they sign for, or are for medically necessary expenses.

  • 8.     If I get sued and don’t go to court, they can’t get a judgment.

FALSE. You only are entitled to get notice and have a fair hearing.  If you do not show up, then it is your problem.

  • 9.     If I move and don’t tell them, they can’t sue me.

FALSE.  A creditor can sue and get a judgment based on service at an address you used to live at, if you do not keep them in the loop about where you live.

  • 10.If they get a judgment, my entire wages can be attached.

FALSE.  Under Federal law, your wages can only have 25% taken, except for certain debts, like taxes and child support.

  • 11.If they get a judgment, they can take my social security money.

FALSE. Social Security Disability and Supplemental Security Income cannot be taken, even if it is in your Bank account. In fact, the Federal Regulations have been recently changed, and the bank must protect, automatically, 2 months of SSD or SSI benefits.

  • 12.If I don’t pay, they can put me in jail.

FALSE. Almost all debts, including credit cards and payday loans, are civil matters, for which the failure to pay is not criminal. It is not fraud to fail to pay almost any debt.  Of course, there are exceptions, for example, child support and taxes can put you in jail, and a payday loan taken on an account that was closed when you took out the loan.

  • 13.If my car is repossessed, I don’t owe any more money.

FALSE.  Under the laws of most states, you owe the difference between the balance of what was owed and the amount they got when they sold the car.  Of course, there are some exceptions, and time limits.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES. 

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

OUR FEES: Our fees are controlled by the local rules and your situation.  They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230

What is the difference between being sued by an original creditor and being sued by a debt buyer?

What is the difference between being sued by an original creditor and being sued by a debt buyer?

First, lets discuss the difference between a creditor and a debt buyer.

A creditor is the original party to whom the money is owed.  Examples include Capital One, CitiBank and Discover Card.  When you open a credit card with Capitol One, Capitol One is the original creditor. They often will hire a lawyer to represent their interests in court.  This does NOT mean that it has been sold, but that they decided not to represent themselves in court.

A debt buyer is where a creditor has sold the account to another agency, who them collects or sues.  Examples here would be a debt originally owed to Wells Fargo, in which Midland Funding now owns the debt. Midland is a debt buyer.  Wells Fargo is an original creditor.

Now we shall discuss what happens with a lawsuit filed by each.  Note that this applies ONLY to cases that get to trial.  If you default, the judge will rule against you in most cases.  The exceptions are few.

A lawsuit filed by an original creditor requires that there is some showing of relationship between you and the creditor, and that you owe them money. An example is that you opened a credit card, and used the credit card, and there is still a balance due.  Another example is buying on a store card.  You go in to the store, buy products, and they sell them to you on credit. These might be called contracts or open accounts, depending on your jurisdiction.

A lawsuit filed by a debt buyer requires a higher level of proof.  It requires everything that a creditor lawsuit requires, and proof that the debt buyer now owns the account.  But the debt buyer cannot testify that you opened the account, and they cannot testify that there is a balance still owing. That would be hearsay, which is a statement (other than one made by the person while testifying at the trial or hearing) offered in evidence to prove the truth of the matter asserted.  (in this case, this definition comes from Federal Rule of Evidence 801, but similar definitions can be found in most states rules of evidence or case law.)

So somehow, the plaintiff must prove that you opened the account, and left a balance.  And then they must prove that they bought that account.  All without using hearsay.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

OUR FEES: Our fees are controlled by the local rules and your situation.  They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd. Suite 102
Richmond, VA 23230