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

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

Debt Collectors on Credit Reports

What do you do with a debt collector on your credit report?

We have previously discussed that debt collectors are not permitted to make any false or misleading statements. One of the ways that a debt collector can make a false or misleading statement is on a credit report.

A debt collector is not permitted to threaten or communicate false information, including the failure to identify that the debt is disputed. Title 15 U.S.C. section 1692e subsection (8).

This means that any time a debt collector reports to a credit reporting agency, they must identify that the debt is at least disputed, and if they know or have a reason to know that the debt is not valid, they are not permitted to report it at all. Further, if you dispute the debt, they are required to show that the debt is disputed.

Quite instructional, is the case Brady v. Credit Recovery Co, 160 F.3d 64 (1st Cir, 1998).  In the Brady case, the Mr. Brady never signed the lease in question. When Credit Recovery sent him a collections letter, he called them, and told them he never signed. He also did not send them a dispute letter (a mistake on his behalf, but not fatal).  Then, time went by. Mr. Brady decided to buy a house. He applied for a mortgage, and the lender saw that Credit Recovery was there, and not even bothering to report that the debt was disputed. The 1st Circuit held that once the consumer disputed the debt, the debt collector had to at least identify the account as disputed, and their failure to do so violated the FDCPA.

But the key here, is a factor of proof. You have to be able to prove that the debt collector reported the debt to the credit bureaus after you disputed. So how do you  ensure that this is in fact what happened?

You send a dispute letter under the FCRA to the credit bureaus.

This is important. The reason this is important, is that by doing the dispute, you force the debt collector to respond to the dispute. What should you put in the dispute letter to the credit bureaus? That depends on the facts. If the debt is not yours, you should explain that it is not your debt. If it is a debt that is beyond the statute of limitations, you should tell them that. If the debt is simply disputed, you should tell them that. Each of these, forces the debt collector to do an investigation, and report back to the credit bureaus. Once they do so, their failure to report correctly can result in a FDCPA violation, and in the right circumstance, a FCRA violation.

 

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.

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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

More Collection Myths Busted

'Liar' photo

COLLECTION MYTHS BUSTED

We have all heard lots of these myths. Some are told by friends who have had collectors calling, some have been told by collectors as myths, and some are urban myths started on some internet webpage.

1. If you dispute, they must validate within 30 days. FALSE. When a debt collector contacts you, you have 30 days to dispute the validity of the debt, or they will assume it is valid. If you dispute within that 30 days, they must pause all collection activity until they provide validation of the debt. Not within 30 days. They have an unlimited period of time to get that information to you.

2. If you dispute, they must provide proof of the debt. FALSE. They have to provide validation, which is not much more than going back to the creditor to make sure they have the correct person and the correct amount. If you make a SPECIFIC dispute, they must investigate the specifics of your dispute, but a general dispute does not trigger any real investigation.

3. If you do not respond, they canot do anything. FALSE. If you fail to respond, they can do all sorts of thing, including call, write, place the item on your credit report, or even under some circumstances sue.

4. If you dispute, they can still put it on your credit report. SORT OF. They can report the account to the credit bureaus, but they must report that the account is disputed. Supposedly, this account will not be scored, but it is very difficult to tell. Further, disputed accounts must be resolved before Fannie Mae or Freddie Mac will underwrite a mortgage loan.

5. If you call a debt collector and tell them you will not pay, they have to leave you alone. FALSE. A refusal to pay must be in writing. We recommend that you advise the debt collector that you refuse to pay in writing by certified mail. However, there are risks to using this tactic. The biggest is that they can still file a lawsuit, for which if you do not defend, they will win.

6. If you don’t pay, they can put you in jail. FALSE MOSTLY. There are a few instances where a debt collector can put you in jail. You can go to jail for writing checks on someone else’s account, or if your account was closed. Sometimes, you can be jailed for writing a bad check, but that is fairly rare, and in most states, that requires very specific requirements. IF your situation meets that problem, it is the crime of bad check, it is never bank fraud, or wire fraud.  Here is another blog entry on that.

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

Recognizing Scam Debt Collectors

Lately, we at KCLS have been getting a lot of calls about debt collection scams. One of the more popular lies that debt collectors tell is that you can go to jail for not paying this debt or that debt. That some how your failure to pay this (possibly time barred, and maybe not even yours) debt is bank fraud. But lets talk about the other signs that a debt collector is a scam.

1-If they call and tell you that you can be arrested, they are probably a scammer.  There are very few debts that you can go to jail for, and most of those, they don’t send a collector for the money. If you have committed the crimes of embezzlement, or theft, or fraud, they don’t call you. Think about it. Did they call up Bernie Madoff and ask him to pay? No. The SEC and the FBI just stopped in one day, and put him in irons.

2-If they call and tell you they are the police and that you will be arrested, they are almost guaranteed to be a scammer. Just think about this. Do the police call people before they show up to bust through the door with a warrant, throw you on the ground, and arrest you? No. That would be stupid of the police.

2A-this is not really a separate category, but a subtype- If they tell you they are a process server, and that you will be served shortly (typically that day or the next day), they are a scammer. This is a variation of the “I’m with the police” scam. Real process servers don’t call in advance. They also don’t ask where you work, and they don’t tell you what time they will be there.

3-If the debt collector will not give you an address for payments or for correspondence, they are a scammer.  Tell them that you will not pay over the phone, that you will only pay, if at all, by mail.

4-If the debt collector won’t tell you a valid phone number, they are a scammer. Tell them that before you will discuss the debt with them, you need to call them back, Promise them that if you can reach them, you will discuss the payment of the debt, but if you cannot, then you will assume they are a scammer.

5-If the collector only calls, but never sends you anything in writing, they are most likely a scammer. Real debt collectors know that they must send a collection letter, called a 30 day validation notice. This gives you 30 days to dispute the debt. Scammers know that if they don’t send you a letter, it is harder for you to track them down to sue them.

6-If they communicate with you by e-mail, particularly if the first communication from them is by e-mail, they are probably a scammer. Not always true, but most debt collectors do not communicate by e-mail.  Also, look for the domain that they are e-mailing from. The domain is the part after the @, like gmail.com, yahoo.com, etc. If the domain is a public “free e-mail service” domain, like gmail, yahoo. Hotmail, AOL, or MSN, they are most likely to be a scammer. Real collectors have their own domains.

7- If they tell you the debt cannot be discharged in a Bankruptcy they are a scammer. The debts that cannot be discharged in a Bankruptcy are very limited in nature. Taxes, child support, and a number of special debts that apply mostly to corporations are not dischargeable. Almost everything else can be discharged.  Read more about Chapter 7 non-dischargeable debts and Chapter 13 non-dischargeable debts. Student loans are VERY hard to discharge, but they can be.

If a debt collector is telling you these things, call them out on it. Tell them you think they are a scammer.  Then give us a call, and let us see if we can track them down. Most are very hard to find, and they count on that, but we have been successful at finding some of them.

If you have been abused by a debt collector, please call us, and let us see if we can help you.

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.

Call us: 804.303.0204
Fax us: 804.303.0209
US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230