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Originally Posted by himain
My bf had a credit card that charged off in 1997.
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Florida regards them as open accounts and the statute of limitations is 4 years. Florida has no statute of repose related to debts.
Portfolio Recovery Associates v Paul Fernandes (15th Judicial Circuit (Appellate) in and for Palm Beach County).
That's your case law.
Quote:
Originally Posted by himain
After being sold many times, this last company finally purchased it and filed a judgment on 11/02 to an address that he hadn't lived at for about 3 years.
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No, they didn't file a judgment, they filed a lawsuit, served him at the wrong address, then motioned for default judgment because he failed to respond to the summons and complaint. Then the court awarded judgment.
Quote:
Originally Posted by himain
Now the reason why I'm asking all this is because we are trying to buy a house. FHA will not loan money until all judgments have been paid. We are supposed to close in 2 weeks. I finally tracked down the company and spoke with a person there who wants 10K for a $2900 original balance. No settlement offer accepted at all even though the original account was based back in 1996 and it has been 6 years since they bought the account.
Thank you for all info.
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You are not closing in two weeks so you can put that thought out of your head right now and get over it.
Here's how you handle it. If you don't follow the instructions and get screwed, don't blame me and I accept no responsibility whatsoever.
1) Get in your car and drive to the courthouse where the lawsuit was filed, pull the case file, and photocopy every single stinking scrap of paper in the case file. While you're there, ask the clerk if they have a blank form to file a Motion to Vacate. If they do fine, if not, you'll have to wing it.
2) Write a letter to each of the 3 credit bureaus (Equifax, Experian and TransUnion) requesting a copy of his credit report and send it certified mail return receipt requested. For those who have difficulty with English, an e-mail with receipt request is not a written letter sent certified mail return receipt requested. Be sure to include photocopies of driver's license and social security card to expedite service. If he has copies of his credit reports
from the credit reporting agencies and not some on-line crap (even if it purports to be from the credit reporting agencies) since the court case was filed, you can skip that step.
3) On the credit reports from the credit reporting agencies, look at the dates they are using to report the debt and look at the address histories they have listed for him. Also check for inquiries made by the junk debt buyer between 2000 and 2002. Inquiries only show for 1 to 3 years, so they might not be visible. The original creditor should have stopped reporting in 2004-2005 as well as any collection agencies, but you never know until check the credit report. The other junk debt buyers who owned the debt might still be reporting also, so check the dates they list if they are.
4) Get a copy of the last credit card bill. If he doesn't have it, contact the original creditor (by phone if you want) to see if they can send it to you or provide information on the date of last payment.
5) The dates listed on the credit reports are important because the charge off date is irrelevant for law suits. The date you're interested in is the date of last payment because the statute of limitations starts with the first delinquency, and the first delinquency is 30 days from the date of last payment. The original creditor and the junk debt buyers are required to report the date of first delinquency but the question is did they, and did they report it accurately?
6) Now, was the lawsuit filed 4 years after the first delinquency or not? Look at the photocopy of the summons and complaint. They probably listed two or three legal theories for recovery of the debt, one being "unjust enrichment" and the other being an "account stated." An account stated could be construed as a written account with a 5 year statute of limitations. If so, was it 5 years before or after the date of first delinquency? Not that it matters, but you could argue the junk debt buyer used deceptive means to collect a debt violating the Fair Debt Collection Practices Act by alleging the debt was an account stated when in fact it was not.
7) Next, if the credit reports from the credit bureaus do not show inquiries from the period 2000-2002, you'll have to send written letters certified mail return receipt requested to each of the credit reporting agencies and specifically request information regarding the date his most current address was reported and any inquiries made by the junk debt buyer between 2000 and 2002. The credit reporting agencies retain your entire credit history from the first time you obtain credit until long after you die. I know, you don't see that info, but that's because the laws only allow things to be reported 7-10 years and other things (like inquiries, addresses and employer info) 1 to 3 years. If you apply for a government job, do not think you can lie and say you never filed bankruptcy or had a judgment just because it doesn't appear on your credit report. You, your creditors and employers won't be able to see it, but government and law enforcement agencies can. I can tell you now that Experian will refuse your request, Equifax will comply, and TransUnion will, if you push them with another letter and some phone calls.
What you want to prove is that the credit reporting agencies reported his correct address, that the junk debt buyer obtained a copy of his credit report and knew his correct address, but served him at an older address anyway. That's common. You have to understand that the future careers of these collection attorneys is dependent upon their ability to crank out as many cases as cost effectively as possible, so in spite of the fact that it's illegal, unethical and immoral, 7 out of 10 will knowingly serve a debtor at a previous address knowing that no response is forth coming and they can easily win the case and get a default judgment with little effort on their part. If you don't believe that, just go to a court and watch. They file 30-50 cases a day, and win 9 out 10 by default.
8) Next issue, the junk debt buyer/judgment holder. You called on them and I'll bet you told them you were buying a house, right? No matter, if you called, they probably suspected that and got hold of his credit reports and they can see the inquiries made by mortgage companies, so they know he's buying a house and that the judgment must be paid. They have you over a barrel. Never call them again. Never, meaning "at no time ever." From this point on, your dealings are written letters certified mail return receipt requested. Send them a letter asking for particulars on the amount of the debt and a breakdown of the charges, even though I doubt they will break down the charges for you. They can only collect certain amounts of interest, fees and charges under certain conditions, and only when expressly in writing. In Florida, the per annum interest rate is 10% on a judgment, but could be 18% if a written contract exists. In general, junk debt buyers cannot collect interest or add fees. If at charge off the debt is $2,900 then that's what it is, plus 10% per year after the judgment. Many will falsely claim that they can charge the default rate (29.9%) on a credit card. Always check usury rates for your state to see if a collection agency or junk debt buyer is charging an interest rate higher than that allowed by law (I don't know Florida's).
8) Once you have everything, you can file your Motion to Vacate. Florida judges are anti-consumer, especially with respect to debts, and won't vacate a judgment on a debt just because of improper service. I guarantee you the judge's response will be that even if he was properly served, the junk debt buyer would have won anyway, and he will deny the motion.
So your arguments in your motion are that:
a) He was improperly served
b) They knowingly served him at a "bad address"
c) They violated the Fair Debt Collection Practices Act by knowingly serving him at a "bad address"
d) The Absolute Defense that the statute of limitations had expired
e) The Affirmative Defense that the junk debt buyer had no authority to collect the debt*
f) The Affirmative Defense that the junk debt buyer charged interest, fees other other charges prohibited by law
g) They violated the Fair Debt Collection Practices Act by charging interest, fees, or other charges prohibited by law
* A few words about that. If it was a Capital One card, I guarantee you that Capital One handed it off to the Westmoreland Agency (a collection agency) who sold it to a junk debt buyer, even though Westmoreland Agency had no authority to sell the debt. A few other collection agencies for other credit card banks are known to have sold debts to junk debt buyers without authority (we're talking over several million credit card and other debts like auto loans).
The junk debt buyer will be notified that you filed a Motion to Vacate (you have to send copies to them) and they may, for any number of reasons, choose not to respond, in which case the judgment will be vacated.
If they respond then subpoena the credit reporting agencies and force them to give you the address and inquiry information you need, especially the date of first delinquency (unless he has a copy of his last credit card bill) and you can subpoena the records from the original creditor and any collection agencies or junk debt buyers who had the debt to give you the date of first delinquency.
Figure 2 to 6 months to resolve it.
Sound appealing? No? The alternative is to pay up. Here's the scenarios:
1) $10,000 falls out of the sky and in your hands and you pay in full. It'll take a fews days to do their paperwork and forward it to their attorney, who will take a few days to review it and then write up a satisfaction of judgment and file it with the court, who will take a few days to review it and then actually record the satisfaction of judgment and then the court will mail a copy to you. Figure 3 weeks. The FHA will only accept a satisfaction of judgment issued by a court.
2) A miracle happens and they agree to settle for $6,000 which fell out of the sky into your hands. It'll take a few days to draw up the settlement agreement and mail it to you. You'll have to review it, looking for the conspicuous words in clear, precise and no uncertain terms that the debt is being settled, you are being issued an IRS Form 1099-M ("M" for Miscellaneous) and that a satisfaction of judgment will be issued on settlement. He'll have to claim the unpaid $4,000 as imputed income on his 2008 IRS tax return and pay taxes on it. Figure 4 weeks for the documents, the issuing of the IRS Form 1099-M, payment, review, the filing of the satisfaction of judgment, and the court's review and recording and mailing a copy to you to take to the FHA.
3) A miracle happens and they agree to settle for $6,000 which fell out of the sky into your hands, but you decide to skip the written settlement agreement. 6 months later you still have a judgment because they claim you didn't settle, rather you merely made an initial payment on the amount of the judgment. That's what happens when you try to do things in a hurry and don't have enough self-respect to protect yourself by using written documentation. Give yourself a big pat on the back for screwing up by not being able to prove you satisfied the judgment.
4) A miracle happens and they agree to settle for $6,000 which fell out of the sky into your hands, but you decided to skip the written settlement agreement. They sell the judgment to another junk debt buyer (yes they can do that) who comes calling demanding the remaining $4,000 balance. Again, give yourself a big pat on the back for not being able to prove you satisfied the judgment.
So, move quickly, post haste.
Unfortunately, you alerted them, they know he's active and has money (um, he's looking to buy a house right?), and I'll bet within 60 days he gets a notice to appear in court for a debtor's hearing to begin the process of wage garnishment.
Won't that be fun?
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Judgement help needed please!
