Expert: Michael Brotherton - 10/11/2008

Question
QUESTION: I received a letter from an attorney on Friday of last week (10/3/08), advising they represent Georgia Receivables, Inc. Assignee of Chase Bank USA, N.A. for an outstanding debt of $4047.76. I thought this account had been charged off long ago. I live in SC and if I am not mistaken, the SOL here on credit card debt is 3 years. I stopped making payments back at the end of 2005, as I had to max it out to pay medical bills and live on in order to care for my son's medical issues at the time. And I couldn't afford to make credit card payments and pay for his medical care - poor planning all the way around - financially, marriage, etc., just really did not have a lot of options, and I knew that I had to see that my son was cared for.  But, I digress, the firm advised they are trying to collect the debt and no attorney has personally looked at the account, but if I fail to contact the office their client may consider additional remedies to recover the balance due. They go on to say that unless I notify them within 30 days after receiving this notice that I dispute the validity of the debt, they will assume it is a valid debt. If I notify them in writing within 30 days they will obtain verification of the debt or obtain a copy of a judgement and mail me a copy of such judgement or verification, and provide me the name and address of the original credit, if different from the current creditor.

I guess my question is what should I do next. I do not think they have a judgement against me, but how can I be sure. If they do have one, what are my options and what should I do from this point? If not, how might I keep that from happening? I cannot remember the last payment I made on the account as it was so long ago. Can I request a detailed itemization of the charges, etc., including payments, etc. I'm very tired of making not only bad decisions, but the wrong decisions. Any information or guidance you can provide to me would be most appreciated. Thank you for your time.



ANSWER: First, when an account is charged off it is still a valid debt, it is just written off as a bad debt and becomes an inactive account. It is still collectable up to the last date of the SOL. A charge off is just an accounting term the banks use to show a loss. Once they collect the account it accounts toward their profits. Once the account is charged off it usually goes to the recovery dept. then, if uncollected, they may assign or sell the account to a collection agency who has the same rights as the original creditor.

There is some debate about SC SOL for credit cards. Some have argue successfully that a credit card is a written contract, others argue it is an open account. There is a big difference in SC between the two. A written contract is 10 years and an open account is 3 years.  However, i would go along with the 3 years from the date of last payment or charge against the account. On your credit report it shows as he DLA or Date of Last Activity.

You need to send a certified letter asking for validation of the debt "according to the FDCPA". Use those words in the letter. If they have a judgment they will provide proof. Also remember, a suit must be filed in the county where you live. You may call the county or municipal court and ask them to look it up or you may be able to go to their web site.

If you are still within the SOL the best thing to do is negotiate a payment plan or lump sum settlement. Don't be intimidated or fearful of the collector and stand up for your rights. Do your homework and be mindful to protect your home, your paycheck or your livelihood. Make sure you don't agree to anything you doubt you can afford. It will only get worse if you default.

As to your last question, you can always ask for an itemization but they are not required to provide it. You may be able to find it on your credit reports. Go to www.annualcreditreport.com for a free credit report from all three bureaus. This should give you the info you need to determine the SOL.

Good luck.

PS. If you need help negotiating this debt contact me 937 372 8581. We are now a full service law firm.

---------- FOLLOW-UP ----------

QUESTION: What recourse do I have if the request for validation is past the 30 day time period that I have to respond? Also, a friend told me to send a cease and desist to the attorney. How will that help me, or will it?

I also have another question. I have received a letter from another attorney requesting payment on an account I do not recognize. I emailed them for validation of the debt as I did not recognize the creditor. They responded to my e-mail, but did not send me any information. The next thing I got was a letter from them with a cc: to the local sheriff's dept requesting they seize my assets - with Chase Manhattan in the reference area, but the with the same file no. as the other creditor. I have made several attempts to contact them about this debt, but they have done nothing to follow up with me. If they truly want their money, why would they not want to work with me regardless? I suppose I could file bankruptcy, but I am not sure that is the best option. It will eliminate the immediate problem, but I then still have that stigma attached to me for the rest of my life.

I'm a mess!

Answer
I have never seen anyone successfully complain about that particular issue concerning validation of the debt so I cannot say for sure but the procedure is clear in the Fair Debt Collection practices Act. You could file a Complaint  with the FTC or possibly file suit against the agency or the attorney. Getting an attorney who knows what they are doing in this area is going to be very difficult. It probably would be a waste of time and good money to sue them.

An attorney in these instances are debt collectors and if you send a cease and desist letter it can stop the phone calls but they can still proceed with legal action against you. In fact it could prompt them to do so if they haven't already because  you are basically slamming the door in their face. If they are harassing you by phone you can send the letter but the best way to deal with it is to write them a letter explaining your circumstances and offer them a plan. Send the letter by certified mail, return receipt requested.

As for the other attorney, check the courts to see if they have initiated any legal action against you. Also contact the sheriffs dept and see if the letter they sent is legitimate.

Don't file bankruptcy until you talk to a legal professional or someone who specializes in these types of situations. It may not be as bad as it appears. And if you do have to file BK to protect your assets or your income it will not stick with you forever. And it is rarely publicized so you don't have to worry about the stigma. Besides, in todays environment so many people are in trouble it seems to be the only way out for some. But take heart there are other solutions. Call me if you would like to discuss those other options. 937 372 8581