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About Regan Shinski
Expertise
I can answer questions on collections, repossessions, bankruptcy, credit repair, credit counseling, FICO scores, credit planning, and the cause and effect of credit related decisions. I can also answer questions on collection settlements and preparing to sue your creditors for false debts and credit credit reporting.

Experience
Fifteen years ago I was financially devasted due to severe health issues. I filed bankruptcy, had a foreclosure, car repossession, tax lien, and ruined credit. I immersed myself in credit law. I settled dozens of accounts and had them removed to improve my credit. I personally sued four creditors and collection agencies and won cash settlements for their false reporting on my credit reports. Since then, I have completely recovered and have nearly $100,000 in revolving credit lines and perfect credit. I have owned a credit repair company for the past five years and have an additional three years of specific work in the collections and debt management industry. I am fully versed in the Fair Debt Collection Practices Acts (FDCPA), Fair Credit Reporting Act (FCRA), and have used them successfully in collection settlements and lawsuits for myself and others. I am also familiar with and abide by the Credit Repair Organizations Act (CROA). I have deleted or helped delete literally hundreds and hundreds of derogatory items from consumers' credit reports and helped negotiate many settlements with collection agencies and creditors. I have also advised people on bankruptcy at any stage. In the current credit market, I have successfully advised numerous people on how to obtain credit and how to negotiate for better terms.

Education/Credentials
BA University of Minnesota

You are here: Experts > Business > Corporate Law > Collections Law > my nephew the soldier who will not pay his debts

Collections Law - my nephew the soldier who will not pay his debts

Expert: Regan Shinski - 10/29/2009

Question
QUESTION:
"my nephew came to live at my home in 2006 and did not even have a drivers license then. my common law wife became his legal guardian.and thus I was able to claim him as a dependant. this allowed me to sponser him onto my Usaa auto policy and enable him to get his license. He had told me his intent was to serve after graduation. and I would be paid back for the auto insurance cost and the cell phone he wanted. when he got his enlistment bonus. He damaged one of my cars and so I entered into another verbal agreement as he was 16-17 then that if I repaired a ford taurus that I had bought he would also reimburse me for the parts and any gas money loaned as he only had a part time job and was ADD and had trouble in school. when he turned 18 in march of 08 he confirmed the deal was still good so I saw no reason to put this on paper [bad move] or the fact that since the money used to pay his cell bill and auto parts and auto insurance was all on a credit card at 14% interest. He had stated he would pay that too.

The car a 1993 taurus had to be in my name to be insured at the cheapest possible cost.

One month before he left for the army the car broke down so he used our van as I was not gonna fix it again.

He now freely admits he borrowed money from me but says that since he did not keep pocession of the car his debt is paid in full.

His captain has stated since I have nothing in writing except an admission of the debt to the captain and a facebook statement transcript that he and his wife would start paying against the 3400 total debt in aug 09. [they stated that in may of 09 but are now divorcing].That the army can not order him to repay the debt.

He also borrow 400 bucks more in dec 08 to pay for a airline ticket 249 a cash gift for his mom 100 and 50 directly withdrawn from my account to open his USAA checking account.

I live in minn he was stationed in alabama and he deployed to the middle east in sept 09 from Ft Lewis in washington State. he now states that by not buying the ford taurus from me the entire debt is settled. He was to pay for the repairs to make it a safe running car for him to use. I had stated he could have the car when he payed back all the money borrowed if he wanted it.

He got married in Washington state and is getting divorced there.

All I have is his social security number. I dont know his Drivers license number, or if he changed his residence state.

SINCE I have his admission of borrowing the money and its past aug 09. Can I legally report the debt on both his and his wife's credit as an insufficient unsatisfied debt. As the debt is now 90 days overdue.

Do I have to have him sued in washington state or here in minn.

Please treat this as a hypothetical answer on the lawsuit as If I was a resident of your state if necessary.

thank you for your time sir

How do I serve him since he is overseas

ANSWER: Dear Chuck:

You are not going to like my answers. This goes under the case of "no good deed goes unpunished." You have a lot of obstacles to get your money back.

* It's a little complicated to follow your timeline, but let me start by saying you cannot enter into a contract with a minor - either verbal or written. You also cannot "back-date" a contract meaning anything that happened when he was a minor, you cannot get him to admit it as an adult and make it hold. The only claim you have is for anything he AGREED to as an adult and you GAVE him as an adult. If I understand the timing in your question, this eliminates most of the car and insurance issues.

* You may not be able to collect the insurance in any case. A lot of people do it, but in essence you committed insurance fraud by putting the insurance in your name to get cheaper rates when you knew he would be the primary driver. A court will often not enforce what they deem - fairly or unfairly - insurance fraud.

* Private citizens cannot report to the credit bureaus. You have to be a client of the credit bureau that extends credit that is open to the public. Even in a hypothetical world where you could do so, setting yourself up to report this on his credit reports would cost a significant amount of money.

* From what you wrote, I see no contractual agreement with his wife. So no credit reporting or lawsuit against her unless you had a specific verbal or written contract with her.

* The military or any other company will not garnish his wages unless you have a court-ordered judgement against him.

* If you are going to sue him, you really have to do it in his state or residency. I guess technically you could try and sue him in Minnesota. However, the cost for a Minnesota process server to serve him out of state is prohibitive and he can dismiss the Minnesota suit with simple proof he does not live in that state. You would then be out that money without even a court date.

* Serving him overseas is typically not an option for the same reasons. It's expensive and he can get out of it very easily. I'm not even sure you CAN serve him overseas, but I KNOW no court in the land will expect him to come back. So he can have it dismissed even if you could serve him.

I know that does not leave you many options. Looks like he may owe you - legally - the $400, $249, $100, and $50 as those amounts you claim he entered into and was given when he was an adult. What you want to do is be patient. Maybe try and get him to admit those debts in e-mails. That would help your case a lot. Even getting him to say he "borrowed" money from you in an e-mail is powerful - better than what you have now.

Collecting on it will have to wait until he is back in the country - at best. You will likely have to sue in Washington.

I wish I had better news for you. Sounds like you were wonderful to him to help him get his life together. Take solace in that good deed. Eventually, he may turn around.

Please let me know if there is anything else I can help you with.

Regan
mbscompany@aim.com

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

QUESTION: when he turned 18 in march 08 and still had the car to use he again agreed to pay all the past monies that had been borrowed over the prior years.. that was why he was able to keep driving the car till june when it broke. The insurance company stated that since we had 3 cars and my wife and andy were listed on the taurus and the van as co users and he was listed as having only 3 party emergency usage permission on my tahoe that this was perfectly acceptable and legal. They said he had a choice of 2 vehicles and he did in fact drive both on different occasions. I was under the impression that transunion will accept a private report. Is this not the case. As for the admission of debt. His captain clearly stated in his email that andy admitted borrowing the money and I have the facebook transcript from his account stating the debt amount and agreeing to pay it starting in aug of 09. this was restated by his wife as she spent the enlistment bonus on furniture. So why is she not on the hook. Are not spouses responsible for a debt they cause to not be paid?

The May 13 09 transcript from his account states I WE agree to pay the debt. The may 16 09 transcript from her states she would start making payments in aug 09

thank you for your time sir

Answer
I am not aware of any of the three major credit bureaus accepting private accounts from consumers without a lending license. I am nearly certain of this. There are third party companies that can report things such as utility bills, insurance and other accounts that traditionally do not report. However, the payments and paperwork have to go through them and they charge a fee as I mentioned.

If you have mitigating circumstances regarding the insurance, a court may hear and allow it. My point based on your previous posting was that I have seen cases dismissed when people clearly set up the policy in someone's else's name to get a better driver listed for the purpose of paying reduced premium. I'm not saying your case is like this as it sounds like you have other circumstances and the insurance company allowed it. I'm saying if the court looks at it like you put a car policy in your name when everyone except the insurance company knew you would not be the primary driver - an 18 year-old would be - be prepared to show your documents or explain how and why it was done and that they insurance company knew or approved it. If that is the case, this issue may not apply to you and you could collect.

Regarding his wife, there are two options where she is liable. The first is if you have a contract with her. She has to accept money/goods and agree to repayment terms. This requires some type of DIRECT communication between the two of you. I don't see where that is. The closest is the transcript on their facebook page that she would start making payments but she can say she was just relaying her military husband's message. It's also on a joint public site, not a private phone or e-mail account. If she said her husband posted that in her name, can you disprove it? It's a joint account. Also where did she agree to be legally responsible for the car, the insurance at the time it was given? Now I'm playing a little devil's advocate here. I don't know what that facebook transcript says, if there's interaction there, and so on. Basically, if there is a contract - a meeting of the minds - in DIRECT communication between the two of you on that facebook transcript, you may have a contract. I don't know without seeing it. At the very least, you can sue her and the judge will make the determination if a contract actually existed.

The second option for the wife to be liable is more black and white. Washington is a community property state. Any assets and DEBT incurred during the marriage are jointly the ownership and responsibility of both parties. It does NOT include debts from one spouse before the marriage. So if any of these loans occurred after their marriage, they are both legally responsible. Conversely, the law says if the husband incurred the debts BEFORE the marriage she is specifically NOT responsible for them under this provision. If the loans were made while residing in Minnesota, she is not responsible under this provision. You would need to prove a contract with her. She is not responsible just because she spent the bonus causing other debts not to be paid. You need the contract or community property law to enforce her liability.

It sounds like you have decent admissions of the debt from your nephew. That will help - a lot. A word of caution, unless you have his captain at the trial to testify, you will likely NOT be able to use your e-mail from the him saying he heard your nephew admit the debt. That is clearly hearsay evidence and usually not allowed. You can try and admit it, but don't base your whole case on it.

Regarding the issue of admitting past loans when he turned 18, I do believe it is still questionable especially in cases with relatives. Courts simply do not like to enforce contracts with minors or for money received by minors. They error on the side of voiding any type of agreement made with people under age 18. Now I think you can still try and proceed since you said he made an agreement to pay "X" amount AFTER he turned 18. That IS a contract. Combined with other admissions you have, I think you should proceed. I'm just trying to give you a little warning where certain judges may be skeptical or ask hard questions.

Don't take my comments the wrong way. People have proceeded with less of a case and some probably have won. I'm trying to give you an idea of the legal obstacles you may face. The last thing you should want to spend significant money just trying to get this case to court, only to have it thrown out quickly because of some technicality. If everything is as you say and you are determined to pursue this, the only way to find out is to go ahead. I don't think your evidence is terrible, just not a slam-dunk case.

Good luck, let me know how it turns out or if I can help any other way.

Regan
mbscompany@aim.com

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