Expert: Creditwrench - 7/26/2010

Question
QUESTION: I was laid-off last year and could no longer afford our van payment of $610. The payment was so high because the interest was so high. I paid approx. 30K towards this van and still owed $15K. 2005 Chevy Astro. So they sold it for $3300. I was notified that it would be sold but not where if that matters. I was made an offer by Wells Fargo to settle for approx. 45% and I think the balance was approx.$13K. I just couldn't come up with the money since they wanted half and then 3 payments. I thought the deal was fair enough. I never talked to them again and this was around January 2010. Now I got a letter dated 7-8-2010 for a collection company which say they are authorized to settle for 50% but the balance is now over $15K. I don't have that kind of cash. I took a job making $7 less an hour and my wife works part-time and we have 5 kids. We had to get another car in my wifes name so she could do her job and then I got another car at a buy here/pay here rip-off place because I drive for my job. I couldn't save up for a car. So what should I do? Help please...

ANSWER: So who financed the car for you?
I have the exact same situation going on right now myself here in Oklahoma.
You say they turned it over to a collection agency and of course you can't pay and wouldn't really want to even if you could. After all, why would you want to pay for something you will never have? Don't make good business sense to me. You agreed to pay what you thought it was worth sitting on the dealer's lot, $45K. Now it's only worth #3300? That's nuts. They did the same type of thing in my case but it wasn't all that bad. They didn't sell it, they gave it away. (LOL). Now they turned it over to a collection agency. Has the collection agency sent you any letters? If so when did they send you the first one? That's important because you need to send them a validation demand within the first 30 days after their initial contact with you. That's an absolute must do anytime a collection agency contacts you for any reason. And remember that lawyers are 3rd party debt collectors too. I had one contact me and as soon as they figured out that I wasn't going to pay them anything they returned it to the lender who then hired an attorney to sue me. That's when the real fun began. I demanded validation and they didn't do it right. They messed it up big time. Then filed a lawsuit against me. I responded and sent them my demand for admissions. They goofed those up big time too. So I filed a motion to deem admitted on about 4 or 5 of my questions and they admitted they screwed up, apologized and filed motion to amend their responses. That got them into even more trouble. They sent some letters from the lender in which it said that they wanted the deficiency balance plus @2300 for miscellaneous costs including attorney fees and court costs. WHAT?????? !!!!!! The lawyer demanded another $1400 plus court costs on top of what the lender wanted. That meant the lawyer wanted to get paid twice for attorney fees and twice for court costs!!! The hearing on my motion to deem admitted was heard a week ago Thursday and of course the judge denied it because they submitted their amended answers and we were now relying on those instead of the ones that had been improperly answered before. The judge was not a happy camper. He suggested that I demand sanctions against the attorneys and file motion for summary judgment against them. I already have a motion in place for sanctions and that gets heard August 26th. He will most likely hit them pretty hard. I will have my motion for summary judgment filed with the court all prepared and filed about the 15th of August. That will get rid of the case at least temporarily. Of course, they could refile the case at any time and if they do we will go at it again. I hope they do.
I really, really hope they do. The next step I'll take is file a case against the lawyer(s) in federal court. I'll file at least 3 or 4 cases against each of two lawyers then go after the lawfirm itself. All are guilty of the same violations of federal law and I'll make each one of them pay me for what they did. I can also file a state level lawsuit against the lender for violations of UCC which is the Uniform Commercial Code and I just might do that too. Your lender probably violated your state's UCC too because under UCC they have to send you several required notices advising you of such things as the fact that they repossessed the vehicle and where you can go to reclaim any personal property. They also have to notify you of when and where the sale would be held so that you could go and pay the price for the vehicle at auction. You could have bought it back for the $3300 they sold it for if you wanted to and had the cash to do it with. A vehicle has a title to it so it falls under UCC as well as state and federal consumer protection laws. Don't let them stomp on your rights. I'll also file complaints with the Oklahoma bar association against each of the lawyers separately. By the time I get done they will wish they never heard of me. (LOL). And you can do the same thing because it really isn't hard at all. You don't need to hire any lawyers and most definitely wouldn't want to because they will only try to make a settlement for a little less money and you need that like you need an extra hole in your head. (LOL)
You need to learn how to do that in your case as well because they will sue you. Learn how to defend and how to take them to federal court and make them pay you instead of you paying them. That's what I teach people how to do. The first step in learning to deal with debt collectors is to visit http://www.creditwrench.com/18questions.html and be sure to listen to the recordings. That will teach you how to deal with their phone calls. Then be sure to keep a careful record of all phone calls and letters. Don't even throw the envelopes away if they have a date on them when they were mailed. If they don't have a date on them you can safely assume you got them 4 days after the date on the letter itself.

Bill Bauer
(405)237-2174


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

QUESTION: Wells Fargo Finance is the original creditor. I actually paid about $18K for the van and rolled an upside down balance of $8K from another van-all bad decisions. I have never been able to stay up to date on the van.... Stupid mistake. I tried but was almost always late and paid $600+ a month for over 4 years so I actually paid around 28K towards the loan and a big chunk of it was interest.I think I would prefer to settle for like 35% but I do not have ANY extra cash to pay a lump sum. It would be worth it to be done with this IF I had it. I just do not have time to fight this. I started a new job and although I make $7 less per hour I just want to get on with my life. I got the first letter from a collector around July 10th. How long before they sue me if I just ignore everything? I do not want to piss them off with a DV if it will push me into a suit. I just do not have any money to bargain with. I can't miss work for court all the time and am too drained. I got up one Saturday 2 months ago in severe pain and have since found out I have a dislocated lumbar disc or herniated disc. The insurance company at my new job has tried to get out of paying on it and I just got a letter about subrugation? I do not know what caused it-have no idea but probably accumulated over time and this job didn't help it... Now I am still working but if I need surgery this job has no disability and I would be without pay and have to pay my entire insurance cost which I can't do...

Answer
I can well understand your concerns about spending a lot of time in court trying to beat them. I've really spent a huge amount of time in court. I got served back in February and here we are in July and I spent a huge total of about half an hour in court so far. Now that is really a bunch of time spent in court, now isn't it.? (LOL) Now then, what you don't realize is that you are likely to find out when you get served is that they won't mention the fact of all the money you paid in over the months and years. They just want to tuck that in their hip pocket and go for the gold, your gold. Think you can afford that? Think again because the lawyer will want to double up on attorney fees too if he can. Same thing with court costs most of the time. How long before they sue you if you just ignore everything? There isn't any way to tell. You say you don't want to piss them off with a DV letter and they sue you? That's exactly what you want them to do!! That would be illegal continued collection activity. You are (in net effect) looking for more sand to poke your head into ostrich fashion. You need to stop and face the reality that if you don't stand up and fight they will get a judgment for the full amount and then start taking 25% of your wages, garnish any money you might have in bank accounts and a lot more nasty stuff you didn't realize they can do to you. You aren't making enough now, what are you going to do when you are taking home 25% less for the next several years? That's what you need to think about now instead of how to keep from pissing them off.