Expert: Regan Shinski - 8/4/2010

Question
I had two vehicles financed and a house mortgage in Georgia.  I lost my job and moved to Florida 4 years ago.  Both vehicles have been repossessed and the house was foreclosed all about 3 years ago.  I haven't heard from anyone regarding these accounts but have recently been getting strange phone calls from a lot of numbers I do not recognize.  I feel confident it is probably debt collectors.  My question is, first what is the venue for these debts?  Georgia, Florida or wherever the company resides and is there a statute of limitations on these debts?  I know my credit is ruined and I don't even have a bank account.  I am worried about them coming after me now and garnishing my wages which I can't afford either.  I'm thinking about filing bankruptcy but don't know if it's the best option for me and if it is should I do chapter 7 or 10.  Any thoughts or assistance would be greatly appreciated.

Answer
Hi Linda:

I think you are premature on the options you are talking about, unless there are SIGNIFICANT other debts not mentioned you definitely should be filing bankruptcy.

At this point you need to get more information.  Start with your credit reports.  You can get one free copy per year at www.annualcreditreport.com.  These reports will tell you what debts are reporting, what collection agencies, and other pertinent information.  This is also the first step in any credit repair you may do.

Secondly, no wages can be garnished without a judgement in place.  The credit reports will show any judgement.  If there are none, you are 98%+ safe that there is no judgement - unless VERY recent.  No judgement, no wage garnishment.  Period.  If you receive any notification for a lawsuit or are served papers, that is the time to make decisions on bankruptcy, settling, etc.

Any collection letters you receive, you should respond to.  ESPECIALLY the first communication from a collector that has a statement to the effect of "if we do not hear from you within 30 days..."  Send a letter back to the collection agency asking for validation under the FDCPA.  This requires them to send you proof of the debt and that they are authorized to collect on it.  

On all collection agency, you can send a letter saying you want all future communications to be in writing.  This will stop the calls.  ANY communication to a collection agency should be sent via certified mail, return receipt requested.

There are statute of limitations on these debts.  In general, in Florida it is five years and in Georgia either four or six years, depending on the type of contract.  In your case, the Florida limit should apply assuming no longer maintain any property or residence in Georgia and that they did not start any legal activity while you were still in the state.

The bottom line is you are a little short=handed because of the lack of information.  Proceed as directed and it should give you some measure of relief.  It is not likely you have a judgement without being notified previously, which means they cannot garnish wages.  You can stop the calls with a simple letter.  Don't make a decision on bankruptcy until you absolutely have to.  There are other options of delaying, settling, and counter-suing that produce much better results for you than bankruptcy long term.

Good luck.  Feel free to repost a question as more information rolls in.

Regan