Advice regarding a civil judgement-where to go from here

When did the Chase Manhattan card go delinquent and what state do you live in?

This one may be past the SOL, in which case I'd leave it be. If they sue you, you must go and defend yourself and raise the affirmative defense that it is past the Statute of Limitations. But it depends on the state and when it went delinquent.

 

You have two separate situations: a civil default judgment for one debt, and a collection agency with another debt, minus a judgement.

On the latter (no judgment), if you can make it past the SOL on the debt without the creditor obtaining a civil judgment against you, then (eventually) the debt will no longer be enforceable. You never provided any dates (original date of delinquency, etc.) for this, so nobody can tell you what to do until you do.

However, on the first debt: They have already been awarded a civil judgment. It doesn't matter whether or not this is on your credit report or not - they can continue to attempt to (legally) collect the debt for as long as the judgement is valid (and, essentially, they can have it renewed indefinatley). This means that your bank accounts, real property, and any other (legal) sources of $$ is fair game. You can't just ignore this one and wait for it to go away.

 

Either there's more to the story or the lawyer you contacted was either being lazy or ignorant. Just because a judgment is entered doesn't necessarily mean you owe the money. If, for example, they failed to properly notify you prior to the hearing/arbitration, and you can prove it, the judgment may be vacated. This doesn't release you from the debt; it just means that they have to start all over (begin the civil suit again, serve you correctly, etc.).

Generally speaking, in order to get the judgment vacated on the grounds that you were not service/notified correctly, you would have to prove that you provided them with a different address (than the last known address they had on file) BEFORE you were served. If you moved but did not tell them, they can't very well have you served at a new address, which means all they have to do is try to contact you at the last know address that you provided them with (e.g., certified mail to that address).

That said, if a judgment was entered and you can't get it vacated, then you are legally responsible for the amount awarded. Ignoring it won't make it go away. The time period a judgment remains enforcable varies depending upon jurisdiction, but generally speaking, the other party can simply renew the judgment forever. And that unpaid judgement will remain on your credit report indefinately (it doesn't go away if they renew it).

With this judgment, they can puruse whatever legal means of redress that are available to them. Again, these are all different depending upon jurisdiction.

If the lawyers represending the original creditor aren't willing to engage you in a payment plan, you can't force them. You can ignore it and hope they go away (not likely, really), and risk finding your savings account empty one day. You can continue to try to talk them into a payment plan or partial settlement (lump sum in lieu of full amount, accepted as full satisfaction of the judgment). You can hire an attorney to try to talk to them. You can contact the original creditor to see if they are willing to make arragements. You can take out a loan or borrow money to pay them off. There are many things you can do.

Keep in mind, however, that as long as there is a balance owed, they can legally accrue interest and add it to the unpaid balance. A $10K award turns into $11K, then $12K, then $13K, etc., and into a much bigger sum, if you choose to ignore it. That should not be an option that you consider.

If you can borrow the money or obtain a loan, do it. If you don't have the money or can't get a loan, then continue to try to work out a payment plan or partial settlement with the lawyers or the original lender. Whatever you do, get it all in writing BEFORE sending them a single dime. Have it all laid out in writing, so they can't turn around in a few years and say, "No, we never agreed to THAT!".

 

You got a judgment against you because for whatever reason you did not pay them when you should have.Can you pay them now? What changed?It turns my stomach knowing that there are people who make money buying old debt and acting as their the victims.I think bill collectors should be outlawed.If the original creditor does not want to do what it takes to get you to pay them then they should get out of the banking buisness.I am sorry things turned out for you the way they did.How does it make you feel knowing you owe money to someone who never loaned you any?By the way a high percentage of judgments are never collected on.

 

And it doesn't turn your stomach to know that there are borrowers who "make money" by accepting the funds under specific contractual terms, and then failing to fulfill their obligations?

Not sure where you hail from, but from where I come from, we call that "freeloading".

In the end, that costs ME and YOU and OTHERS money. It costs us more money to borrow from the lender, because the lender has to build risk into their rates that they offer to borrowers who DO pay back their debts.

I think you need to take an Introductory Business Law class.

Legal contracts include offer & acceptance, consideration, and intent. Saying that the person making the collection call MUST be directly employed by the original creditor otherwise the debt should not be enforceable is ludicrous.

It doesn't matter if the original creditor, a collection agency, Santa Claus, or the Saddam Hussien was trying to collect the debt: If you borrowed it, you owe it, no matter who owns the rights to the debt.

Many types of contracts also include the right of the borrower and/or the lender reassign their obligations and/or rights under the contract. While this allows an original creditor to sell his RIGHTS (what you don't agree with), it also can allow the borrower to transfer his OBILIGATIONS. It's a two way street, but apparently, you only like one direction.

Again, contract law, reassignment of rights, Business Law 101. Down the hallway, take your first right, and it's your second door on the left.

 

I agree with most of the above however, when dealing with distressed debt purchasers, there are matters of equity to consider. Estoppel claims and unjust enrichment often applies wherein bars are presented to preclude grossly unfair windfall awards.

While it may not matter who owns the debt (presuming a chain can be shown) at the time of the Complaint, it does matter how much the holder is out for non-payment. In other words, Courts are justly reluctant to award a $5,000.00 judgment to a holder who has lost only $5.00. Of course, Defendant's must have sufficient knowledge to present these defenses and most do not. That is what the distressed purchaser preys upon by and large for whatever that's worth.

 

We're not talking about a judgment being awarded to the nTH assignee. We're talking about a judgment being issued for $5,000, and then being reassigned numerous times. The amount awarded does NOT depreciate, simply becuase the current owner only paid $5 for it.

 

A third ,fourth or even fifth party to an original contract obtains a judgment and makes a huge profit, how does that help the original lender?Was that covered in business law 101?

 

No. That's called capitalism, it's a wonderful thing, and it's what makes this country so great.

It's covered in Economics 101.

However, when a bank sells off bad debt for a fraction of the cost, it makes more money that if it had not collected it, or if they had (eventually) collected it, but spent more money to do so.

That, too, is covered in Economics 101.

Listen: you can whine all you want because a valid debt doesn't disappear if the OC doesn't collect it directly, but it won't change a thing. You create a debt, you should be liable for it. Personal responsibility and accountability. Period.

 

I hope someday you are not on the wrong end of economics 101.It is easy to smile when the sun is shining.

 

The theory of economics doesn't choose where you will be. You choose where you will be, financially speaking.

Whether or not the 'sun shines' isn't based on luck, chance or happenstance. It's based on the decisions that you make. Make good financial decisions, the sun shines. Make bad financial decisions, it stays behind the clouds.

They key is to make the right decisions so that, if the sun doesn't come out one day, you are prepared. Not being adequately prepared means you did not make the right financial decisions BEFORE the sun refused to shine.

And you don't have to be wealthy to make good financial decisions, nor are bad financial decisions limited only to the non-wealthy. Quite frankly, it's the good financial decisions that make the non-wealthy, wealthy, and it's the bad decisions that make the wealthy, not wealthy.

Whether in good position or a bad position, you can base your financial status on luck. Personally, I give credence to the decisions I have made, good or bad.

 

A note re: "the wrong side"...

I have to jump in here, if only as a venting action. I understand all aspects of these issues, and do not condone any excessive CA tactics.

But..I am currently in a business situation where parties "walked way" from responsibility, and left others forced to pay for their irresponsibility. It is enraging to now spend "good money after bad", and frustrating to see this "side", where it is virtually impossible to collect any monies. This situation is further frustrating knowing the parties have pruchased new real estate, living well and left others to pay for them.

My point is that it is "different" when not paying a debt hits your own pocket, and is not a faceless transaction. Every businessperson knows all too well that there will always be "problems", what they do not understand is "not handling them". It is all too easy to say a "business should just take it as a loss", but there is always a face somewhere that gets hurt.

Again, I stress I understand situations of struggle and real problems. Further I promote using the "system" to its full avail. But, when you are on the collecting side of the "system", you do appreciate how weak it really is.

 

No offense, as I'm sure you and your partners expected big ROI, but ...

Nobody forced you to make the decision to get INTO this 'business situation'. If you did not have yourself prepared to absorb this possibility, then you should not have made the CHOICE to get INTO that 'business situation' to begin with.

Further, if you chose to put yourself into a situation where you would have no legal recourse IF the other parties bailed out on you, then - again - you chose that.

Point being: You were not FORCED to "pay for (someone else's) irresponsibility" -- you chose this.

Again, no bad intent meant. But this is akin to purchasing a used car, but not having enough savings/reserve to cover for a major catastrophe that might occur, such as a blown transmission that occurs a few months after the purchase.

I will never enter into a partnership with another party with regards to a business venture. Instead, the best thing to do would be for YOU to own the business, then HIRE that person as an employee and pay them a salary. If you need capital, then they INVEST it in YOUR business, and you have a contract to repay them a percentage of the profits until their investment has been returned.

NEVER go into business with someone else unless you're prepared to absorb ALL the costs, in case they bail. Either that, or make sure you have specific legal avenues of redress.

 

What do you mean, 'never served'? Are you saying that, since you didn't have something put in your hand by someone, you weren't served? Because that does not necessarily mean that you were not correctly served. If you failed to provide them with a current address, then in most cases, they are only required to serve your notice by mailing it to your last known address. Your failure to update them of any move can't be held against THEM, nor stop them from obtaining a judgment for a legitmate debt. If it was that easy, everybody would just move around to avoid their obligations.

Or are you saying that they DID have your current, valid address at the time they served the papers, but delivered them somewhere else?

If you never pay it off, it will (essentially) always be collectable (as long as they renew the judgment).

This means that you will always have to live in fear of them finding you, garnishing wages, tapping into a savings account, etc.

Also, the longer it goes unpaid, the bigger the balance gets. Remember, in most every case, the debt owner can charge and accrue interest against the unpaid balance. It may be a $10K debt today, but years down the road, it can legitimately be MUCH more.

And it won't stay on your credit report forever (regardless) IF you pay it off. Once it's paid off, it will eventually be removed (reportable time depends upon the laws of the state having jurisdiction over it).

While I would rarely advise that you borrow against any savings that results in penalties, fees, or losing future compounded interest, you have to compare and contrast what THAT would cost you with what this debt will cost you down the road. If borrowing against it or taking a partial draw costs you a few thousand in penalties, but NOT paying the debt and having it accrue interest and eventually costing you TEN grand down the road, I'd say it's best to cut your losses now and settle/pay off the old debt.

I'm not an attorney, but I've been through similar situations both personally and when helping others. And, at least for me, the best bet was to negotiate a settlement, get the funds by whatever reasonable means available, and settle it as soon as possible.

Otherwise, the only things that change are you getting older and the amount you owe getting bigger (accrued interest).

 

Nobody forced you to make the decision to get INTO this 'business situation'. If you did not have yourself prepared to absorb this possibility, then you should not have made the CHOICE to get INTO that 'business situation' to begin with.
So Mr jshimmer you admit and agree with me that banks and people like you should not blame customers who bail out on them.Thank you

 

You obviously have about as much experience in Business Law & Economics as you do attempting to make analogies, as the two situations are competely different.

Pay attention here, and you just might learn something besides how to attempt to skirt out of paying back money that you have borrowed:

The difference between the two situations is that the bank WAS prepared to have someone default on their end of the deal, while bizwiz41 WAS NOT.

• The bank DOES have legal recourse, which is why there were able to successfully sue and obtain a judgment against the freeloading borrower (who is whining because the lender actually got some of THEIR money back).
• bizwiz41 DOES NOT (according to his own admission) have any legal means by which he can sue or obtain a civil judgment against HIS freeloading ex-partners.

Do you see the difference, or do you need yet another explanation?

 

Calm down . . . I know. I was just offering a hypothetical counter-argument.