Charged off Account need help???

Neo,

As I understand it, re-affirmation agreements have to be approved by the court to be valid. If cap one is saying you re-affirmed, I'd sure get a copy of that because it must be in writing.

If it was included and now discharged, you've no legal obligation to pay it and they can't attempt collection. There's some hokey wording allowing for them to contact you and attempt to get you to re-affirm, maybe that's the game.

You don't have your schedule of creditors? Well for chapter 7 it shouldn't matter anyway.

Here's an FTC complaint against Federated Department Stores for the same slimey tactic:
http://www.ftc.gov/os/1999/9905/federatedcmp.htm

And a good BK site that answers most questions:
http://www.bankruptcy-expert.com/contents.htm

A charge-off though that was included in your BK should be zero'd out, if you re-affirmed that would be a whole new tradeline -- everything depends on whether there's a re-affirmation agreement.

If nothing else because they are reporting and updating you could hold them to the accuracy standards.

I think you should tell them it was included in your BK and they are attempting to collect on a discharged debt -- that should push them into providing an agreement if there is one. However, I'm guessing you likely don't want them to be right about re-affirmation and provide a copy so be careful how you word it.

Ohhhhhhhhhhhh wait, cap one that was reaffirmed and turned over to a collection agency, yes, the rep that advised you was from the collection agency?

It's my understanding they can't charge additional interest and fees unless the original contract allows for it or it's otherwise allowed by your state.

It will be a moot point if they can't prove you reaffirmed. If it's at a collection agency, definately validate!

PS: Ask for the commencement of delinquency date or confirmation of the last activity date given the timeframes, if your BK was in 1997, it should be before then or at the latest your date of BK filing.

Sassy

 

Burned by re-affirmation:

http://www.bankrate.com/qfn/news/bank/19981002.asp

In the grimy, desperate world of personal bankruptcy, there's a legal maneuver with an uplifting name: Reaffirmation. But that poetic word has sparked a furious debate in courtrooms and on Capitol Hill about whether reaffirmation throws a lifeline to drowning, good-hearted debtors -- or a big, heavy anchor.

With one in 70 households filing bankruptcy last year, and 2.2 million predicted for the year 2000, it's an urgent question.

Bankruptcy law loophole
Reaffirmation is really a loophole in bankruptcy law. A consumer files for bankruptcy because his survival supposedly depends on the court wiping out his debts. Designed as a last resort, it's a financial salvage attempt tinged with shame.

Chapter 7 bankruptcy releases the filer from all debt after he sells his belongings to pay what debts he can. (Some property, such as a house, is exempt and can't be seized and sold). But a creditor can convince the bankruptcy filer to "reaffirm," agreeing to pay an unsecured debt such as a credit card, rather than letting the court wipe it out. Creditors are required by law to submit reaffirmations to the debtor's bankruptcy court for approval. The debtor then has 60 days, during which he can change his mind and withdraw it.

Legally, a debtor cannot be forced to reaffirm, and judges rarely approve reaffirmation agreements, bankruptcy experts say. But that isn't always what creditors tell bankruptcy filers. This month, the Senate passed a bill 97-1 protecting Chapter 7 reaffirmations. Banking lobbyists spent $40 million on a campaign to push the legislation and block a House proposal to outlaw them. President Clinton vowed to veto the Senate bill unless it was revised with language curbing misinformation and bullying by creditors.

Last year, Sears, Federated Department Stores and GE Capital settled multi-million-dollar class-action lawsuits to consumers who claimed they had been tricked or bullied into reaffirming credit card debts. A federal investigation found that Sears failed to file reaffirmations for court approval between 1992 and 1997. Still, banks argue that reaffirmation prevents greedy yuppies from using bankruptcy to bail out on frivolous bills -- and running up costs for all card holders.

But consumer advocates paint an equally compelling picture of bankrupt debtors they most often see victimized by reaffirmation. Trapped in a world of back-breaking jobs, rust-bucket cars, taped glasses, permanent coughs and limps, with bosses who fire them on five minutes notice, they reaffirm debts because they don't understand their legal rights. A debtor often reaffirms a car loan fearing the repo man. Or he envisions a store manager invading his home to grab a half-paid-for refrigerator charged on his card.

"Don't be panicked into thinking reaffirmation will save you."

Reaffirmation can ruin a fresh start
Attorney Tobey Daluz has a unique perspective on the controversy. She represents big, unsecured corporate creditors for her white-shoe Philadelphia law firm and advises bankrupt indigents pro bono at the Consumer Bankruptcy Assistance Project. "Don't be panicked into thinking reaffirmation will save you," she advises frantic debtors. "The reality of bankruptcy is some hard years but, unless you reaffirm, also the chance at a fresh start."

In most states, if a filer is current in his payments, his car can not be repossessed when he files bankruptcy. As for the fridge scenario, it's illegal for a creditor to enter a debtor's home without permission. A filer can return property on which he owes money and make no further payments. If the payments equal the current market value of an item thatâ??s been charged, the bankruptcy court often categorizes it as exempt property that the filer gets to keep. (How much property is protected by exemption varies according to state law).

The debtors suing Sears claimed they were lied to about these rights and threatened. On April 9, 1997, Sears agreed to reimburse an estimated 325,000 credit card reaffirmations plus finance charges and late fees, 8 percent interest and a $100 gift certificate to each debtor involved. Sears also will pay $240,000 to state programs educating bankrupt consumers about their rights. And the retail chain must tell credit bureaus to correct negative reports related to debtors who fell behind in reaffirmation agreements.

A debtor who reaffirms may be heeding the axiom of financial columnists; the cure for a bad credit rating is to incur one more debt then pay it off in installments. Credit bureaus note bankruptcies for 10 years. Is reaffirming a fix for that black mark? Visa USA is airing radio ads in 20 cities warning card holders that bankruptcy makes it harder to get a job, rent an apartment, or even buy insurance.

"It defeats bankruptcy's purpose of wiping the slate clean for a fresh start."

"...it's a terrible idea to reaffirm"
The ads urge over-extended customers to visit the nonprofit, nonpartisan National Foundation for Consumer Credit for guidance. "Well, I don't know if this is what Visa wants to hear, but in the vast majority of cases it's a terrible idea for a bankrupt filer to reaffirm," says foundation education director Barbara Morgan. "It doesn't make much difference to credit bureaus that we can tell. It defeats bankruptcy's purpose of wiping the slate clean for a fresh start."

Morgan adds: "The only example I can think of when reaffirmation might be useful to the debtor is if he travels on business constantly and his company refuses to prepay his rental car and hotel so he needs a card for that."

Chapter 7 bankruptcy was intended for the low-income or jobless debtor. Individuals earning a living wage file Chapter 13 bankruptcy, meaning they pay most of their debts from their wages in 3 years to 5 years under court supervision.

Despite our nation's low unemployment and job growth statistics, the American Bankers Association found that 70 percent of bankruptcies now filed are Chapter 7, in which credit card debt need never be paid. "Reaffirmation law does protect the industry from affluent debtors abusing Chapter 7 to avoid paying bills," says MasterCard senior vice president William Binzel. "There are debtors filing Chapter 7 earning incomes high enough for them to be in Chapter 13 repayment plans."

A good deal for creditors -- even when it's illegal
And reaffirmation is lucrative for creditors, even in the Sears disaster. The retail chain has so far paid $125 million to settle its reaffirmation lawsuit. Sears told the Securities and Exchange Commission it probably collected as much as $400 million via dubious reaffirmations.

Bank card companies trotted out examples of selfish, deadbeat yuppies when the National Bankruptcy Review Commission examined reaffirmation last year. Commission member Judge Edith Jones, an appellate judge on the Fifth Circuit in New Orleans, recalls the weird case of Orange Beach, an Alabama resort where, "a lot of people accumulated huge card debt because they said a man must own a great bass boat and a Jet Ski ... to hold his head high."

Congress appointed the nine commission members -- judges, attorneys and one accountant -- to draft a proposed revision of national bankruptcy law. But reaffirmation had the buttoned-down professionals screaming insults at each other and (in one bad breakfast meeting) coming close to a pastry fight, some sources say. The commission finally approved a proposal to ban reaffirmation in Chapter 7 bankruptcies by a 5-to-4 vote. Judge Jones, an appellate judge on the Fifth Circuit in Houston, wrote the vehement dissenting opinion.

"It's a myth that people filing bankruptcy with big credit card debt are poor. I don't believe being poor automatically makes a person a victim."


Are the bankrupt victims -- or victimizers
Visa USA calculates that 1.4 million personal bankruptcies in 1997 cost the American economy $44 billion. Visa and MasterCard International are lobbying for Congressional bill HR 3146 which forces bankrupt filers with the median national income ($51,000 for a family of four) into Chapter 13 repayment and protects Chapter 7 reaffirmations. "It's a myth that people filing bankruptcy with big credit card debt are poor," Judge Jones says. "I don't believe being poor automatically makes a person a victim. There's a boom in bankruptcy due to a lack of responsibility, more than lack of income."

But consumer counselors wonder whether journalists, political leaders and financial executives shaping national financial policy have any idea about what living on a low, or even average income, is now like. "We're seeing a lot of people like that with big medical bills on their cards, especially with an aging population and employers cutting out, or charging more, for health insurance," says Morgan of the National Foundation for Consumer Credit.

 

Neo,

They can if it's in the original agreement or otherwise allowed by your state.

You really need the original agreement and whatever they are saying you re-affirmed.

You think you did re-affirm? I think that's shady all the way around.

I'm still not clear if this is with cap one or a collection agency -- either way, under the accuracy duties or validation you should be able to find out, IF there's anything at all.

I really think if this is with a collection agency, they may be trying to get you to re-affirm.

Have you sent them anything in writing yet?

It is bothering me that you are still being charged and only finding out via your CR's, seems to me you're entitled to a bill, then you could use the FCBA as well.

Sassy

 

Did they validate, neo?

They either bought it or it was assigned -- if a CA has it, cap one shouldn't be charging you interest, something is hokey there. How are they reporting on your CR's?

If cap one sold or assigned it, you shouldn't have a balance on your reports, it should be 0 and say that it was transferred or sold.

The CA should show up listing cap one as the original creditor.

They should have told you if you did receive validation because they need to prove to you that you really owe THEM the debt. I could type you up a bill if you want, add interest and fees, say that you re-affirmed.

Are CA's required to be licensed in your state? are they licensed?

Take a breath, type a summary of what you've done so far and post it -- that's what is missing you can't tell who's doing what to who.

Cap One $$$$ included in C7 BK, discharged on

Cap One re-affirmed -- account charged-off (second time)

Cap One sold/assigned to collection agency.

Validation letter sent

Received ????? in response

You've so many options, neo, but each post reveals a little more, do a summary so you can get the help you need and deserve -- someone's definately playing with you.

Sassy

 

neo,

How come you don't want to pursue the illegality of the re-affirmation agreement?

It's not legal or enforceable unless the BK Court approved it and usually they don't or won't if unsecured as it spits in the face of the purpose for BK protection in the first place.

Sassy

 

5. The United States Bankruptcy Code provides, however, that a debtor may agree with a creditor that the creditor can enforce what would otherwise be a discharged debt. In other words, a debtor may reaffirm his or her pre-petition debts, as long as certain requirements are met. These so-called "reaffirmation agreements" are enforceable only if, among other things, the agreement is filed with the bankruptcy court. If the debtor is not represented by an attorney, the bankruptcy court must hold a hearing to determine that the reaffirmation agreement would not impose an undue hardship on the debtor and is in the best interest of the debtor, and must approve the reaffirmation agreement before it becomes enforceable. 11 U.S.C. § 524(c) and (d).

6. If the requirements of 11 U.S.C. § 524(c) and (d) are not met, an agreement to reaffirm a debt is not binding and a creditor violates the bankruptcy code if it attempts to collect that debt. 11 U.S.C. § 524(a).

 

hmmmmmmmm ok.

You sent a validation letter to Arrow, did they respond with anything? or is the only documentation the letter from Cap One?

When you send a validation letter, the CA is supposed to get the documentation from the OC but the CA is the one that has to relay it to you.

Did they send a copy of your agreement, the original?

the agreement reaffirming the debt?

a statement of your account history that matches whatever they are claiming you owe?

anything establishing their authority to collect? why you owe ARROW money and not Cap One.

When you sent the validation did they mark the tradeline in dispute?

SOL, if discharged in 1998, reaffirmed in 1998 as well, when was the last time you paid them anything? What's the SOL in your state for enforcement? Could well have come and gone already if you never paid.

It's important that Cap One only says in a letter that you reaffirmed but didn't provide you any documentation. How are you to know they're not blowing smoke? You said you were talking to your attorney, did he say the same?

If you don't have your BK papers and no one is coughing them up for you, you can register for pacer, free, and you can check them yourself online. The fact is, if the judge didn't approve your re-affirmation, it is tough noogies for all of them if that's a direction you are willing to pursue.

Did you check to see if Arrow was licensed in your state to collect?

I would dig up my BK papers, if you can't find them, get them from your attorney, if he's a goober, do the pacer thing -- I'd not trust a one of them to tell you the truth, Neo, you owe it to yourself to have what you need to make an intelligent decision. If you don't have the records, Arrow should provide them if they are authorized to collect, it's in their best interest to do so, they should get them from Cap One and mail them to you AND it's your legal right to request them before paying.

If Arrow is authorized to collect on behalf of Cap One, they need to provide that documentation and jump through those validation hoops. You deserve no less than minimum validation: a copy of your signed contract and agreement, a copy of your reaffirmation agreement and the judge's acceptance of it, a complete statement of accounting that equals whatever they are claiming you owe, and proof that you owe Arrow and not Cap One. The statement of accounting should include your last payment date, Cap One was required to provide that to the CRA's within 90 days of turfing you to Arrow -- that's the month and year immediately proceeding the commencement of the delinquency date. If they didn't do that or you don't have documentation, how are you supposed to know when the reporting time is up?

If you didn't get from Arrow a complete validation, tell them you need it. I declared bankruptcy and this was discharged, yep Cap One says I reaffirmed, but I was never provided copies of those documents. For the same reason, I can't tell how much I owe you, the amount changes every month, that's why I need a statement of accounting -- you say I owe you xxxxxx dollars but Cap One said the discharged amount was 300, I can't figure out how you've computed how much you claim I owe. I'm not sure that I owe you anything, why don't I owe Cap One if this is my debt? Please provide me copies of all documents I requested in my validation letter dated xx/xx/xx and allow me 30 days to review this information.

I am concerned you are trying to collect from me a debt that was discharged, I'm sure you agree that violations of the US BK Code are very serious and carry severe penalties. I am compelled to verify that my rights are preserved while I strive to reestablish my financial responsibility. The decision to pursue BK was not one that I made without much thoughtful consideration, I am trying to resolve this matter but need copies of the documentation requested to be able to do so.

That's what I would do. They'll likely keep tacking on interest until you make an agreement to pay, but they still have to prove what they are charging, every penny, until the fat lady sings.

Sassy

 

yw neo, I even started another thread just for you, thinking this one was buried, I can't figure the lack of responses.

OHHHH, charge off date is 11/98 eh? and they say your attorney received and signed for it 12/98, but they've promised 3 times to send you that reaffirmation and haven't , I don't think they have it, neo. I'd bet you some buckeyes even, LOL, Mr. Sassy is originally from Ohio.

So according to the FTC, they were being unfair and deceptive in trying to collect from you a debt you don't owe, still are, both of them. And, there's a FTC Staff Opinion letter making Cap One accountable for Arrow as the CA, no way they can get around that.

Even with the enforcement SOL to 11/02 by my calculations, they wouldn't be smart to pursue any action without having their ducks in a row, and they aren't lining up -- even if they tried to enforce it you could tell the judge the same thing. I don't recall having reaffirmed, it's a legally questionable practice, and they won't provide me a copy of any documentation.

Arrow can't do anything else until they provide you the requested validation documentation without incurring further violations anyway. Including continuing to update your reports.

Oh now wait a second, how can they say it was charged off in 11/98, it was discharged then, there was nothing for them to charge-off! bzzzzzzzzzzzzzz, wrong answer, Cap One.

They couldn't have charged-off in 11/98, they say your attorney didn't receive or sign for it until 12/98.
I've met some dumb attorneys but if yours reaffirmed for you before you even had a chance to spend anything, send him the bill.

There's an FTC Opinion letter on that too, reporting a charge-off instead of listing as included in BK.

You could then, send a second validation letter; send the estoppel letter; send a variation of the second letter saying it's illegal to attempt to collect discharged debts; you could file in small claims court for violations of the FCRA and BK Code, plus FDCPA for Arrow.

If Arrow is the one continuing to update since you requested validation, that's another violation. I'm guessing they haven't marked as disputed, there's another, two if Cap One is wrong as well.

I don't recall having reaffirmed, the dates and balances are hokey, you won't substantiate your claim by providing documentation as requested and legally required, you are attempting to collect a discharged debt -- to cure these violations delete the tradelines from my reports or I will be compelled to consider legal action to protect my rights.

That's what I would do, neo

If you want to do court action, we could easily come up with a half page of violations for each of them.

It's your ball, what do you feel comfortable with?

Sassy

 

neo,

I keep thinking about this, besides just how plain WRONG it is for them to keep trampling on you.

The easiest thing to do, since Arrow hasn't responded, is to just send the estoppel letter.

You could save the BK stuff as your big whammy, should they not want to do the right thing.

Sassy

 

Neo!!!!!!!!!!!!!

I'm so excited, check this out:

Reaffirmation agreements are governed by 11 U.S.C. §524(c).

The section provides as follows:

(c) An agreement between a holder of a claim and the debtor, the consideration for which, in whole or in part, is based on a debt that is dischargeable in a case under this title is enforceable only to an extent enforceable under applicable nonbankruptcy law, whether or not a discharge of such debt is waived, only if --

(1) such agreement was made before the granting of the discharge under section 727, 1141, 1128 , or 1328 of this title;

BEFORE, it has to be before discharged, LOL LOL, there's no way that have it or that you reaffirmed, by THEIR own letter.

A happy dance for you!

Sassy

 

Nice work Sassy,