This is an issue that my mother in-law is currently going through and I am totally stumped as to what she should do. Here are the facts: The state that this is occuring in is Texas. In 1997 my husband's brother bought furniture on credit and my mother in-law co-signed for it. The credit line was issued by the store itself and not through a major charge card company. He later decided to return the furniture and received a refund. The brother died in 1998. Nothing more was heard about this matter until late 2003 a collection agency called my mother in-law and said that the furniture store had gone out of business and they were taking care of all open accounts. They said they did not have any record of the furniture being returned and want the money paid in full. The only proof that the furniture ever was returned was the return receipt and unfortunately, the brother's widow has no idea where it is and it is presumably lost. Any suggestions?
Start with validation. Secondly, was there a will or not? If not, did the estate go thru probate? Finally, the SOL is only 4 years, you could just tell them to go pound sand, but I would start with validation.
jlynn, There was a will, but the brother died in 1998 and at the time, the furniture had been returned a year earlier and nobody thought there was an issue. Now, 6 years later, they claim there was no return and the money is still owed. I thought of validation, however this is problematic because they presumably have record of the furniture being purchased on a credit agreement, but they conveniently don't have the record of the return. Without the return receipt, is there any recourse? I realize the SOL will prevent them from suing, I just don't want this to go on her credit report. Nadine
1. The facts and circumstances you describe are exactly why there IS a Statute of Limitations. 2. The debt itself has a SOL for suit (expired - it is 4 years in Texas) and for reporting, which is 7 years from the Status Date. The furniture was returned in 1997? That obviously means the payments stopped in 1997, so the Status Date is 1997. If they report it on her credit, one of two things will happen: 2A: It will go on her credit as a 1997 default and come right off her credit as ancient under FCRA, or 2B: The CA re-ages the account (changes the status date), at which time she sues the CA for the FCRA violation.
If they provided their own credit to customers, they probably both checked and reported to a local CRA. Find which CRA this was, and confirm with them both that the company had routinely used them for credit inquiries as well as reporting of delinquent accounts, and confirm that no such delinquent account was ever reported against your brother in law. Do you have witnesses to the return of the furniture, whether loading it to return it, or better, at the store when the refund was made? Do you know to whom the return was made? Does the business have a poor record with the BBB for dealing with billing issues? File fraud charges with local DA for fraudulent attempt to collect on a non-existent debt.
Re: Re: I can't figure this one out... Everyone, Thanks for the advice. In regards to this furniture company, it was shut down by the state of Texas for fraud (what a shock). From what I understand, they were money laundering. There were witnesses to the return, and I believe the way the return worked, the amount "charged" on the store's credit line was refunded and proof of this was provided in the form of a receipt, probably similar to what you get when you return anything to a store. This collection agency was not hired by the original store - I'm not sure who they represent, but evidently they are going through the store's books and trying to collect on open accounts. I'm going to talk to my mother in-law this weekend and pull her credit report and then go from there. Nadine
Re: Re: I can't figure this one out... Did any of the principals of the company get convicted of money laundering as part of the shutdown of the company?
