to Chuck (& Kristi)

Discussion in 'Credit Talk' started by Pat, Oct 30, 2000.

  1. Pat

    Pat Guest

    Chet stated

    "Citibank keeps that information on their *internal* records indefinetely (directly from their mouths)! They had my old account numbers and the amounts owed - so they
    allowed me to set up a payment plan to pay back the money,they said after the balance is paid, that they would issue me a card!


    Chet was told by Citibank that in exchange of his payment of $4500 on a debt discharged by bankruptcy, Citibank would extend him credit. Citibank's offer to extend credit constitutes consideration. Chet accepted Citibank's offer, and began to tender the bargained for consideration. This agreement does not involve the sale of goods, no does it specifically last more than one year, so a writing is not required (pursuant to the Statute of Frauds), and this is an enforceable contractual agreement. If Chet had a tape of the conversation, a court would consider the agreement enforceable.

    The issue of whether a bankruptcy court's approval of the repayment agreement pursuant to 11 U.S.C. § 524 is necessary centers on whether Chet's repayment is, in fact, voluntary.

    the question has been posed as follows by one appellate court:

    (the question is)whether any inducement by a creditor renders repayment of a discharged debt involuntary and thus in violation of § 524(a)

    the case law is clear that such an inducement does render the payment involuntary:

    Watkins v. Guardian Loan Co. of Massapequa, Inc. (In re Watkins), Chapter 7, Case No.
    894-86473-478, Adversary Proceeding No. 898-8640-478, UNITED STATES BANKRUPTCY COURT

    Chuck- you can look up the case and share your thoughts. The issue turns on what the courts deem "voluntary" pursuant to the statute.
  2. Pat

    Pat Guest

    it does not specifically last for more than one year

  3. kristi

    kristi Guest

    This is no doubt a touchy area however there is in my opinion and the attorney I consult withs opinion that there is a distinct difference in VPP and Reaff.

    Voluntary PP means absolutely no inducement or dunning involved on the discharged debt. That means the debtor has a right to repay a debt outside the BK on a voluntary basis so as the creditor understands that it is a VPP and nothing can be directed to the debtor in way of statements referring to amount dues or sending past due notices.

    I am extremely cautious when a debtor approaches me to do a VPP. I explain their full rights of not having to pay and I make a statement of intentions that clearly defines that the debtor is doing this on a voluntary basis and can stop at any time. Further more we make it very clear that no notices or requests for payment will be sent. We keep track of the VPP on a ledger and when and if the debtor stops, we do not even send a VPP reminder. One must be very careful in accepting VPP because there is a fine line between it and making it an illegal Reaff.

    Just my opinion, I do not give legal advice.
    Dont you luv those annoying disclaimers?

    Pat wrote:
    it does not specifically last for more than one year

  4. pat

    pat Guest

    I agree with you and the attorney you know as to VPP; I believe that Citibank crossed the line by inducing Chet to repay via an offer to extend credit in exchange for his repayment.
  5. ShyGuy

    ShyGuy Well-Known Member

    How different is this from all of the folks on the board who agree to repay American Express in exchange for the once again being able to carry an Amex card? It seems like this is pretty common. Personally, I'd like to know if Discover goes for deals like this.
  6. marvin

    marvin Well-Known Member

    I think the difference here is the fact that a bankruptsy was involved, and that is what the dispute is about, whether chet can pay the prior citibank bill that was included in a previous BK.
  7. ShyGuy

    ShyGuy Well-Known Member

    Yes, but I read all the time on this board and others about people agreeing to repay Amex discharged debts in exchange for once again having an American Express card. So, what's the difference?
  8. kristi

    kristi Guest

    Yes I agree as well if they inticed him.

    pat wrote:
    I agree with you and the attorney you know as to VPP; I believe that Citibank crossed the line by inducing Chet to repay via an offer to extend credit in exchange for his repayment.
  9. Saar

    Saar Banned

    That's another issue. If the debt was not included in the bankruptcy, it is legally allowed to enter into a binding agreement reaffirming it, without court approval. that's true whether the SOL time period has already passed or not.

  10. ShyGuy

    ShyGuy Well-Known Member

    Saar, I'm talking about discharged debts. Another board I read is filled with people who want to once again have an Amex card. Amex's policy is that first these people have to pay back Amex debts that were discharged in BK. And I always read that Amex and Citi have the longest memories -- almost never forgetting about a discharged debt.

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