Can credit card collectors come for my house and how long do I have after defaulting?

[Anonymous]

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@dynamicvb wrote:

That is a lot of CC debt. I would expect the interest to be killing you. Might want to talk to a lawyer about BK13. You can keep the house and the car and just make payments for 3-5 years. Most of the CC debt would get wiped. This may protect you better than fighting them in court. with those amounts, I would definitely expect to be sued.

This is just my opinion and others may have some better different advise on handling this one.

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The OP has too much debt for a CH13 - would have to go Ch11.

[Anonymous]

Yeah I've dealt with collection and rebuilding my mothers credit before so I'm somewhat familiar. From what I remember reading, if you send them a CND they'll either sell it to another collector or file for a judement? I think I would get a new number for this purpose just so they don't bug me on my own phone but also don't want to make them keep looking for me because one fear I have which wsan't an issue in the old days of credit repair is if they find my social media accounts and start contacting friends with the excuse that they couldn't find me. I can't hide on social media due to the nature of my business but I will if I have to. I'm willing to deal with all of that at this point. Just looking to minimize the damage and keep as much as I can. Your answers seem to be what I was looking for. Thanks

[Anonymous]

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@Anonymous wrote:

My cards are 15k to 25k each. Totaling about 200k. Can/will any of these creditors, some of which I owe 50k+ (multiple cards), come after my primary residence if they obtain a judgment? I know the homestead exemption in Georgia is about 21k so it would seem that they would come for my house, but how typical is it for them to do that? How long do you think it would take before the first judgement? I'm thinking about a year?

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Also, something else to think about when this is all going down. If you do get sued in court over this stuff (it is rare, but it does happen) then that doesn't mean you are sunk. That is merely a new front in the war.

The key is that you want to avoid a default judgment. Collection attorneys are the lowest qualified in the legal game. They are typically from the worst law schools that take any mouth breather. The reason why is because there is very little money to be made suing poor unemployed people with defaulted debt. So most real lawyers won't touch this stuff. The few low rent lawyers that play in this arena are filing 20-100 lawsuits at a time and they are praying that nobody responds so that they get an easy default judgment with very little actual legal work to do.

If you merely file an ANSWER to the lawsuit, that messes up everything in their game plan. Filing an answer is easy. You basically just respond with, "The defendant does not have enough information to admit or deny the allegations. Therefore the defendand denies all allegations." Google how to file a lawsuit answer. It is easy. Mail a copy to the plaintiff's lawyer. File a copy with the court. Then show up on court hearing day and refuse to settle.

So now the plaintiff's lawyer will be ticked off because he didn't get the easy default judgment. He was only paid a token fee by the bank based on some basic paperwork and one hearing. So now he has to go back to the bank and say, "hey, this guy responded. That $700 you paid us for this file now requires $10,000 because we have to plan for discovery, a few more hearings, plan for trial, engage in mandated mediation, etc" 

So the bank manager in the legal department is now saying, "christ, this defaulted debt is only worth $10,000. Does it really make sense to pay $10,000 in legal fees to chase a $10,000 debt? And even if we "win" we probably still won't collect anything. Phuck it. Just try to settle with the guy. Will he pay us $500 and we all dismiss?"

Then their lawyer tries to negotiate with you for a token settlement to each walk away because they really don't want to go to trial on this matter. The bottom line is that you can basically make them go away and pay them nothing. 

If you are really advanced you file a counter lawsuit for violation of the FDCPA and/or FDCPA and defamation and libel. Then you force them to pay you $1,000 as a token settlement to allow them to walk away with mutual dismissals and them deleting all negatives on your credit files.

It is all great fun. I actually get excited when it happens.

[Anonymous]

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@Anonymous wrote:

From what I remember reading, if you send them a CND they'll either sell it to another collector or file for a judement? 

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There is no such thing as "file for a judgment". They have to file a lawsuit and go through the entire court process. With just some basic paperwork you can mess with them in court. See my previous post. 

If they sell it to another collection agency, just send another CND. No big deal.

[Anonymous]

Thanks for all the info! I remember reading about not ignoring the lawsuit and all that but since we're talking about 20-30k cards i wasn't sure if they'll make an extra efford to go after me.

One thing I might try doing is while it's still with the OC's internal collection department I'll send in a couple hundred bucks every now and then to see if it would prolong the 6 month period that it takes them to sell to a JDB. Just to buy me some more time and make the debt older/less valuable. I wouldn't do that once it's with the JDB though as that would be admiting that I owe that money.

[vntrsc]

Depending upon your state laws, a payment could reset the statute of limitations on the account. 

Whether or not collection lawsuits are the exception rather than the norm really doesn’t matter.  Even if they are the exception, there is no way to predict if you will be one of those that will or will not be sued.  

If if it were me, I would talk to some attorneys about my options so that I could determine what is best under my circumstances.  

[Anonymous]

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@Anonymous wrote:

Thanks for all the info! I remember reading about not ignoring the lawsuit and all that but since we're talking about 20-30k cards i wasn't sure if they'll make an extra efford to go after me.

One thing I might try doing is while it's still with the OC's internal collection department I'll send in a couple hundred bucks every now and then to see if it would prolong the 6 month period that it takes them to sell to a JDB. Just to buy me some more time and make the debt older/less valuable. I wouldn't do that once it's with the JDB though as that would be admiting that I owe that money.

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The only think a couple of hundred bucks will do is re-start the Statute of Limitatuins clock - something you don't want to do.

[ItsCASHual]

 I am not an expert by any means but I will say that I would be nervous in your situation. I've had a lawsuit filed against me a year ago for $1,400 owed on a defaulted Care Credit account with Synchrony Bank. My salary is $85 K so I'm not a millionaire or anything close. It was about 6 months after charge-off that the process server came to my house.

I did file a response with the court within 21 days and I did go to the court hearing on the assigned date and time. The lawyer that I met was able to work out a deal with me right then and there and I was lucky to avoid a judgment on my record. I worked my deal out for payment in full over 5 months time. I fulfilled my end of the deal.

I would think for the amount of debt you are referring to, you can expect some filed lawsuits to follow. It's just a matter of time. Maybe not all,  but some will, in my opinion.

[Anonymous]

@OP you have received some good advice/options from the great MyFico members.  I will say be careful with some of the stuff told to you.

The claims that @rocketgoboom made about fees the creditors pay the firms to collect couldn't be further from the truth.  THey don't pay a "fixed rate" to collect a file (maybe only exception could be a small credit union or some one off, but something tells me your credit cards are with major creditors), major creditors place hundreds of files a month with a firm to collect.  If it really cost $10,000 a pop everytime discovery, hearings, trial, no creditor would ever sue.  As much as these attorneys and firms are bashed, they are sophisticated and are a well oiled machine for the basic default judgment all the way to propounding discovery, depositions, motions, mediation, hearings, you name it. Its not an overly complex process at all.  JDB's are "easier" to try to strong arm, but they are more likely to sue for any amount. 

FDCPA does not apply to original creditors, so the only way a token settlement would work is if the law firm or collection agency messes up.  In some states they have mini FDCPA's i.e. California that apply to original creditors.

If you are comfortable saying what creditors you have, you might get some specific feedback from people and their experiences.

[Anonymous]

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@Anonymous wrote:

@OP you have received some good advice/options from the great MyFico members.  I will say be careful with some of the stuff told to you.

@Anonymous claims that @Anonymous made about fees the creditors pay the firms to collect couldn't be further from the truth.  THey don't pay a "fixed rate" to collect a file (maybe only exception could be a small credit union or some one off, but something tells me your credit cards are with major creditors), major creditors place hundreds of files a month with a firm to collect.  If it really cost $10,000 a pop everytime discovery, hearings, trial, no creditor would ever sue.  As much as these attorneys and firms are bashed, they are sophisticated and are a well oiled machine for the basic default judgment all the way to propounding discovery, depositions, motions, mediation, hearings, you name it. Its not an overly complex process at all.  JDB's are "easier" to try to strong arm, but they are more likely to sue for any amount. 

FDCPA does not apply to original creditors, so the only way a token settlement would work is if the law firm or collection agency messes up.  In some states they have mini FDCPA's i.e. California that apply to original creditors.

If you are comfortable saying what creditors you have, you might get some specific feedback from people and their experiences.

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Pretty much all the major banks. Amex, Citi, Chase, BOA, PNC, Discover, US Bank, Nationwide Bank, Wells Fargo. I have business credit(with PG) with most of them too. The business was just a real estate holding LLC which hasn't owned any real estate in more than a year.