Seattle Bankruptcy News - Symmes Law Group

How to Manage Old Debt After Recent Supreme Court Ruling

How to Manage Old Debt After Recent Supreme Court Ruling

Old DebtIt’s easier for old debt to haunt American consumers seeking refuge in bankruptcy, thanks to a recent ruling by the Supreme Court in Midland Funding, LLC v. Johnson (2017). I have blogged before about Midland Funding and their reputation for collecting on stale debts and debt that they may not even be able to prove that you owe. Unfortunately they are one of the largest debt collectors that are out there and now the Supreme Court seems to have no problem with some of their fraudulent practices.  I discussed how to manage old debt on 1150AM KKNW in Seattle, Washington with Dr. James Gore on the New Urban Unlimited Show and you can listen to our discussion here:

The nation’s highest court said debt collectors can try to collect on expired debt through bankruptcy proceedings without running afoul of the Fair Debt Collection Practices Act (FDCPA), reversing a lower court’s decision. The case started when an Alabama debtor sued Midland Funding, LLC under the FDCPA for filing a proof of claim in Ms. Johnson’s chapter 13 bankruptcy case related a time-barred $1,900 credit card debt that was over 10 years old. In Washington state, creditors have 6 years to collect on a debt from the last account activity which is called the statute of limitations.  The new ruling diminishes much of the liability collectors previously faced when filing bankruptcy claims for debt that passed a state’s statute of limitations. The Eleventh Circuit had ruled in a 2014 case that the strategy violated the FDCPA, dissuading many debt collectors from the practice.

Because of the Supreme Court ruling in this case, bankruptcy attorneys and consumers will no doubt see more stale claims being filed in the bankruptcy court. If consumers don’t know that they have the right to object to the claims, they will be required to pay more into a Chapter 13 payment plan than otherwise needed.
The decision also emphasizes how careful consumers should be when it comes to old debts. Creditors and debt collectors can try to collect expired debt forever by calling or writing letters, but there are laws in place to protect consumers. Here’s what you should know about old debts to use the law to your advantage

Know the statute of limitations when collecting on old debt: While the ruling allows debt collectors to try to recoup expired debt in bankruptcy, they still can’t file a lawsuit against you for the debt. Each state determines how long a creditor or debt collector can sue for an expired debt, which can range from three to 10 years. The length depends on the type of debt and type of contract. The clock starts from your last account transaction. In Washington state the statute of limitations is 6 years.

Get verification of the old debt: If a debt collector calls or sends a letter to collect an old debt, you should respond in writing and ask to be provided verification to make sure the debt is yours with the date of last payment. You will also want to ask for proof that the debt collector has standing to collect on the debt. Your request for verification must happen within 30 days of getting a written notice of the debt. Debt collectors can’t collect debt until they provide verification. If the debt is outdated, you can use the written verification as proof of its expiration if the collector continues to come after you.

Stop annoying calls and letters trying to collect the old debt: By law, debt collectors must stop unwanted telephone contact if requested by the consumer in writing, no matter if the debt has expired. Document when you make your request. Specifically you should ask not be contacted again regarding the debt in any manner. Send by certified mail and get a return receipt. Keep a copy of the letter and return receipt for your records just in case the debt collector continues to call. This could be grounds for a FDCPA violation and statutory damages to you in the amount of $1,000.

Don’t ignore a court summons related to the old debt: You should never ignore a summons and complaint. Doing so could result in a default judgment against you and then attorney fees, interest, and penalties could be tacked on. Some debt collectors still try to sue for outdated debt as a pressure tactic. If the debt is time barred, you can use this as a defense to win your case. If you ignore the suit, you could end up having your wages or bank accounts garnished, not to mention a judgment showing up on your credit report.

If you pay the old debt, make you sure you get documentation: If you have decided to pay the old debt or negotiate a settlement, make sure you get the terms in writing. The agreement should state that the amount settles the entire debt and you are released from any further obligation. Never send a good-faith payment because it could restart the statute of limitations clock and allow the debt collector to sue you. Keep in mind however, that you making a payment on the expired debt will validate any negative reporting on your credit report, although the debt would be updated to satisfied, or settled for less than the full balance, rather than delinquent. However it could stay on your credit report for another 7 years.

Know how the old debt affects your credit scores: Even if a debt is past the statute of limitations, it can still show up on your credit report and hurt your credit score. Negative items don’t fall off credit reports until after seven years from the date of your last account transaction. That means although creditors may be time-barred from suing to collect your credit-card debt after only six years, the debt can remain on your credit report for another year. Making a payment can validate a debt and cause the debt to be reported as settled or settled for less than the full balance for another 7 years. If you are going to pay the debt, you should first try to ask for a “pay for deletion” where the debt collector agrees to delete the item off your credit report entirely. Many debt collectors may agree to this If you pay them in full, while others will just refuse to take you up on this offer.

Object to the old debt in bankruptcy: If you’re filing for Chapter 7 or 13 bankruptcy, review each proof of claim from every creditor. In chapter 13 case you can monitor your claims activity online. You can challenge a claim for many reasons, including expiration, by filing a written objection with the court. A judge will determine if the claim is valid. I would expect we should be seeing more time bared claims filed in the future

If you live in Washington State and are looking for assisting in managing your old debt, give Symmes Law Group a call at 206-682-7975 to speak to a debt relief attorney and learn about your options.

Posted in Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Media & Press, Seattle Debt Settlement Tagged with:

Can an Attorney Help You Buy and Sell Real Estate?

Can an Attorney Help You Buy and Sell Real Estate?

attorney to buy and sell real estateYes! In fact this can be a way you can save a significant amount of money on your real estate transactions.  I had the opportunity to discuss whether an attorney can help you buy and sell real estate on 1150 AM KKNW which you can listen to here:

Do I Have to Hire a Traditional Real Estate Broker to Sell My House?

The short answer is no you don’t have to hire a real estate broker to sell your house, but like any situation there are benefits and drawbacks either way you go.

Can I Hire an Attorney to assist with a Real Estate Transaction?

Yes. The web has transformed the way people buy and sell real estate. Today there are not many secrets to buying or selling a house. Most people just need an experienced professional to assist in negotiating and closing the deal, and they should not have to pay a full commission. We work for a 1.5% commission that is less – sometimes WAY less – than what you would pay a typical agent.

What if I Just Want to Make an Offer on a house without an Agent?

A lawyer can assist with this, however most buyers agents are paid by the seller at closing, unless the transaction is a non MLS transaction in which the seller states the buyers agent will not be paid by the seller. Therefore in an MLS transaction an attorney can rebate back to the buyer a percentage of the commission or charge a flat fee for each offer drawn up on behalf of the client.

What are the professional costs associated with a Real Estate Transaction and How Much Can I save by Hiring a Lawyer?

Most residential real estate transactions in Washington involve licensed real estate brokers, in which a buyers broker is paid 3% commission and sellers broker is paid 3% of a commission. These brokers are usually part of the Multiple Listing Service (MLS) in which MLS forms are used and the language in the forms are standard and required if listing a property on the MLS. Brokers are allowed to fill out the forms but not make changes to the forms.

If you use an attorney, they can use their own forms or amend the MLS forms to whatever language they want to use which doesn’t require the standard commission fee’s be paid if the property is not listed on the MLS. Therefore your attorney could charge a commission of 1.5% instead of 3% or a flat fee and then state that the buyers broker has to be paid by the buyer. This would create a significant savings for a seller even if the seller has to contribute something to the buyers agent which can be negotiated.

Why Hire a Lawyer Instead of a Real Estate Broker?

(1) In this crazy hot Seattle metro market just about everything is going fairly quickly and you could list as a FSBO non MLS or submit through an MLS directory or hire a lawyer who is also a broker to list on MLS which will get picked up by Redfin, Trulia etc. My take is that most active buyers are on Redfin constantly checking houses so the MLS is becoming less necessary, especially in the Seattle market.

(2) You could also always go MLS/Broker if you don’t get the price you want initially.

(3) The amount you could potentially save by not having to pay high agent fee’s most likely exceeds what an agent would increase the sale value by actively marketing the property. As an example you could save up to 4.5% and on a $700k house that is $31,500!

(4) You don’t need to list the property online as you already have a buyer lined up.

(5) A lawyer is better equipped to negotiate a short sale on your behalf should the need arise and deals need to be worked out with the bank as well as a buyer/seller so that the bank will accept less than they are owed if a property is underwater.

(6) A lawyer has much more formal education than a broker and in essence you are getting the benefits of having your own lawyer on a transaction as well as an agent to review for what most people is the largest purchase/sale they will make. In fact a handful of lawyers or both licensed attorneys and brokers.

(7) Additional home tours, staging, videos etc. and the more traditional broker services can always be added to any transaction at cost or for a flat fee, although most basic transactions would not include these services.

When would hiring a Traditional Real Estate Broker make more sense?

(1) You feel that your property would benefit significantly from the contacts of your agent in marketing and showing your property outside of what listing the property online would bring.

(2) You simply don’t have any time to deal with showing your property and don’t mind paying the extra cost for more hand holding, house tours and house staging throughout the buying and selling process.

If you live in Washington State and are looking for a Seattle attorney to help you save money when buying and selling real estate, give Symmes Law Group a call at 206-682-7975 to speak to a real estate attorney and learn about your options.

Posted in Business Law, Media & Press

Confessions of a Seattle Bankruptcy Attorney: 5 Myths About Filing Bankruptcy

Confessions of a Seattle Bankruptcy Attorney: 5 Myths about Filing Bankruptcy

Seattle bankruptcy attorneyIn every day life, nobody goes into a business venture or every day life thinking that they will have to someday talk to a Seattle bankruptcy attorney, however one unplanned event can sometimes send people and families on a path to bankruptcy. Most Americans would rather not have to file for bankruptcy however, most consumers simply don’t have a lot of room for error in their monthly budget for unplanned expenses.  

The Federal Reserve reported in 2016 that 46% of U.S. families said they would have trouble paying emergency expenses of $400. And a 2015 MagnifyMoney survey found 56.3% of Americans have less than $1,000 in their savings account.  This means there is not a lot of room for error and one emergency room visit or auto expense or accident could send a consumer down the path to bankruptcy.

In an effort to help consumers understand all options that are available, here are 5 myths about filing bankruptcy.  You can also listen to the discussion on this topic I had on the New Urban Unlimited radio show on 1150am KKNW here:

1. Say “Goodbye” To All of Your Assets….

NOT!

Filing bankruptcy doesn’t mean you’ll lose everything.

The two most common types of consumer bankruptcy are Chapter 7, or liquidation, and Chapter 13, sometimes called a wage earner’s plan.

If you successfully file a Chapter 7 bankruptcy, the court will appoint a trustee and you will in most cases receive relief from your debts in 90 days from filing. The trustee is tasked with reviewing your assets to determine if any of them can be liquidated for the benefit of your creditors.  Most assets are protected through bankruptcy rules call exemptions, but you should talk to an experience Seattle bankruptcy attorney to make sure you are not at risk of losing anything. 

But not everyone is eligible for Chapter 7. Under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), an individual must make below their states median income for their family size  or pass the “means test,” which determines if, according to the government, that you have other expenses that would allow you to qualify for chapter 7 when you would otherwise be above your median income.  If you are below the median income you do not have to pass the means test. 

Chapter 7 bankruptcy is cheaper, easier and quicker, but it doesn’t always fit everyone’s needs.

In a Chapter 13 bankruptcy, an individual sets up a three- to five-year plan, depending on their income level, to repay their creditors. All debts are reorganized and consolidated, and the filer pays a chapter 13 trustee, who pays creditors. If you’re behind on your mortgage and want to keep the bank from foreclosing on your home during bankruptcy, a Chapter 13 can help you make up your bankruptcy arrears over five years. In chapter 13 bankruptcy, assets are not liquidated. 

2. “My credit will be destroyed for life.”

Yes, a bankruptcy can stay on your credit for 10 years after you successfully file. But look at it this way — if you’re facing debts so high you’re considering bankruptcy, it’s likely your credit is already suffering. And it’s going to be pretty difficult to start rebuilding your credit if you’re burdened by a large amount of debt. 

A large part of your credit score is looking at the amount of unsecured debt that you have at any given time.  I you have maxed out all of your cards you will never be able to improve your credit while carrying the debt load.  In many cases, those who file chapter 7 bankruptcy see increases in credit the moment they get a bankruptcy discharge order from the court.  While having a bankruptcy on your credit is a negative item, it may not be as bad as having several negative items reporting on your credit every month and having a high debt load.

Clients often report that after filing for bankruptcy they wish they had gone through with the bankruptcy filing. 

3. “I’ll never get approved for new credit again after filing bankruptcy.”

There’s no quick fix for having a bad credit score in most cases, but that doesn’t mean that you’ll never be approved for a new credit card or home loan again.  In fact it is quite the opposite after filing bankruptcy.

Many of my clients receive offers for car loans and credit cards before we have to go to court, 30 days after the case is filed. That’s because credit card companies and auto dealerships market directly to people who have filed for bankruptcy. Many of these companies can obtain your information from a list obtained from the court since a bankruptcy filing is public record.

Credit card companies and auto dealers assume people who have gone through bankruptcy have no fiscal discipline, will rack up more charges and pay more interest. Companies also know that debtors cannot file a chapter 7 bankruptcy case again 8 years since the last filing which makes it likely they will make a profit on providing new credit. 

To rebuild your credit, it’s a good idea to start with a secured card if you can’t get approved for one with a reasonable interest rate. 

4. “Only my co-signer filed bankruptcy, so it doesn’t affect me.”

If you’ve co-signed a debt, and the other person successfully files for bankruptcy and has their debt discharged, creditors can still come after you for the full amount. This happens frequently with spouses, ex-spouses, parents and children.

If you’re divorcing your spouse and bankruptcy is a concern, you should consider taking a domestic support obligation rather than something like a property settlement so you will not be responsible for debt associated with the property, like a mortgage. 

Domestic support obligations are debts in the form of alimony or child support and are not dischargeable under Chapter 7 or Chapter 13. If your ex-spouse has has filed for bankruptcy and were supposed to be liable for a debt that was discharged, you could always have the matter heard in family court if a creditor is now perusing you for a debt that your ex spouse was supposed to be responsible for. 

5. “Any Seattle bankruptcy attorney will do.”

When looking for a Seattle bankruptcy attorney I recommend working with somebody who is local, experienced in bankruptcy matters and a good communicator.

You also want someone with experience in Chapter 13 cases, not just Chapter 7 cases as you will want to know all of your options, not those just associated with chapter 13. 

When an attorney quotes a fee, make sure you understand what’s included. Some attorney will quote a low fee to get you in the door but may tack on fee’s later in the representation. The court filing fees are $335 for Chapter 7 and $310 for Chapter 13.

You will also want to check and see of your attorney will appear with you in court or send someone else and it is advised that your attorney be a member of the National Association of Consumer Bankruptcy Attorney (NACBA), as it shows your attorney is in touch with the latest updates in bankruptcy law. 

Your attorney will ultimately be responsible for guiding you during one of the most financially difficult times of your life, so take your time and choose wisely. Cost should be just one of the factors you consider when hiring an attorney, as you should ultimately feel comfortable with your decision as this is the person you will be working with for the next 90 days in Ch. 7 or possibly 5 years in Ch. 13 bankruptcy. 

If you live in Washington State and are looking for a Seattle bankruptcy lawyer to help you get out from under your debt, give Symmes Law Group a call at 206-682-7975 to speak to a bankruptcy attorney and learn about your options.

Posted in Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Foreclosure Defense, Media & Press Tagged with:

How Can Bankruptcy Help You Keep Your Home?

Bankruptcy Can Help You Keep Your Home

help-keep-my-homeFiling for bankruptcy is not something that consumers initially set out to do or are thinking about when purchasing a home.  However if the economic circumstances of a borrower change, bankruptcy can be a tool that can be utilized to help you keep your home by making up payments you are behind, stop a foreclosure sale, or even allow you to qualify for a loan modification post bankruptcy filing.

Chapter 13 Bankruptcy Can Help You Keep Your Home

Chapter 13 bankruptcy is the most common type of bankruptcy to help you keep you home.  This is because filing chapter 13 bankruptcy stops a foreclosure sale immediately at the time of filing through something called the automatic stay, chapter 13 bankruptcy allows consumers to make up payments that they are behind over a 5 year period, and even allows consumers to strip 2nd mortgages to be treated as unsecured debts if the first mortgage is worth more than the actual value of the home.

Sometime consumers use chapter 13 bankruptcy simply to stop a foreclosure sale in order to buy them some time to apply for a loan modification or sell the property by filing an emergency case filing which consists of filing a list of your creditors, the voluntary petition section of the bankruptcy petition, a statement of social security number and taking a credit counseling class.  Your additional bankruptcy schedules which include listing all of your assets, debts, income and expenses would then be due a couple weeks later in order to keep the case and the automatic stay active.  Filing an emergency bankruptcy case can keep a case active for 2 weeks to several months without making a plan payment depending on whether a consumer files all the required docs, attends 1 court meeting and goes through the motions of the chapter 13 bankruptcy process.  If plan payments are made and the debtor is within the income limits of filing chapter 13 bankruptcy, a case can last 3-5 years and can be voluntarily dismissed as any time.

If a consumers main goal is to make up the payments that they are behind on a mortgage, they can do so through chapter 13 if their household income allows them to make payments that consist of the original loan payments as well as the payments you are behind divided by 60 months.  There are also other factors involved such as other debts owed by a consumer or assets that are owned which may affect a chapter 13 plan payment.  As long as your case is active, the automatic stay will remain in affect to protect your property as long as the bank has not obtained relief from the automatic stay and as long as you are not a serial filer in bankruptcy.

Chapter 7 Bankruptcy Can Help you Keep Your Home

A chapter 7 bankruptcy is usually not the recommended method to help you keep your home, however there may be some benefit to filing chapter 7 bankruptcy if you owe other unsecured debts in which you can receive a discharge from and your home does not have too much equity.  In general, the filing of a chapter 7 bankruptcy case will stop a foreclosure sale in most cases due to the implementation of the automatic stay.  With that said, a chapter 7 is different from a chapter 13 bankruptcy in that the bankruptcy will discharge most unsecured debts within 90 days of filing.  The catch is that a trustee is appointed to your case whose has a job to liquidate non exempt assets for the benefit of your creditors.  When you file for bankruptcy you are allowed to keep a certain amount of assets based on rules called exemptions.

In Washington you can choose to use the state exemptions or federal exemptions.  The Washington state exemptions allow for a debtor to protect up to $125,000 of equity in a primary residence.  This means that if your home may have more than $125,000 in equity, then chapter 7 bankruptcy would not be recommended unless you want to risk losing your home.  Additionally, if you are thinking about moving soon, the exemption also specifies that any funds received from the sale of a home must be reinvested in a primary residence within 1 year of selling a home.  If you are current on your mortgage payments and below the exemption limit and don’t have any other non exempt assets, then your case may be wrapped up in 90 days.  If however, you have assets that need to be administered your case may be left open by a trustee until the assets can be administered.  You would still receive a discharge of your other debts in 90 days in most cases, but a trustee may wait and see if you will qualify for a loan modification or not to determine if there will be an asset that needs to be administered.

Bankruptcy Can Help You Keep Your Home by Helping You Obtain a Loan Modification

Most debtors who have fallen behind on their mortgage payments will receive several notices from their lender, informing them that they may apply for a loan modification in order to help the debtor better afford their mortgage payment.  This is called the notice of pre-foreclosure options.  The government’s HAMP program came to an end at the end of 2016, but most lenders have their own in house modification programs that borrowers can apply for.  Every bank may have difference guidelines when looking to see if you qualify for a loan modification, however all bank will be looking at a borrowers debt to income ratio to determine whether a borrower could afford the loan.  This is why bankruptcy can help you keep your home by helping you obtain a loan modification.  By filing chapter 7 bankruptcy you can eliminate debt which could improve your debt to income ratio and therefore help you obtain a loan modification.

Additionally, most lenders will review loan modification applications while a borrower is in a chapter 13 repayment plan.  If a modification is approved during a chapter 13 repayment plan, then court permission would have to be obtained to move forward with the modification.  Court approval is generally not unreasonably withheld.  Therefore if a modification is approved and is the only reason the consumer filed bankruptcy in the first place, the modification can add the arrears on to the end of the loan, and then a debtor can voluntarily dismiss their chapter 13 case.  This is different from a chapter 7 bankruptcy case where a debtor cannot voluntarily dismiss a case.

If you live in Washington State and are looking for a lawyer to help you keep your home, give Symmes Law Group a call at 206-682-7975 to speak to a bankruptcy attorney and learn about your options.

Posted in Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Foreclosure Defense Tagged with:

Do You Feel Threatened By Debt Collectors?

Threatened by Debt Collectors

Have You Been Threatened By Debt Collectors?

If you feel threatened by debt collectors you would not be alone.  A recent survey by the Consumer Financial Protection Bureau (“CFPB”) found that 1 in 4 consumers feel threatened by debt collectors.  This is not surprising to me at all based on my experience in dealing with consumers who are facing debt collection combined with the amount of scams out there who make debt collectors look even worse.

I had the opportunity to talk about the recent survey by the CFPB on 1150AM KKNW on the New Urban Unlimited radio Show with James Gore this past weekend. Below you can hit play on the player and listen to our candid conversation.

The survey reported that 40% of consumers who were contacted asked the debt collector to stop calling them but to no avail.  One pro tip is that if you really want a debt collector to stop calling you, you should send them a notice in writing telling them to stop calling you on the phone.  Make sure the letter is signed and dated and provides your contact number and address.  If the debt collector is a third party debt collector they would be bound by the fair debt collection practices act (FDCPA), and would be forbidden from contacting you by phone once the letter is received.  It is important to note that they could still contact you via mail or potentially file a lawsuit against you to collect on the debt.

Debt collection is a multi-billion dollar industry affecting 70 million consumers who have or are contacted about a debt in collection. Banks and other original creditors may collect their own debts or hire third-party debt collectors. When they fail to collect debts on their own, they often sell these debts to debt buyers. The buyers may try to collect on these debts, or hire third-party debt collectors to do so. More than 6,000 debt collection firms are estimated to operate in the United States.

More consumers complain to the CFPB about debt collection than any other financial product or service. To date, the CFPB has taken several steps to improve the debt collection marketplace and study the industry. Since 2011, the Bureau has brought more than 25 debt collection cases against first- and third-party collectors. These cases allege violations of the Fair Debt Collection Practices Act, or unfair, deceptive, and abusive collection tactics that violate the Dodd-Frank Wall Street Reform and Consumer Protection Act. These cases have brought a total of $100 million in civil penalties against debt collectors, more than $300 million in restitution to consumers, and $4 billion in debt relief for consumers.

Here are the highlights of the CFPB survey:

According to the CFPB debt collection survey, about one-third of consumers – or more than 70 million Americans – were contacted by a creditor or debt collector about a debt in the previous 12 months. Consumers are most often contacted about medical and credit card debt. The CFPB survey also found that:

  • Over one-in-four consumers report threatening contact: Twenty-seven percent of consumers approached about debt said they felt threatened by the conduct of the creditor or collector who most recently contacted them. Debt collectors are generally prohibited from tactics that tend to harass, abuse, or oppress consumers.
  • Three-in-four consumers report that debt collectors did not honor a request to cease contact: About 40 percent of consumers contacted about a debt in collection said they asked at least one debt collector or creditor to stop contacting them. Of these consumers, three-in-four said the debt collector did not honor the request to cease contact attempts.
  • More than half of consumers report incorrect contact for at least one debt: Fifty-three percent of consumers contacted about a debt in the year prior said at least one collection effort was mistaken in some way. These consumers reported that the creditor or collector sought the incorrect amount, that the debt was not owed, or that the person owing the debt was a family member.
  • Over one-third of consumers report being contacted at inconvenient times: Thirty six percent of consumers contacted about a debt in collection said that the creditor or collector who most recently contacted them called between 9 p.m. and 8 a.m. Debt collectors generally cannot call at times they know to be inconvenient unless the consumer specifically agrees to it.
  • Nearly 40 percent of consumers report that a debt collector attempted contact four or more times per week: Thirty seven percent of consumers contacted about a debt in collection report that the most recent creditor or collector to contact them usually did so four or more times in a week. About 20 percent of consumers approached by debt collectors reported contact attempts by debt collectors usually four to seven times per week. Another 17 percent said a creditor or debt collector tried contacting them eight or more times per week.
  •  One-in-seven consumers contacted about a debt report being sued: Fifteen percent of consumers contacted about a debt in collection over the prior year report being sued. The share ranges from 6 percent sued among those contacted about a single debt to 35 percent sued among consumers contacted about five or more debts. About 75 percent of those sued do not go to the court hearing, which generally makes them responsible for the debt.

In addition to the debt collection survey, the CFBP also will publish a white paper which will shed light on the debt buying business, including online marketplaces which reveal that several accounts can be purchased for less than a $1.  The new debt owner has legal rights to seek to collect the full amount of the original debt or to resell debts that are uncollected.  Even more alarming is that these accounts contain personal information including social security numbers and put in the wrong hands can do serious damage to a consumer.  The report indicates that payday loans and credit card debts are the most likely types of debts to be bought and sold.

If you live in Washington State and are dealing with a third party debt collector and have questions about it, give Symmes Law Group a call at 206-682-7975 to speak to a debt relief attorney and learn about your options.

Posted in Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Credit Repair, Foreclosure Defense, Media & Press, Seattle Debt Settlement Tagged with:

What Should I do With My Car if I Owe More Than it’s Worth?

underwater car loan

How Do I Deal With An Auto Loan That is Underwater?

One common issue that I see time and time again at an increasing pace is that consumers owe significantly more to a bank for a car than the car is actually worth.  As it turns out, www.edmunds.com has actual statistics to back this up which show that 1/3 of all auto trade-ins involve cars in which the consumer owes more than the car is worth, otherwise known as being underwater.  Making matters worse, car dealers are agreeing to take the car on trade-in and add the difference between what the car is worth and what is owed to the new car loan, which ultimately results in the consumer getting a new car that loses value the moment it is driven off the lot in addition to the underwater debt the consumers owed on their former vehicle.  So now the consumer is left with a depreciating asset that they are not likely to pay off or gain the value to correlate to what they are spending.  Don’t let yourself to fall into this trap.

I had the chance to talk with James Gore on his radio show on 1150 AM KKNW with regards how you can deal with an auto loan that is underwater and you can listen to the show here:

When shopping for a car loan you should not be spending more than you can afford and you should think about how much you will be required to spend on the loan on a monthly basis.  You will want to secure the lowest interest rate that you can, which can be done by improving your credit score.  If you are somebody who needs the latest and greatest technology, you should consider leasing a vehicle rather than taking out new loans on a depreciating asset which may drive you further into debt with nothing to show for it when it comes time to sell the car.

So How Can You Deal with An Auto Loan That is Underwater?

(1) One option is if you are considering filing for chapter 7 bankruptcy, you can simply walk away from your vehicle and the debt will be discharged with your other unsecured debts like credit cards and medical bills.  And yes you would need to surrender your vehicle back to the bank.  The good news is that you will qualify for a new auto loan that hopefully will not put you underwater, but it would most likely be at a higher interest rate than the average car loan.

(2) If you have decided to file for chapter 7 bankruptcy, another option for you is to consider having your attorney file for a redemption under section 722 of the bankruptcy code.  Filing a motion to redeem an asset while in chapter 7 bankruptcy allows a consumer to cram down the amount you have to pay on the vehicle to the vehicle’s actual value.  The catch is that you would have to pay the amount you owe in one lump sum to pay off the debt, but again that would only have to be for the actual value of the vehicle.  There are companies out there that will give you a new loan for the actual value of the vehicle if you are not able to cover the balance.  This is a good idea for consumers who have a vehicle that is worth significantly more than they owe and who are in need of a loan to cover the actual value of the car.

(3) If you don’t qualify for chapter 7 bankruptcy or are considering reorganizing your debt payments, you may want to consider chapter 13 bankruptcy.  In a chapter 13 bankruptcy, consumers can cram down their car payments to the value of their vehicle through their chapter 13 plan.  A chapter 13 plan typically lasts for 3-5 years, and if the consumers vehicle was purchased more than 910 days ago, they may be eligible to cram down the auto loan to the actual value. Of course in order to file for chapter 13 bankruptcy, you need to be able to afford your chapter 13 plan which will include your auto loan.

These are some of the most common tools at your disposal to get out from under an underwater car loan.  If for whatever reason you fall behind on your car payments, you bank will most likely seek to repossess the vehicle.  Timing on this can vary by lender, but in my experience, credit unions are the quickest on the draw.  Once a vehicle is repossessed the lender will seek to auction the vehicle to recoup some of the funds that are owed to them.  The consumer will then be on the hook for owing whatever is left on the balance of the loan minus the auction value.  At this point your lender may file a lawsuit to collect these funds which can lead to a garnishment of your wages or bank accounts, not to mention negative reporting on your credit report the minute you go delinquent or get a judgment on your record.  This of course would make it more difficult for you to obtain a favorable car loan in the future.

Now that you know what may happen if you don’t pay for your underwater auto loan, you can use the tools above to avoid anything negative from happening.  For Example once you file for chapter 7 or chapter 13 bankruptcy, nobody can collection on a debt and you can redeem or cram down your loan to the actual value, or surrender your vehicle altogether and get out from under your underwater car loan.

If you live in Washington State and are considering filing for bankruptcy and have a vehicle in which you owe more than it is worth, give Symmes Law Group a call at 206-682-7975 to speak to an experienced bankruptcy attorney and learn about your options to become debt free.

Posted in Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Media & Press Tagged with: ,

What to Expect When Dealing with Debt in 2017 and Beyond?

What to Expect When Dealing with Debt in 2017 and Beyond?

Dealing with DebtNow that the 2016 election season has concluded and we have for better or worse a new President Elect in Donald Trump I wanted to look at how his policies may change how consumers and borrowers may act when dealing with debt issues in the next 4 years and beyond.

I had the chance to discuss the topic of what to expect when dealing with debt in 2017 on 1150 AM New Urban Unlimited Radio Show in Seattle which you can listen too by clicking play on the player below:

What will happen to Dodd Frank and Consumer Financial Protection Bureau (CFPB)

Mr. Trump has stated that he intends to get rid of the Dodd Frank Act or at least parts of it that came in to law in 2010 under President Obama to avoid another mortgage crisis and to tighten lending restrictions and hold lenders and debt collectors accountable for their actions.  If the Dodd Frank act is stricken from law then lenders will be free to open up lending too many potentially unqualified borrowers.  Once these borrowers can’t pay there is the potential that the CFPB won’t be around to hold in check the big banks and debt collectors who have caused significant harm to consumers.  Just this year the CFPB has settled large disputes with Wells Fargo for opening bank accounts that nobody wanted and large debt collectors such as Midland Funding and Portfolio Recovery for unscrupulous debt collection practices.

If the CFPB isn’t around, the lending and collection industry could become the wild west once again and since lending will most likely increase to drive the economy, so too will bankruptcy filings of consumers who never should have taken out debt in the first place.

What Will Happen to Consumer Dealing with Debt Associated with Loan Modification Programs?

At the end of 2016, the federal governments homes affordable modification program (HAMP) will come to an end. This program allowed borrowers to lower their overall home payments to 31% of their gross income if they met certain requirements.  With that said the governments home affordable refinance program (HARP) will still be available for borrowers.

So what does this mean for borrowers looking to get a modification from their bank?  The first thing I would advise is to submit your modification application prior to the end of the year because in 2017 and beyond it may be more difficult to obtain a modification.  This is because the bank will rely on their own in house programs to determine whether they want to give you a loan modification or not.  This means they run their own net present value analysis and if it makes sense to give you a modification they will, but if it makes more sense to foreclose on your property they may choose that option.  Therefore in 2017 I would expect to see more borrowing from lenders to cover mortgage payments which may result in more bankruptcy filings and less loan modifications being approved.

What will happen to Consumers dealing with Student Loan Debt?

Student loan debt is a major issue in this country and it is a bubble waiting to burst.  Currently there is $1.3 Trillion dollars of outstanding student loan debt in the United States.  Presently there are few options for borrowers to rid themselves of this albatross as student loan debt in most cases is not dischargeable in bankruptcy.  In the 9th circuit we look to the Brunner test to determine dischargeablilty for bankruptcy which is a tough standard to meet.  The current government offers numerous options for federal student loan debt such as Income Based Repayment (IBR) or Pay as You Earn (PAYE) to help lower the cost of student loans on a monthly basis and forgive the debt after a number of years (10 years if working in public Service), (20-25 years for everybody else depending on the age of the loans).  The problem with this scenario is that if everybody pays the minimums on their debt for the required period of time, they still most likely will have a large tax bill to pay on the forgiven debt.

President Elect Trump hasn’t stated exactly what he is going to do to combat the student loan crisis but he has stated that he may lower repayment periods to 15 years while required 12.5% percent of discretionary income be paid into the plans.  He hasn’t laid out any options to deal with private student loans which will continue to be a burden on consumers.  With that said if consumers have a lump sum available to settle their private student loans, these lenders or associated debt collectors may accept less than the full balance on these loans.

Another option when dealing with student loan debt that Trump could consider is to make all new student loans private a keep the government out of the student loan business altogether.  In my opinion this option would be a disaster as private student loans with no federal repayment options would leave borrowers struggling to pay on their loans and could force them to hire private companies to refinance the loans they are given, which in the end would benefit the banks and not the consumers.

Where do Consumers Go from Here when Dealing with Debt?

While am glad that the election season is finally over, I am concerned that the new regime and government may fail to protect and help the very people who got them into office.  Mr. Trump’s background as a businessman seem to favor the fact that he will open up lending, have less regulations for consumers, lenders and debt collectors, while not addressing the $1.3 trillion dollar student loan crisis which will only cause more borrowing from consumers who are unable to make their monthly payments to student loan lenders and need to borrow from banks just to make ends meet.  Unfortunately I foresee that America will be once again built up on consumer borrowing that will only benefit the big banks which may lead up to another crash.

While I hope I am wrong and that the new policies will benefit Americans in the long term and not just the short term, I am skeptical.  Only time will tell and anything written in this article are just to be taken as my opinion and nothing more.

If you live in Washington State and are dealing with debt and have questions about it, give Symmes Law Group a call at 206-682-7975 to speak to a debt relief attorney and learn about your options.

Posted in Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Foreclosure Defense, Media & Press, Seattle Debt Settlement Tagged with:

Who is West Asset Management?

Who is West Asset Management and why are they suing me? 

West Asset ManagementIt’s not surprising that you have never heard of West Asset Management, in fact you are probably reading this article because you have no idea who they are or why they have filed a lawsuit against you.  West Corporation is one of the largest debt buyers in the United States.  This company buys debts for pennies on the dollar from companies across many types of businesses including healthcare, financial, and utilities to name a few. The debt sellers in this case have determined that it will cost them more money to try and collect on the debt themselves rather than sell your debt to a third party debt collector such as West Asset Management.  Once West Asset Management has purchased a debt they may hire a third party debt collection company to send out collection letters or call consumers or they may hire a debt collection law firm such as Suttell Hammer & White, Nelson & Kennard, Machol & Johannes or Patenaude & Felix to file a lawsuit against you in an attempt to collect on a debt.  Unfortunately for West Asset Management and many other third party debt buyers, the information that they purchase from major banks only includes a spreadsheet of information with consumers information. It is very possible that West Asset Management cannot produce original contracts signed or any proof that you actually owe on a debt.  Further, if West Asset Management shows up on your credit report it is likely that they will not be able to validate that you owe a debt in accordance with the Fair Credit Reporting Act and therefore any negative reporting must be removed from your credit upon a request for validation. Of course any debts that are properly validated would remain on your credit.

In reality, West Asset Management, Inc. is simply a subsidiary of a large corporate called West Corp. located in Omaha Nebraska who is involved in many different industries.  West Asset Management employs 1,500 debt collectors in 13 states and one offshore location.  West Asset Management has numerous complaints floating around the internet and in 2011 West Asset Management agreed to pay consumers a record $2.8 Million for violations of the Fair Debt Collection Practices Act for actions that included telling consumers that they would be arrested if they didn’t pay on their debts. In most states debtors cannot go to jail for not paying on most types of debts.

Now that you know who West Asset Management is, the next step is to figure out  how you can deal with them.  Your first contact with this company will likely be through a letter that you receive in the mail from a third party debt collector or debt collection law firm indicating that they represent West Asset Management who has purchased your debt and that you should contact them to make a payment on a debt that they are collecting for.   If you don’t take any action then at some point it is likely you will receive or be served with a Summons and Complaint.  These are legal documents that indicate that a lawsuit has been filed against you and you will have 20 days to respond from the date of service to avoid having a default judgment being entered against you. It is likely that your case will have been filed in the county in which you live in either the superior or district court.  Also be on the look out for any case filed against you without a case number.  If your case does not have a case number, you still must respond to the complaint to avoid a default judgment being entered against you.  However if there is no case number you have a better chance of the law firm not pursuing the collection in the near future since they have to incur more fee’s in which to actually file your case at the court house.  If anything at least filing an answer will buy you some time.

If you get a default judgment entered against you, that allows West Asset Management to garnish your wages, bank accounts or place a lien on your home. You will want to avoid this from happening at all costs.  Having a judgment against you can also affect your credit scores and impact your ability to gain favorable credit in the future.

How Should I Handle Debt Being Collected On By West Asset Management?

How you decide to handle debt being collected by West Asset Management will be determined by your particular situation.  For instance if the debt in question is for a small amount and you know you are responsible for the debt you may just want to settle your account with the company attempting to collect on the debt.  Often times these debts can be settled for less than the original balance owed.  Obtaining a settlement of 50% or less of the total balance on settlements is not uncommon.  Also often times a payment plan can be obtained although the total settlement will probably be higher.  The option to pay to have a negative item deleted on your credit may also be available but always make sure you get any settlements in writing.

Next if you have other outstanding debts including the West Asset Management debt and your debt load is over $10K then you may want to speak to an attorney regarding filing for bankruptcy.  Filing for bankruptcy will stop a debt collector from collecting on a debt immediately.  A Chapter 7 bankruptcy will eliminate all of your unsecured debt in most cases, while a Chapter 13 bankruptcy will give you a payment plan over 36-60 months to pay on your debts in which you may or may not have to pay the full amount back depending on your income and family size.

If your goal is simply to buy some time in which to obtain funds to settle or file bankruptcy and you have already been served with a summons and complaint then it is advisable to file an answer to the summons and complaint.  The answer must be filed in the court where your law suit is and a copy sent to the law firm as well.  The answer outlines all of your defenses and responses to the allegations in the complaint.  Filing an answer will help you avoid a default judgment and allow for you to buy time and force the law firm to produce paperwork from the original creditor showing you owe the debt.  If you do file an answer, it is likely that West Asset Management at some point in the next couple of months will file a motion for summary judgment stating that they have evidence that you owe the debt and that they should win their case.  At this point the law firm would be required to actually produce such evidence.  If you don’t have a valid defense to these allegations you will want to settle your case or file bankruptcy to avoid further attorney fee’s and interest being entered against you.  Otherwise you have the option to continue in litigation and see if the company will produce evidence that you owe on a debt and a court will determine whether West Asset Management has  standing to collect on the debt.  Often times third party debt collectors cannot produce such documentation but the only way to find out for sure is to see your case to the end, often ending with a trial.  If for some reason you have let a default judgment get entered against you and you need to stop a wage garnishment a bankruptcy can always be filed after the fact and any wages taken within 90 days of the bankruptcy filing may be returned to you.

If you live in Washington State and have received a letter or a legal summons and complaint from West Asset Management and have questions about it, give Symmes Law Group a call at 206-682-7975 to learn about your options.  If you would like to learn how to deal with West Asset Management on your own check out my online debt collection response course complete with sample materials and forms that you can use to negotiate a settlement or dispute items on your credit report.

Posted in Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Credit Repair, Seattle Debt Settlement Tagged with:

Who is Portfolio Recovery Associates?

Who is Portfolio Recovery Associates and why are they suing me? 

Portfolio Recovery AssociatesIt’s not surprising that you have never heard of Portfolio Recovery Associates, LLC in fact you are probably reading this article because you have no idea who they are or why they have filed a lawsuit against you.  Portfolio Recovery Associates, aka PRA Group, Inc. is one of the largest debt buyers in the United States.  This company buys debts for pennies on the dollar from legitimate banks such as Wells Fargo, Citi Bank or Chase who have determined that it will cost them more money to try and collect on the debt themselves rather than sell your debt to a third party debt collector such as Portfolio Recovery Associates.  Once Portfolio Recovery Associates has purchased a debt they may hire a third party debt collection company to send out collection letters or call consumers or they may hire a debt collection law firm such as Suttell Hammer & White, Gordon Aylworth and Tami P.C. or Mandarich Law Group to file a lawsuit against you in an attempt to collect on a debt.  Unfortunately for Portfolio Recovery Associates and many other third party debt buyers, the information that they purchase from major banks only includes a spreadsheet of information with consumers information. It is very possible that Portfolio Recovery Associates cannot produce original contracts signed or any proof that you actually owe on a debt.  Further, if Portfolio Recovery Associates shows up on your credit report it is likely that they will not be able to validate that you owe a debt in accordance with the Fair Credit Reporting Act and therefore any negative reporting must be removed from your credit upon a request for validation.

Portfolio Recovery Associates is a company located in Norfolk, Virginia who changed their name officially to PRA Group, Inc. in 2014. PRA Group, Inc. has recently been involved in litigation which involved fines and sanctions for improper debt collection practices and the Consumer Financial Protection Bureau ordered Portfolio Recovery Associates to pay consumers $19 million in refunds and $8 million in penalties and ordered the company to stop collecting on over $3 million worth of debts.

Now that you know who Portfolio Recovery Associates is, the next step is to figure out  how you can deal with them.  Your first contact with this company will likely be through a letter that you receive in the mail from a third party debt collector or debt collection law firm indicating that they represent Portfolio Recovery Associates who has purchased your debt and that you should contact them to make a payment on a debt that they are collecting for.   If you don’t take any action then at some point it is likely you will receive or be served with a Summons and Complaint.  These are legal documents that indicate that a lawsuit has been filed against you and you will have 20 days to respond from the date of service to avoid having a default judgment being entered against you. It is likely that your case will have been filed in the county in which you live in either the superior or district court.  Also be on the look out for any case filed against you without a case number.  If your case does not have a case number, you still must respond to the complaint to avoid a default judgment being entered against you.  However if there is no case number you have a better chance of the law firm not pursuing the collection in the near future since they have to incur more fee’s in which to actually file your case at the court house.  If anything at least filing an answer will buy you some time.

If you get a default judgment entered against you, that allows Portfolio Recover Associates to garnish your wages, bank accounts or place a lien on your home. You will want to avoid this from happening at all costs.  Having a judgment against you can also affect your credit scores and impact your ability to gain favorable credit in the future.

How Should I Handle Debt Being Collected By Portfolio Recovery Associates?

How you decide to handle debt being collected by Portfolio Recovery Associates will be determined by your particular situation.  For instance if the debt in question is for a small amount and you know you are responsible for the debt you may just want to settle your account with the company attempting to collect on the debt.  Often times these debts can be settled for less than the original balance owed.  Obtaining a settlement of 50% or less of the total balance on settlements is not uncommon.  Also often times a payment plan can be obtained although the total settlement will probably be higher.  The option to pay to have a negative item deleted on your credit may also be available but always make sure you get any settlements in writing.

Next if you have other outstanding debts including the Portfolio Recovery Associates debt and your debt load is over $10K then you may want to speak to an attorney regarding filing for bankruptcy.  Filing for bankruptcy will stop a debt collector from collecting on a debt immediately.  A Chapter 7 bankruptcy will eliminate all of your unsecured debt in most cases, while a Chapter 13 bankruptcy will give you a payment plan over 36-60 months to pay on your debts in which you may or may not have to pay the full amount back depending on your income and family size.

If your goal is simply to buy some time in which to obtain funds to settle or file bankruptcy and you have already been served with a summons and complaint then it is advisable to file an answer to the summons and complaint.  The answer must be filed in the court where your law suit is and a copy sent to the law firm as well.  The answer outlines all of your defenses and responses to the allegations in the complaint.  Filing an answer will help you avoid a default judgment and allow for you to buy time and force the law firm to produce paperwork from the original creditor showing you owe the debt.  If you do file an answer, it is likely that Portfolio Recovery Associates at some point in the next couple of months will file a motion for summary judgment stating that they have evidence that you owe the debt and that they should win their case.  At this point the law firm would be required to actually produce such evidence.  If you don’t have a valid defense to these allegations you will want to settle your case or file bankruptcy to avoid further attorney fee’s and interest being entered against you.  Otherwise you have the option to continue in litigation and see if the company will produce evidence that you owe on a debt and a court will determine whether Portfolio Recovery Associates has  standing to collect on the debt.  Often times third party debt collectors cannot produce such documentation but the only way to find out for sure is to see your case to the end, often ending with a trial.  If for some reason you have let a default judgment get entered against you and you need to stop a wage garnishment a bankruptcy can always be filed after the fact and any wages taken within 90 days of the bankruptcy filing may be returned to you.

If you live in Washington State and have received a letter or a legal summons and complaint from Portfolio Recovery Associates and have questions about it, give Symmes Law Group a call at 206-682-7975 to learn about your options.  If you would like to learn how to deal with Portfolio Recovery Associates on your own check out my online course on how to negotiate and respond to a debt collection lawsuit complete with materials and forms by clicking HERE.

Posted in Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Credit Repair, Seattle Debt Settlement Tagged with: ,

Who Is Cavalry SPV I LLC?

Who is Cavalry SPV I LLC and why are they suing me? 

Cavalry SPV I LLCIt’s not surprising that you have never heard of Cavalry SPV I LLC, in fact you are probably reading this article because you have no idea who they are or why they have filed a lawsuit against you.  Cavalry SPV I LLC is one of the largest debt buyers in the United States.  This company buys debts for pennies on the dollar from legitimate banks such as Capital One, Wells Fargo, Citi Bank or Chase who have determined that it will cost them more money to try and collect on the debt themselves rather than sell your debt to a third party debt collector such as Cavalry SPV I LLC.  Once Cavalry SPV I LLC has purchased a debt they may hire a third party debt collection company to send out collection letters or call consumers or they may hire a debt collection law firm such as Suttell Hammer & White, Mandarich Law Group, Machol & Johannes or Patenaude & Felix to file a lawsuit against you in an attempt to collect on a debt.  Unfortunately for Cavalry SPV I LLC and many other third party debt buyers, the information that they purchase from major banks only includes a spreadsheet of information with consumers information. It is very possible that Cavalry SPV I LLC cannot produce original contracts signed or any proof that you actually owe on a debt.  Further, if Cavalry SPV I LLC  shows up on your credit report it is likely that they will not be able to validate that you owe a debt in accordance with the Fair Credit Reporting Act and therefore any negative reporting must be removed from your credit upon a request for validation.

In reality, Cavalry SPV I LLC is simply an affiliate of a debt collection company founded in 2002 called Cavalry Portfolio Services located in Valhalla, New York.  According to their website, Cavalry Portfolio Services “is a leader in the acquisition and management of non-performing consumer loan portfolios. Cavalry helps people create affordable solutions to resolve their debt and is committed to providing customers with a professional experience.”  While Cavalry Portfolio Services claims to create affordable solutions and provide consumers with a professional experience, business review sites such as this one beg to differ.  The review site gives the company a one star rating and there are claims of harassment, garnishments without notice, and collecting on debt that is outside of the statute of limitations (i.e. debt that cannot be collected upon in court because it is too old) just to name a few.  Therefore if you are involved in a lawsuit with this company I would advise you to try to resolve this account immediately before further damage can be done to your credit or financial accounts.

Now that you know who Cavalry SPV I LLC is, the next step is to figure out  how you can deal with them.  Your first contact with this company will likely be through a letter that you receive in the mail from a third party debt collector or debt collection law firm indicating that they represent Cavalry SPV I LLC who has purchased your debt and that you should contact them to make a payment on a debt that they are collecting for.   If you don’t take any action then at some point it is likely you will receive or be served with a Summons and Complaint.  These are legal documents that indicate that a lawsuit has been filed against you and you will have 20 days to respond from the date of service to avoid having a default judgment being entered against you. It is likely that your case will have been filed in the county in which you live in either the superior or district court.  Also be on the look out for any case filed against you without a case number.  If your case does not have a case number, you still must respond to the complaint to avoid a default judgment being entered against you.  However if there is no case number you have a better chance of the law firm not pursuing the collection in the near future since they have to incur more fee’s in which to actually file your case at the court house.  If anything at least filing an answer will buy you some time.

If you get a default judgment entered against you, that allows Cavalry SPV I LLC to garnish your wages, bank accounts or place a lien on your home. You will want to avoid this from happening at all costs.  Having a judgment against you can also affect your credit scores and impact your ability to gain favorable credit in the future.

How Should I Handle Debt Being Collected By Cavalry SPV I LLC?

How you decide to handle debt being collected by Cavalry SPV I LLC will be determined by your particular situation.  For instance if the debt in question is for a small amount and you know you are responsible for the debt you may just want to settle your account with the company attempting to collect on the debt.  Often times these debts can be settled for less than the original balance owed.  Obtaining a settlement of 50% or less of the total balance on settlements is not uncommon.  Also often times a payment plan can be obtained although the total settlement will probably be higher.  The option to pay to have a negative item deleted on your credit may also be available but always make sure you get any settlements in writing.

Next if you have other outstanding debts including the Cavalry SPV I LLC debt and your debt load is over $10K then you may want to speak to an attorney regarding filing for bankruptcy.  Filing for bankruptcy will stop a debt collector from collecting on a debt immediately.  A Chapter 7 bankruptcy will eliminate all of your unsecured debt in most cases, while a Chapter 13 bankruptcy will give you a payment plan over 36-60 months to pay on your debts in which you may or may not have to pay the full amount back depending on your income and family size.

If your goal is simply to buy some time in which to obtain funds to settle or file bankruptcy and you have already been served with a summons and complaint then it is advisable to file an answer to the summons and complaint.  The answer must be filed in the court where your law suit is and a copy sent to the law firm as well.  The answer outlines all of your defenses and responses to the allegations in the complaint.  Filing an answer will help you avoid a default judgment and allow for you to buy time and force the law firm to produce paperwork from the original creditor showing you owe the debt.  If you do file an answer, it is likely that Cavalry SPV I LLC at some point in the next couple of months will file a motion for summary judgment stating that they have evidence that you owe the debt and that they should win their case.  At this point the law firm would be required to actually produce such evidence.  If you don’t have a valid defense to these allegations you will want to settle your case or file bankruptcy to avoid further attorney fee’s and interest being entered against you.  Otherwise you have the option to continue in litigation and see if the company will produce evidence that you owe on a debt and a court will determine whether Cavalry SPV I LLC has  standing to collect on the debt.  Often times third party debt collectors cannot produce such documentation but the only way to find out for sure is to see your case to the end, often ending with a trial.  If for some reason you have let a default judgment get entered against you and you need to stop a wage garnishment a bankruptcy can always be filed after the fact and any wages taken within 90 days of the bankruptcy filing may be returned to you.

If you live in Washington State and have received a letter or a legal summons and complaint from Cavalry SPV I LLC and have questions about it, give Symmes Law Group a call at 206-682-7975 to learn about your options.  If you would like to learn how to deal with Cavalry SPV I LLC on your own check out my online debt collection response course complete with sample materials and forms.

Posted in Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Seattle Debt Settlement Tagged with:
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