Tag Archives: sued

Being Garnished on a 20-year-old Debt?

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I’ve been getting a lot of calls from people who have just gotten a wage garnishment on a repo’d car that they had completely forgotten about. In most cases, these repos were 20 years ago or MORE! Excuse Me!?! How Does that happen?

The first time I got the call, I was as shocked as the person calling me. Twenty years is a seriously long time, and the worst part of it is that interest (at the contract rate and these don’t tend to be low interest loans) continued to accrue for that entire time.

So, how does that happen? Well, a judgment can be kept alive indefinitely if the creditor is willing to spend the time and money to do it. They have to either have a garnishment issue to a bank or an employer even if they don’t find anything, just issuing it is enough, at least every five years. So, it doesn’t have to go to your bank or your employer. It just has to go to some bank or some employer. The other alternative is to file a Notice of continuation, basically a statement that the creditor still intends to try to collect this judgment, and it needs to remain viable. That is pretty much it. Do that at least every five years for twenty years and then get lucky when you issue that renewing garnishment and it lands at the right bank or the right employer, and all of a sudden my phone is ringing.

Yep, it really does work that way. It used to be that it was rare to see someone trying to collect a judgment for much more than five years. That is changing, and I think it is something our Legislature needs to be looking into changing. Sorry, but a repo or an unpaid credit card in your twenties shouldn’t be able to jump out of nowhere and bite you in your forties.

Elaine

How to Tell if You’ve Been Sued

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How to Tell if You’ve Been Sued

In Oklahoma it is pretty easy to tell if you’ve been sued. Most Court dockets can be viewed online. What that means is that you can do a quick search and find all cases (for at least most Counties) in which you have been named as a party. Now, I will caution you, nothing is perfect; but OSCN is pretty close. Yes, occasionally a name gets misspelled and doesn’t turn up in a search, yes, in cases with a huge number of parties, not all of them get indexed correctly, but for the most party, you can tell in just a few clicks whether or not you have been sued by just about anybody.

The website is http://www.oscn.net which stands for the Oklahoma Supreme Court Network; and this is what it looks like.

Oklahoma Supreme Court Network Main Page

In the right hand column, about half way down, you will see “Case Search”. Click it and go to the main search page.

Then, you just fill in the blanks. The top box is COURT SELECTION with a drop down menu that lets you pick the County you are interested in searching. If you leave this blank, it will search all Counties – which can be a bit time consuming if your name is John Smith.

The next option is SEARCH BY PARTY. You need to enter your name as you think it would be listed on a lawsuit. So, if your name is Timothy Scott Brown, and you go by Scott, you might want to search for (Last Name) Brown (First Name) Timothy and then do a second search using Scott as your first name.

A simple mistake with this website is assuming that the wildcard symbol is *. It isn’t. The wildcard is %. So, if you want to search for Timothy and for Tim, enter Tim% in the First Name box and it will search for all first names starting with the letters Tim – so you will get Tim, Timothy, Timmy, Timila, etc.

You can also scroll down to the bottom of the page and limit your search by date range. This is helpful if you want to just see if someone has sued you since the first of the year, for instance. So, if you are concerned about a collection suit, or that your Spouse might have filed for Divorce; and you don’t want to sort through the traffic tickets in your younger days, the personal injury case when some idiot ran a red light and hit you a few years ago or that foreclosure case from the 2010 housing crash.

Remember, this isn’t perfect. Also, remember that like all web search engines, it takes some getting used to, so do run some trial and error searches to make sure you are getting things right. In other words, if you do a search on your name and don’t see your divorce from 2007, you are probably doing something wrong.

This is, however, a great tool for calming those nagging worries.

Elaine

What If I Didn’t List Something. . . .

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First of all, there is a huge difference between failing to list an asset, like that mineral interest you inherited from your Grandparents, and failing to list a debt, like a car loan. Either one is perjury, if the omission was intentional; and either one can be grounds for a finding of bankruptcy fraud or even a denial of discharge if the facts are right. So, you really do need to put some time and effort into making sure that your Schedules include all of your assets and all of your debts.

So, what happens if you missed something? Assets are a whole different issue, I will touch on another time. Let’s talk about not listing a debt. It can be easy to forget an old medical bill or there can be debts you don’t even know about. Let’s say you had a car repossessed a few months before the bankruptcy filing. You scheduled the repossession on your Statement of Financial Affairs, but you didn’t list the Creditor; because you didn’t realize that you were still going to owe them money.

The creditor doesn’t get notice of the bankruptcy, and a year or two later the creditor sues you for the difference between what you owed at the time the car was repossessed and the amount they got for the car (after subtracting repo fees, sale fees, reconditioning fees, etc, etc., etc.). So, a year or two after your bankruptcy you are being sued for thousands of dollars. Now what?

That depends. The first issue is which chapter you filed under. This assumes that you filed a Chapter 7 bankruptcy. The analysis for a Chapter 13 is quite different. The second issue is whether or not your Bankruptcy was an asset case or a no-asset case. In other words, whether or not your Trustee managed to distribute any money out to your creditors. Most Chapter 7 Bankruptcies are no-asset cases. The biggest variable, believe it or not, is where you filed your Bankruptcy.

If you filed your Chapter 7 Bankruptcy in Oklahoma (and this blog is always restricted to Oklahoma issues, since that is the only State in which I am licensed to practice), and it was a no-asset case; you’re almost home free. As long as the failure to list the debt was truly unintentional and in good faith, your liability for that debt was included in your discharge. That does not mean, however, that you can sit back and do nothing. The creditor has incurred collection costs as the result of your failure to give them notice. So, you need to take action ASAP to let them know about the Bankruptcy. The best way to do this is to contact your Bankruptcy attorney and have them send a letter to the creditor’s collection attorney explaining the facts, providing information about the bankruptcy filing and providing information on the law in Oklahoma as to the inclusion of omitted debts in a no-asset discharge. You can expect to pay for that service, but in my opinion it is money well spent. The last thing that you want to do is wind up facing a wage garnishment that could have been avoided or find that you may have waived some rights by allowing the creditor to continue acting out of ignorance of your bankruptcy filing. Remember, you have a duty to give notice of the bankruptcy filing to everyone you owe money to. Failing to do so does not necessarily leave you at the creditor’s mercy; but that does not mean it is completely without ramifications.

Elaine

What do You Do When You Can’t Pay Your Bills

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Most of the people who call me have always paid their bills. They have never been in the kind of position that leads them to call a Bankruptcy lawyer before, and they are scared and don’t know what to do.

The first thing that I tell them is to just breathe. Calm down. Stop the racing mind. Just breathe.
Now, prioritize. Pay the utilities, the car payments, the house or rent, the groceries first. Second, if at all possible keep a small cash reserve. Did you hear me say pay the credit cards? Sure, if you can, you should always pay your bills; but if you can do that, you aren’t reading this. If you are reading this you have lost a job or your income has dropped dramatically, you’ve had major health problems, or even worse, your child has had major health problems. Even good insurance won’t necessarily insulate you from major financial ramifications.

Seriously, I have had people on the phone hyper-ventilating at the thought of not paying their credit cards. I ask them what they think will happen, and they can’t tell me; but it is clearly TERRIFYING. We’re talking asteroid slamming into the Earth, wiping out all life kind of terrifying – which may explain what happened to the dinosaurs. They missed a payment on their Master Card. Ok, so, I’m teasing a bit.

Here is what is likely to happen if you stop paying your credit cards. First of all, they are going to start calling – a lot. This is why God invented caller ID. Then, they are going to shut down your charging privileges – probably not a bad thing. About the same time, they will start reporting you delinquent to the credit reporting agencies. Sometime thereafter, you will get a letter that they are referring your file to a LAWYER for further action. The word lawyer is in all caps, because the only reason for this letter is to be scary. They can send your file to anyone they want to for “further action” or whatever other scary (and generally vague) terms they want to use, and they don’t have to send you a letter telling you they are doing it. When that file lands in the lawyer’s office, his office will also send you a letter telling you that they have it. Notice, that no lawsuit has been filed yet? It is easier and cheaper to try and scare you with letters than it is to sue you. That doesn’t mean you won’t be sued, you probably will be – eventually; but in the meantime you still have a bit more time to try to find your feet.

You will know you have been sued when you are served. The actual rules for service of process are complicated, but if you wind up with a copy of something called a Summons and a Petition or Complaint – odds are pretty good that you have been sued. How do you know that is what these things are? Well, they have the name of the court at the top, then the names of the parties beneath that on the left, with a case number on the right, then a bunch of paragraphs explaining who you are, who is suing you, and why you are supposed to owe them money. Letters start, “Dear so and so”. Court pleadings don’t.

Once you have been sued, you will be given a certain amount of time in which to file an Answer or otherwise appear and dispute the case. If you don’t do that, then a default judgment can be taken against you. Once a judgment has been taken against you, then (at least in Oklahoma) the creditor can attempt to garnish your wages, levy on bank accounts or otherwise force you to pay them money – and it will hurt. A wage garnishment can take up to 25% of your gross wages – not take home – gross. Of course, you will still pay taxes on the pre-garnishment amount,, so your net will be substantially reduced. Most people can’t afford that.

Everyone in financial trouble is different. Some people will decide to contact a lawyer earlier in this process than others. One thing that is almost universally common is that most people who have accounts in collection want to pay them. They frequently put off calling a lawyer hoping that they will be able to pay them. Where this becomes tragic is when they wait too long hoping against hope that something will save them from drowning. Then, their employer is served with a wage garnishment; and they have no money to pay attorneys fees or filing fees. They don’t have the paperwork started to get a bankruptcy filed; and they can’t afford to pay really basic living expenses if they are having their wages garnished. At that point these people are starting to be out of options. So, once you are sued, it is probably time to call a lawyer if you haven’t already and get things started. The collection process takes long enough and filing a lawsuit increases the collection costs enough that if you haven’t found a way to get the account paid by then; you probably aren’t going to.

Once a lawsuit is filed, time is no longer on your side.

Elaine