Summons by AMEX responding to Debt Validation Letter

[Halelani]

I sent two other agencies and AMEX via certified mail a letter for Debt Validation as I was confused as to why 3 different agencies would be sending me collection letters for one account.

In response I received a summons from an attorney which was one of the parties to whom I sent these debt validation letters to.

Question: What do I do now? Answer the complaint? If so, how do I do this?

It shows it was filed on 3/24/2009; and I was served on 4/7. I have been madly searching the internet with no luck other than all responses say get an attorney...if I could afford one I'm sure I would not be here.

Thanking you in advance for any responses...Halelani

[centex]

AXP likes their money. When people play games, it becomes very easy to up the ante and move to litigation. And since it will be the OC that is suing (AXP rarely sells off their paper), you may rest assured that they will have the necessary documentation.

As to what to do...you can either retain an attorney or learn procedure so that you can attempt to proffer a defense or you can try to settle the matter. It will NOT be a pennies on the dollar settlement but it should eliminate the legal fees that will be tacked on to the judgment amount.

As you were served on the 7th, you have already burned a good chunk of your clock. The Defendant's Original Answer is usually due within 20 days of the date of service, but there are also some courts with shorter timelines.

You are no longer in the DV sandbox...and attempting to DV an original creditor (someone not covered by the very proesses by which the DV is intended to address) demonstrated to AXP that you probably don't have a clue about things in the law. That made you an even easier target for litigation. NEVER do anything on a debt when you do not understand WHY you are doing something and when you do not understand the law applicable to whatever it is that you are doing.

[Qtip]

Quote:

Originally Posted by centex AXP likes their money. When people play games, it becomes very easy to up the ante and move to litigation. And since it will be the OC that is suing (AXP rarely sells off their paper), you may rest assured that they will have the necessary documentation. As to what to do...you can either retain an attorney or learn procedure so that you can attempt to proffer a defense or you can try to settle the matter. It will NOT be a pennies on the dollar settlement but it should eliminate the legal fees that will be tacked on to the judgment amount. As you were served on the 7th, you have already burned a good chunk of your clock. The Defendant's Original Answer is usually due within 20 days of the date of service, but there are also some courts with shorter timelines. You are no longer in the DV sandbox...and attempting to DV an original creditor (someone not covered by the very proesses by which the DV is intended to address) demonstrated to AXP that you probably don't have a clue about things in the law. That made you an even easier target for litigation. NEVER do anything on a debt when you do not understand WHY you are doing something and when you do not understand the law applicable to whatever it is that you are doing.

Good sound advice, but a little harsh in my opinion. I think often times people find themselves in situations due to no fault of their own, this is not a game and I think everyone that comes here knows that. Banks and collection agencies are very aggressive and as soon as they start adding their exaggerated fees on to debt, people are left with no choice but to default...

If I understand the original poster correctly, they requested validation from a collection agency and the collection agency sued them.

Quote:

Originally Posted by Halelani I sent two other agencies and AMEX via certified mail a letter for Debt Validation as I was confused as to why 3 different agencies would be sending me collection letters for one account. In response I received a summons from an attorney which was one of the parties to whom I sent these debt validation letters to. Question: What do I do now? Answer the complaint? If so, how do I do this? It shows it was filed on 3/24/2009; and I was served on 4/7. I have been madly searching the internet with no luck other than all responses say get an attorney...if I could afford one I'm sure I would not be here. Thanking you in advance for any responses...Halelani

Hi,

Your situation is unfortunately far too common, amex tends to pass the accounts around for a small period of time. First, how much is your debt? Do not put the exact amount here, just a ball park number. What state are you in?

As Centex stated, amex is not shy about suing consumers. At this juncture if you are unable to retain an attorney then the only option is to answer the complaint. Can you post the complaint here, minus personal information. Maybe some members can help you draft an answer to the complaint. I think at the end of the day, you will want to contact them and reach some kind of settlement that you can live with.

[centex]

OP clearly indicated that they sent the DV to two entities in addition to AXP. American Express places their paper. They rarely sell it. It is also a staple on most of the boards that you DON'T send a DV to an original creditor...

The reality is that there are too many people that believe everything they read on other sites about how a DV is going to leave other parties quivering in their boots and that ITS letters for ticky-tac violations will bring the rainshower of checks to avoid litigation. While the OP being sued is an unfortunate event, it should serve as a reminder that one absolutely needs to know the law and its intent before they send a SINGLE letter to ANYONE in a debt-related matter. And if a letter is sent out, the consumer NEEDS to realize that there is a very real possibility that they will be in the courtroom...which means you need to be thinking ahead before the first letter is mailed out.

I will once again urge that people take the time to read some of the various translations of The Art of War by Sun Tzu. Considering the age in which it was written, there is much to be learned that is equally applicable to the litigation realm...

[Halelani]

Gee, I feel so violated and from both directions...I came here with hopes of getting help, but I must say I am disappointed. I really was looking for help and not a bashing...(we all make mistakes) I've decided to default, not show up, and let them hang me, since three bad accidents (broken leg in wheel chair for year, hit head on by an attorney who died and totalled me and my car, and two weeks in a coma with pneumonia, all in a 3 yr stretch (none my fault) have created a scenario out of control...thank for letting me know that I am part of the stupid people and not in with the smart know it alls. Thanks to those of you who came to my defense. I was told this was the thing to do, now I'm told not to do, I guess we all feel we have the best answer, but I feel like I did not know where to turn...once again I made the wrong choice...stupid me.

[Qtip]

Quote:

Originally Posted by Halelani Gee, I feel so violated and from both directions...I came here with hopes of getting help, but I must say I am disappointed. I really was looking for help and not a bashing...(we all make mistakes) I've decided to default, not show up, and let them hang me, since three bad accidents (broken leg in wheel chair for year, hit head on by an attorney who died and totalled me and my car, and two weeks in a coma with pneumonia, all in a 3 yr stretch (none my fault) have created a scenario out of control...thank for letting me know that I am part of the stupid people and not in with the smart know it alls. Thanks to those of you who came to my defense. I was told this was the thing to do, now I'm told not to do, I guess we all feel we have the best answer, but I feel like I did not know where to turn...once again I made the wrong choice...stupid me.

Please do not feel bad and do not give up on the forum, while I agree with the advice Centex provided, I totally disagree with the way it was provided. I think that there are others that are more than willing to help, if you provide some of the information I requested. Defaulting on the debt will only give the CA and Amex the upper hand. You still have time to answer your summons.


Thanks

[jlynn]

Qtip asked earlier, what state are you in? Rules of court vary from state to state, so no one can help you until we know where you are.

How much are they suing you for, and overall how much debt do you have? You mention a bad wreck, was it recently settled wherein you came into a lot of money? Or have you filed suit to collect money for those accidents? Its public record and Amex may be trying to get their finger in the pie.

[Halelani]

HI and thank you for responding. The accident settlement covered my car (used) but not completely, and part of my medical expenses. My attorney left his practice before settlement was complete. I'm not sure why he did this, the driver that hit me was an attorney so he was pretty well protected I guess. It was just an unfortunate event that happened four years ago. I doubt I will recover from all of this and at some point will be forced into foreclosure and bankruptcy. I have around 400K in equity in my home and have approximately $70K in unsecured debt. It's all unfortunate and I would like to repay my debtors but I am in no position to do so now. I am in the state of Oregon and understand that very little will be left for me once I declare bankruptcy. I'm sure someone will benefit from it as I have in the past. Sincerely, Halelani

[Enigma]

With $400K equity in your home and $70k in unsecured debt you are in a very bad position. I STRONGLY urge you to seek bankruptcy counsel. You cannot file Chapter 7, but will need to file Chapter 13 to protect your home.

DO NOT waste any time in doing so.

[Halelani]

Thank you for your recommendation. I needed to know those specifics. I will go see one I know on Monday after work.

[Enigma]

Is this a business card, if so, did you personally guarantee it?

[Halelani]

Yes it was a business card and I am assuming I personally guarranteed it since the business was soley in my name and I personally was not protected under Corp or LLC or any other safety measure.

[airav]

Quote:

Originally Posted by Halelani I sent two other agencies and AMEX via certified mail a letter for Debt Validation as I was confused as to why 3 different agencies would be sending me collection letters for one account. In response I received a summons from an attorney which was one of the parties to whom I sent these debt validation letters to. Question: What do I do now? Answer the complaint? If so, how do I do this? It shows it was filed on 3/24/2009; and I was served on 4/7. I have been madly searching the internet with no luck other than all responses say get an attorney...if I could afford one I'm sure I would not be here. Thanking you in advance for any responses...Halelani

Lawyer-up!

[Halelani]

Finally getting back to you all--I filed BK this Tuesday as I my mental health isn't fairing well.

[Enigma]

Quote:

Originally Posted by Halelani Finally getting back to you all--I filed BK this Tuesday as I my mental health isn't fairing well.

That was quick... Now you can breathe easier......

[Pokey]

Quote:

Originally Posted by Enigma With $400K equity in your home and $70k in unsecured debt you are in a very bad position. I STRONGLY urge you to seek bankruptcy counsel. You cannot file Chapter 7, but will need to file Chapter 13 to protect your home. DO NOT waste any time in doing so.

I have to ask why they were in a bad position?

$400,000 - $70,000 = $330,000 and no bankruptcy attached to name.

[Enigma]

Quote:

Originally Posted by Pokey I have to ask why they were in a bad position? $400,000 - $70,000 = $330,000 and no bankruptcy attached to name.

There is more equity in the house than there is bad debt. If they obtain a judgment then they could force a foreclosure. By filing Chapter 13 lawsuits stop and the debt is repaid over 5-7 years.

[Pokey]

Quote:

Originally Posted by Enigma There is more equity in the house than there is bad debt. If they obtain a judgment then they could force a foreclosure. By filing Chapter 13 lawsuits stop and the debt is repaid over 5-7 years.

Why not just go to the bank and use the house as collateral and take out a personal loan or sell the house and pay off the debt? The money is there and unless they are disabled there is really no need to go through a bankruptcy not to mention they could probably settle right now for maybe 30 to 50 cents on the dollar.

[jlynn]

Quote:

Originally Posted by Pokey Why not just go to the bank and use the house as collateral and take out a personal loan or sell the house and pay off the debt?

Have you been watching the news over the last few months?

[Enigma]

Quote:

Originally Posted by Pokey Why not just go to the bank and use the house as collateral and take out a personal loan or sell the house and pay off the debt? The money is there and unless they are disabled there is really no need to go through a bankruptcy not to mention they could probably settle right now for maybe 30 to 50 cents on the dollar.

In general American Express does not settle. With other bad debt out there its best to let BK deal with it.

Why would you suggest going into debt to pay off bad debt? By filing BK you take care of the mess at once, and the creditors are paid, albeit at less than 100 cents on the dollar. The BK tells the creditors what they will get and the OP does not have to negotiate. By not filing BK the OP's credit score will suffer needlessly. By filing BK the OP's credit score will show a reasonable improvement within two years. by filing BK the OP can preserve other assets if there is any.

BK makes sense, while going further into debt to pay off bad debt is akin to digging your own grave. Not a fiscally sound idea in my opinion.

[Enigma]

Quote:

Originally Posted by Pokey Why not just go to the bank and use the house as collateral and take out a personal loan or sell the house and pay off the debt? The money is there and unless they are disabled there is really no need to go through a bankruptcy not to mention they could probably settle right now for maybe 30 to 50 cents on the dollar.

There is too much equity in the house. Why would you suggest selling, even if the OP could make a profit.

[Pokey]

Quote:

Originally Posted by jlynn Have you been watching the news over the last few months?

They say their house is worth $400,000 and debts(IS THIS TOTAL) $70,000.

$400,000 - $70,000 = $330,000 What am I missing? I would love to have this problem. Now if they are disabled because of the wreck that is another ball game.

[Pokey]

Quote:

Originally Posted by Enigma In general American Express does not settle. With other bad debt out there its best to let BK deal with it. Why would you suggest going into debt to pay off bad debt? By filing BK you take care of the mess at once, and the creditors are paid, albeit at less than 100 cents on the dollar. The BK tells the creditors what they will get and the OP does not have to negotiate. By not filing BK the OP's credit score will suffer needlessly. By filing BK the OP's credit score will show a reasonable improvement within two years. by filing BK the OP can preserve other assets if there is any. BK makes sense, while going further into debt to pay off bad debt is akin to digging your own grave. Not a fiscally sound idea in my opinion.

I see $400,000 assets - $70,000 debts which = $330,000 in assets. What am I missing?

[Pokey]

Quote:

Originally Posted by Enigma In general American Express does not settle. With other bad debt out there its best to let BK deal with it. Why would you suggest going into debt to pay off bad debt? By filing BK you take care of the mess at once, and the creditors are paid, albeit at less than 100 cents on the dollar. The BK tells the creditors what they will get and the OP does not have to negotiate. By not filing BK the OP's credit score will suffer needlessly. By filing BK the OP's credit score will show a reasonable improvement within two years. by filing BK the OP can preserve other assets if there is any. BK makes sense, while going further into debt to pay off bad debt is akin to digging your own grave. Not a fiscally sound idea in my opinion.

What will their credit score look like if they sell the $400,000 house and pay off the $70,000 debt? They would still have $330,000 CASH $$$. Now if they were disabled in the wreck or there is more debt than the $70,000 then things might look different but right now it appears like this. 400K-70K=330K

[Enigma]

Quote:

Originally Posted by Pokey I see $400,000 assets - $70,000 debts which = $330,000 in assets. What am I missing?

You are assuming the OP can qualify for a loan.

Current debt is unsecured, If OP can obtain loan to cover outstanding bad debt, OP will most likely have to use residence as collateral. That is secured debt. If OP defaults on the secured debt, OP loses residence. By filing BK, OP loses the stress of the outstanding debt, does not need to encumber residence with secured debt to pay off unsecured bad debt.