Providian Charge-off/Judgment/Sale - Third Chance?

[LuuCkyJaa]

In the late 80's, I had a good job, an excellent credit rating, a stack of credit and charge cards and an ego to match. I left the job, had no insurance and proceeded to have a child. The medical bills wiped me out and everything fell apart.

Jump ahead to 1999. By that point, everything must have disappeared from my credit reports and Providian gave me a $5k Visa out of the blue. That same month, I quit my job over a (silly) dispute with management. I was in the middle of a nasty divorce and everything soon fell apart (again).

Providian charged-off the account in December 2000 and was awarded a default judgment against me in 2001 for $5,641. You will see a picture of me if you look-up "idiot" in the dictionary.

Jump to today. At the age of 41, I am trying to take responsibilty for my idiocy and clean-up my credit/debt history. I started by pulling a 3-in-1 credit report. Of course, the biggest problems on it are the Providian charge-off and judgment entries, which now appear as transferred/sold/purchased.

I have learned a lot from this website. I want to start the CA debt validation/CRA dispute process, but I wanted to first know who owns what debt. I called Providian today and found out that they sold the debt to Sherman Acquisitions in January of this year.

Here's the thing I don't understand or know how to deal with. I've read horror stories about Sherman Acquisitions on this forum, but they have not started collection activity against me. There have been no phone calls or letters, and they don't appear on my credit reports. Today was the first time I heard of them.

I want to do what I can to make this judgment go away and stay away. I will soon be in a position to negotiate with them for the removal of the judgment from my credit report. Should I attempt to contact them during the DV/dispute process, or wait for them to contact me?

I don't want to blow my third chance. Thanks for reading.

James from Brooklyn

[ggluvbug]

have you found out what the statute of limitations is in your state? in my state, it is 3 years. if the debt is within the sol, you have to be very careful.

[c m chase]

That SOL doesn't apply here - Luucky already has a judgment against her for the debt.

I think it goes by state on judgment SOL....in Oklahoma it's 5 years. They have that long to collect or they can renew. Then it starts all over.

I'm pretty sure you can deal with Sherman as a CA just like you would any other collection agency. Send them a DV letter (tons of samples on the board here). Watch them for violations. They may tell the judgment holder 'nevermind' because you're making them work.

Maybe an expert on judgments will chime in here with more info.

[ggluvbug]

oops, i missed that!

when i had a judgement made against me, they garnished my wages. i was served the papers, but at the time, i was under alot of stress and didn't show up. then they took 25% of my check for 2 months. are garnishments not always the case in a judgement?

[c m chase]

Not necessarily, no. Depending on what the state rules are they can garnish wages, bank accounts, etc. It also depends on if you're head of household or whatever. Luucky needs to check her state rules to see if she might even be exempt from that kind of thing.

[LuuCkyJaa]

I'm in New York. The SOL for judgments is 10 years, at which point it can be renewed. I have to deal with this.

After being awarded the default judgment against me in 2001, Providian took no further action against me. They did not garnish my wages, bank accounts or anything else. Then they sold the debt to Sherman Acquisitions earlier this year.

My biggest question now is what happens to the judgment when a company sells the debt after the judgement has been entered. Do the judgment creditor's rights go along? I went to the "Is there a lawyer in the house" forum to ask this question, and was greeted by a thread about Sherman Acquisitions' predatory practices. They are (apparently) now sending out some sort of affidavit in response to DV requests.

Which brings me back to my original question: Should I start the DV process against them now (even though it is not yet appearing on my CR), or wait until either they contact me or it appears on my CR?

Warmest holiday regards,

James from Brooklyn

[LuuCkyJaa]

I've learned from this website that a satisfied judgment is not much better than an unpaid one. But I just learned this evening (on the "Facts You Should Know" section of my EQ report, of all places), that satisified judgments can only remain on your CR for five years here in NY.

On my timeline, I want to be able to buy a house/apartment two years from now. This is major. Even if I can't get them to remove the judgment, it will fall off 15 months from now (once satisfied).

Cool.

James from Brooklyn

[DocDon]

That's the difference James. Most home lenders want to see those unpaid items taken care of before they process a loan.

[flacorps]

In New York you tend to hear more stories of bank accounts being frozen than wages being garnished. If Sherman can find out where you bank, they'll grab what's in your account. Be extremely suspicious of any small checks ($5-$10) you get out of the blue ... they're trolling for your banking info.

Meanwhile, accumulate the funds you'll need to settle this (the underlying judgment amount, plus statutory interest from the time it was rendered) in an out-of-state internet bank.

At that point, you can either wait for Sherman to call you, or you can call them, or possibly you can obviate dealing with them entirely by paying the whole sum into the registry of the court and obtain the court's satisfaction. The fun part is that if you do that, Sherman may never see the money if they don't respond to the court's notices that it's being held there for them. You might even get it back one day.

[LuuCkyJaa]

@flacorps: I've really been worrying about being introduced to them by way of a freeze on my bank account, particularly since I recently deposited the proceeds of a 401(k) loan in preparation for a move. It is an out-of-state Internet bank, but I still worry.

Come to think of it, I did get one of those small out-of-the blue checks earlier this year. The judgment wasn 't on my mind at the time, but I still thought it was fishy and did not cash it.

(OFF TOPIC - My boss said he would have deposited it. But then again, he was fired at the end of July for trying to steal a $10,500 check that had been sent to the company by one of our clients in order to help get out of his credit hell. We still regularly get calls from collection agencies on his old line.)

One of the questions I posted earlier in this thread and elsewhere asked what happens to the judgment when a company sells the debt after the judgment has been entered. It seemed pretty straight forward, but it took me until today to get my answer.

I pulled the text of the law governing judgments from the New York State Assembly website. When there is a "Change in judgment creditor... the person other than the party recovering a judgment... shall file in the office of the clerk of the court in which the judgment was entered... a copy of the instrument on which his authority is based."

When I went to get a copy of the judgment at the county clerk's office, they found it in their system, but didn't mention anything about changes to it. I have to go back on my lunch break tomorrow to get an actual copy of the judgment as I did not have time for them to retrieve it from the record room on my last visit. I will definitely see if Sherman has filed the required paperwork.

If not, I think I will file a motion to vacate the judgment in the hope that there is enough confusion between Providian and Sherman that the response falls through the cracks. After all, if the judgment is still in Providian's name, I would be filing the motion to vacate against them. But since they don't actually own the debt, I assume they would have little reason to respond. I am sure that Sherman would get wind of this one way or the other. The biggest problem with this idea is that I do not have legitmate grounds for the motion.

I really like your idea of paying the money into the registry of the court and obtaining the court's satisfaction. I believe the interest here in New York to be 8%, but do not know how it is computed. Does anyone?

Thanks,

James from Brooklyn

[flacorps]

It should be simple interest on the principal amount of the judgment only, or on the principal amount and the court costs. There may or may not be prejudgment interest as well. The court clerk can tell you what the payoff would be. In Florida, the interest rate changes annually now, indexed to the prime rate. In other states, it may be fixed until changed by the legislature periodically.

[LuuCkyJaa]

@flacorps: Thanks! I will check with the court clerk about the accumulated interest as well as paying the money into the registry of the court when I go tomorrow.

I'm in the middle of reading the NYS law regarding "Enforcement of Money Judgments." It's 33 pages long, written in a language that no one speaks, and about as interesting as the last J.Lo movie.

Did you know that your family bible is "exempt from application from application to the satisfaction of money judgments" in New York? I didn't