What to do ?

[OnTheWarPath]

I have been reading the postings on this board for months trying to learn all I can..A little about my worries without giving too much information for "outsiders" to see and cross reference...

I defaulted on the big "D" card 2 years ago last month Sept 2008. A year ago, at my previous address (another state than where I live now), the attorneys for the OC started court proceedings but dismissed (without prejudice) prior to my even being served. I didn't know this until I had moved to another state and received the dismissal letter from the courts at my new address in Nov. 2009. I called big "D" and they transferred my called to their Attorney's office and was told, by the Attorney, that he would not talk with me because I had sent a cease and decist validation letter and that I would have to hire an Attorney and have the Attorney call him. I did that and gave the Attorney $2000.00 to negociate with the OC Attorney. At the time, the amount was just slightly over $3,000. My Attorney was not been able to negociate with them and like myself, found them to be extreamly nasty and uncooperative to deal with. This past month my Attorney told me there was not much he could do and returned my $2000.

Previously, when I sent my validation letter to the OC Attorney's a year ago August, they sent back about 2 years of copied CC statements..I wrote them back that I requested a "signed" copy of the agreement/contract with big "D" and a month later received a letter from the Big "D" (with their letterhead) that they did not have a signed agreement/contract but stated I did owe the money.

Both the state that I previous lived in and the state I now live in has a 3 year SOL..The state I live in now, if I read the statutes correctly, they don't need the contract but statements will work to prove the debt. It also states that if there is NO written/signed contract, there is NO attorney fee's awarded the Plantiff. Neither my Attorney nor I have heard anything from them since Dec 2009.. There is not a day that I don't worry about this. There's not a day that I don't sit on this darn computer trying to find a loophole or determine what I should do. I know the Big "D"'s attorney will not speak with me so trying to work out a settlement by way of phone is not in the picture. Do I sit it out to see what happens? Do I write a letter to try and settle? I often wonder if the reason they are not doing anything is because they have no signed contract/agreement and being so, not intitled to their Attorney fee's if they do take me to court..

Please, any suggestions or help would be greatly appreciated..Maybe someone can enlighten me so that I can sleep at night..

BTW..This cc was taken out in 1984 or 1985..When they upped the interest rate around 2003-4 I cut my credit card up and sent it back to the Big "D" and told them to close my accout..The balance at that time was around $1400.00..No charge's have been made since and I continued payments up till Sept of 2008..all this time, interest kept going up (29.9 when I quit paying) and the balance kept increasing up to almost $3000.00

[WhoCares1000]

You have 2 choices, pay the account in full or do nothing. I would suggest the 2nd choice. When your attorney called, they realized that you had one and would play hardball if you were sued in SC. Hence, they never tried to sue you. If they do, just take the $2000 you got back from the attorney and hire him to defend you and/or negotiate a settlement. By the time is gets to court, either the attorney handling the has a brain which means they will negotiate or has no brain and will probably lose when up against a real attorney. Either way you win.

So until the actually sue you in a SC court, I would not lose sleep over it. You attempted to settle and they obviously did not have the brains to see that. Just let it be.

[tigra]

I believe that the law about contracts/agreements states that the party is not entitled to atty fees if there is no agreement in writing. Basically, its your credit card agreement, that does not need to have your signature, which can be downloaded online.

There are other things you can do besides doing nothing and worrying sick. Do you know about binding arbitration? What is the name of the original creditor?

[Massive]

You don't Owe Discover Bank any money.

[Randall948]

Also in case you are not aware your wages cannot be garnished in S.C. (assuming you are working) so that takes away their single biggest hammer in the creditors toolbox. Logically this knowledge that getting their money from the actual judgment is going to be that much harder should make them more apt to negotiate.

However Discover is not logical. I have some relatives that had to default on them long long ago and had attempted to settle with them for a reasonable figure. Discover sued anyway. Got their judgment and never got another penny. Now its about 2 years till the Judgment expires (and Judgments can NOT be renewed after their lifetime in S.C). So they spent legal fees and never got anything when they could have gotten approx 30% 8 years ago.

[OnTheWarPath]

Massive,

I'd like to think that and have read everything I could find on your Securitization theory. I have to admit that after reading several post of yours ( yes, I am one of your followers that I was skeptical but then I came across an BK Attorney's web site talking about securitzation and how BK would be able to wipe out a creditor if the creditor had sold off the account to a trust, ect.. That had me thinking that if a BK Attorney was thinking this way that there had to be the same consideration given to a credit card account that someone defaulted on. I tried to post this web site but because I was new to this board and didn't have 10 postings I was unable to post the link..I'll try and copy and paste it and see what that does..Or, if anyone can send me their email addy, I can send the link to them. It was interesting, to say the least..

BTW Massive, I was so disheartened to read that you were going to leave the boards..I am so glad you decided to stay..Many of us need you here, even if some of your theory's are "out there", which I have found are not as "out there" as some might think.

[OnTheWarPath]

Randall,

I am over 65 and on SS so that eliminates wage garnishment..This Attorney had my Attorney get from me, in writting, my income (a big $628 a month), my monthly expenses and why I was unable to work in which I do have a medical condition that keeps me from obtaining a job. My big concern is that I do own a house and that scares me that they could execute a Judgement and take my home or my personal possessions. Having a Sheriff waltz into my home and take my things or my house is my major concern and what keeps my stomach in knots over all this..

[OnTheWarPath]

09-BK-029

February 3, 20 10

Mr. Peter G. McCabe

Secretary of the Committee on Rules of Practice and Procedures

Administrative Office of the United States Courts

Washington, D.C. 20544

RE: Comments on proposed changes to Bankruptcy Rule 3001

Dear Mr. McCabe and Members of the Committee:

I am a partner with the Law Offices of Mueller and Haller L.L.C. The firm

consists of 12 attorneys who concentrate solely on representing individual

debtors in chapter 7 and chapter 13 bankruptcies in the Southern District of

Illinois and the Eastern District of Missouri.

Please accept my comments to the proposed amendments to Bankruptcy

Rule 3001.

I believe that the proposed amendments to BR 3001 should be

strengthened to require that the entity filing the proof of claim provide proof

that it is the owner of the claim. This practice is already becoming prevalent in

claims filed concerning secured mortgage holders. However, it is not common

in other proofs of claim including other secured creditors or unsecured claims.

I am concerned that the entity filing a proof of claim is neither the actual

creditor nor its agent at the time the claim is filed. In my opinion, this is a

result of the securitization of notes and receivables.

In general, when securitizing notes and receivables, the original creditor

sells the amount owed to a securitized trust while maintaining rights to service

the debt. The original creditor (now servicer) is generally paid a small

percentage of the money received pursuant to a forward flow agreement. The

actual holder of the debt is usually an Asset Backed Securities (ABS) trust.

Debtors who file bankruptcy are not aware that the debt is really owed to an

ABS trust and think it is still owed to the original creditor because the bills

The Law Offices of Mueller and Haller, LLC 5312 West Main Street

William A. Mueller Belleville, IL 62226

James J. Hailer Phone: 618-236-7000

Shannon K. Cook Fax: 618-236-7002

David N. Gunn

Douglas L. Haile 1600 S. Brentwood Blvd. Ste 725

Rachel A. Hill St. Louis, MO 63144

Mark W. Hunt Phone: 314-961-9822

Lawrence E. Lauteriung Fax: 314-961-9825

Robert J. Lawson

Michael K. Read theb ankruptcycenter. net

Samuel E. Shepley

Thomas M. Voigt

come in the servicer's (original creditor's) name. Therefore, the debtors list the

debt in the original creditor's name. In my experience, soon after a debtor files

a petition in bankruptcy, a proof of claim is filed in the original creditor's name

either by the creditor itself or by a servicer on behalf of the original creditor.

The problem arises when the party filing the proof of claim cannot or will

not provide evidence that it is the holder of the debt (instead of the securitized

trust) at the time the claim is filed. The result is that claims may be filed

without a legal basis. Furthermore, it is extremely difficult for debtor's counsel

to determine whether a claim was securitized prior to filing an objection on the

claim. As far as I can determine, the publicly filed securitization documents at

the Securities and Exchange Commission do not individually list all the

accounts in a trust and therefore debtor's attorneys cannot search for our

client's account.

As a direct result of the opacity of this information, litigation to

determine the true holder of the debt is lengthy, complex and expensive. A

further consequence is that the issue is rarely raised. However that does not

mean that the issue should not be addressed because it significantly impacts

upon the integrity of the bankruptcy system.

The response from creditors is generally that the debtors listed the debt

as owed to the original creditor and unless the debtor has committed perjury,

then the claim can be filed in that original creditor's name. As stated above,

this is due to the complex nature of securitization and the ambiguity of

identifying whether a debt is held by the original creditor or an ABS trust. The

law already requires a creditor or services to identify the name, address and

telephone number of the current holder of the debt under the Truth in Lending

Act found at 15 U.S.C. § 164 1(q)(2). It is appropriate to make those same

requirements applicable when filing a proof of claim.

Another response from creditors (and trustees) is that if the debtor lists

the debt on the schedules, then why does the debtor care (and does the debtor

have standing) to object to any party filing a claim for that particular debt. The

answer to this query is that it is illegal to file a claim for a debt if there is no

legal basis to make that claim, regardless how the debtor listed it. Only

creditors who are actually owed a debt (or their representatives on their behalf)

should be allowed to file a proof of claim. Allowing claims to be filed by

creditors or servicers who cannot verify their ownership of the debt penalizes

other creditors, including credit unions and individuals, who do not regularly

securitize their debt and can prove their ownership. It harms them by diluting

the unsecured debt pool. It also detracts from the integrity of a system which

is very strict upon debtors to accurately disclose very accurate information, but

allows a much lower standard upon creditors filing claims. It is inequitable to

require a debtor to file information with the court that is complete, accurate

Comments on Proposed Changes to Bankruptcy Rule 3001 Page 2

and truthful (pursuant to 11 U.S.C. § 527(a)(2) (A)) but require a less stringent

standard for parties who wish to file a proof of claim.

Based on my concerns above I suggest the addition of the following

language to section 300 1(2):

"If the claim (or any part thereol) has been transferred from the original

creditor to another entity prior to the date the debtor filed a petition in

bankruptcy, the proof of claim shall provide proof that the entity filing the proof

of claim is the owner of the claim at the time it is filed. Proof by affidavit is

insufficient."

The reason for removing an affidavit as proof is due to the abuse of

affidavits as evidence. Some type of actual transfer documents should be

provided to demonstrate that the claim is actually owned by the entity at the

time the claim is filed.

Thank you for your consideration of my comments. Also, thank you for

your hard work and time drafting the amendments to the bankruptcy rules.

Please let me know I can be of any assistance or if you have any questions. I

remain,

Very Truly Yours,

lames J. H Hler

Attorney at Law

Direct Line: 618-310-1250

jhaller~tbcwam. com

Comments on Proposed Changes to Bankruptcy Rule 3001 Page 3

[Randall948]

Study your S.C. Exemptions. You have a 50K equity exemption on a homestead. 5k in a vehicle. 4k in personal property (i.e. stuff in your home) a 5k wildcard (EDIT: I mispoke partially. The 5k Wildcard I mentioned is ONLY for people not claiming a homestead exemption so maybe not usable to you) you can apply to whatever you choose. Lots of nice exemptions in SC for you. Learn them well.

Also the amount you make doesnt matter. Wage garnishment is illegal here and even if it were as you mentioned your SS cannot be garnished. Were I you I'd still look into a prepaid visa/mastercard to deposit your CC in to greatly reduce the prospect of a bank levy. Or alternately get your SS by check and cash it vs direct depositing it.

As to your other worries ....dont. Thats what they want. Put it this way I was in your shoes a while back and I called my county sherrif civil division and asked about the procedure for them coming to my home post judgment and taking posessions and such. They didnt know what I was talking about. Had never even heard of such happening. And THESE were your hypothetical "sherrif waltzing in" from your example.

In summary from all the research Ive done talking to multiple lawyers/judges/police in south carolina very VERY very little happens to you post judgment. Unless you have a LOT of tasty assets the judgment is just going to sit there for 10 years and gather dust most of the time.

To quote the lawyer I finally found after sifting through about half dozen ignorant ones "Almost all the people Ive encountered that have had a judgment against them have had NOTHING happen to them afterward."

In addition to further ease your mind I personally know of 5 people that have large judgments on them in S.C. for years and have had zero happen as a result. This is not second or third hand "stories" this is 1 family member, 2 good friends and 2 fellow employees I know well that have told me this.

Relax, breathe. Plan your defense and/or post judgment strategy.

Edited October 22, 2010 by Randall948

[OnTheWarPath]

Randall, Thank you so much for your response's. I didn't want to post this on the boards but I don't have 10 postings to email you privately.. My home is paid for and worth about $160,000..Does that mean if they execute a judgement for $3,500 (what they say I owe them), can they sell my house and keep everything but the SC $50,000 exemption? otherwords, they get $110,000 for their $3,500 judgement and I get $50,000 that SC allows for the exemption? That might be their motive if that is how the SC law works..

Another question...This might be something I had dreamed as my life seems to be consumed by all this...But, my home that I sold last year and used the money from it to buy this home, was given to me by my parents as a "gift"..It is not something I worked hard all my life for and not really my money that paid for it..If I am not mistaken, they are not able to take something that was given to you away, am I correct?

Edited October 22, 2010 by OnTheWarPath

[WhoCares1000]

No, Discover would only get the amount of their judgment and the rest would go back to you. Here is how the closing payment would work:

1) Fees to foreclose and sell the home to satisfy the lien are paid first

2) You get your $50,000 exemption

3) All liens are paid off (in this case, only discover for $3500)

4) Any excess proceeds goes to you.

Now even if you home is worth $160,000, realize that this would be a fireside type sale and as such, would not fetch $160,000

Now that we have gone over that, I have to say that you are a long ways away from that. I say do nothing right now because it does not sound like Discover wants to settle. You can however start to prepare a defense in case you are sued. You can look over other pleadings against this lawyer and Discover and see what cases were won by the defendant and why they were won. You can also get a lawyer prepped up to represent you in court should it get to that.

Learn your exemptions/non-garnishable assets. Learn what happens in case of a judgment to assets that can be lien/seized. In some states, the creditor can simply put a lien on the home but then has to wait until the home is sold.

Also realize that the process takes a while and at every stage, there is room for negotiation. Even if Discover is unwilling to negotiate today, the attorney may be willing to negotiate on the courthouse steps or after the judgment is entered.

[Randall948]

Whocares is absolutely right. I have some more info for you as well. Discover is known to be pretty sue happy so I did a search of my county courthouse records a few mins ago from 01/01/2010 to present and found a lot of lawsuits. A lot of them. I drilled down randomly on around 20 records looking at what actually happened and found none out of the randoms I pulled up in which discover actually did anything after judgment. The last line was default judgment. After that there should be a notation of "Execution issued" if they had ever actually gone and tried to collect on it. And "nulla bona" after that if they TRIED and failed to find siezable assets.

So in essence at least in my county Discover does jack with their judgments. Just sits on em and hopes their automatic lien on the debtors homestead turns up some fruit sometime during the judgments life. Much like Capital one.

Who you have to watch out for is often junk debt buyers (JDB's) executing their judgments as they have almost nothing invested in these debts and, as such a much higher potential profit.