oneobserver

SmallBiz Debt Now Personal-Help!!

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Hi, I'm in NY, hoping for some guidance and would greatly appreciate any insight and information. I have an LLC which established a tradeline with a local merchant. Due to unfortunate events, a balance on the account was unpaid and the merchant gave it to his attorney to act as a debt collector in 2006. I've been meaning to pay since then. The attorney debt collector called me into his office and told me I had to sign a Affidavit of Confession or something like that. Little did I know back then that this made the debt now a personal obligation. So he proceeds to filing: a lien against my property, a judgment against me personally which is on my CR.

Question, I am planning to pay it but seek to delete entirely from CR and as an encumbrance on my property.

Judgment amount is $2,400. Through a legal plan I'm covered under, I sought the help of a local attorney to negotiate this. She negotiated alright! $3,000.

I'm not paying this much.

How much can I possibly negotiate this down to, 25% good enough to ask them to agree to join in a motion to vacate and also release the lien?

In the settlement agreement, do I ask them to file the motion or do I attach a Vacatur of Judgment and Lien, both with Prejudice?

Are there any other aspects I should consider in putting the agreement together?

Wouldn't have the merchant already written this off as bad debt back in 2006 (and conversely, any monies they do get is a plus on their books for this year?)

Again, I'd greatly appreciate your feedback.

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Are you sure the document you signed is called an " Affidavit of Confession"? It is most likely called an Affidavit of Confession of Judgment. Which means you already agreed to the judgment the moment you met with the collection attorney and signed your agreement. :(

BTW, this is the reason you are not supposed to sign anything without understanding what you are signing. It does not matter what the collection attorney was telling you verbally - the signed agreed judgement overrides his/her verbal statements.

As to your current attorney negotiating the interest and principal payment to $3000 - it is probably a reduction from the actual amount due since your judgement has been collecting interest the entire time. I am not saying your current attorney did a bad job or a good job - because we don't have all the facts (like the date of the judgment, the interest rate etc).

IMO you should take this as a lesson in learning not to sign something you don't understand and pay the judgment you already agreed to in writing. Make sure you get a satisfaction when its paid.

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So I was looking for advice on how to fix it but your comments are valid for anyone else who may be in this situation and help them avoid it. Thank you.

You've already been given solid advice.

... pay the judgment you already agreed to in writing. Make sure you get a satisfaction when its paid.

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Of course! You can attempt to do whatever you want, but if you have any assets, they will be unlikely to take less than the full amount. Why take significantly less $$ today when they can just attach your property and get paid the full amount + interest at a later time?

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The property which the lien/encumbrance is attached to is in foreclosure and it is in 4th position (after of course the mortgage itself which is also upside down), Given this, do you think they may be willing then to take less than the face amount? If so, what is your take on what I should start at?

Again, I fully understand your reply is solely an opinion and not legal advice, but you certainly have a much better understanding than me !

I greatly appreciate your insight.

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Is the lien the same debt as the judgment? Or is it a different debt?

If it is a different debt, you are in excellent position to negotiate the lien because it will be wiped out in the F/C action. So, something is better than nothing. But then again, why pay anything because it will be wiped out?

On the other hand, if it is the same debt and the creditor obtained a judgment and then it attached to your property, the lien will be wiped out but the judgment remains against you personally. So you can still negotiate, its just as Bigwoodystyl pointed out the judgment holder has the option to be obstinate and hold out. Check your states statutes, but I think NY has a 20 yr judgment period with the ability to renew it.

Edited by Denita

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Thanks Denita, very good points. It is the same debt, I guess he was securing payment. I think my best strategy will be to first file a motion to vacate the judgment, not sure on what basis, and then negotiate the settlement inclusive of vacating the lien on the basis it's in 4th position and that I'm waiting for foreclosure judgment and that the chances of getting paid are nil.

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Be aware, the first thing the judgment holder will mention is that he has basically an agreed judgment* since you signed for it. I'm not beating a dead horse here - the attorney was well aware of what he was doing by having you sign it X years ago. You might be able to prevail by saying you didn't understand what it was you were signing or that the paperwork was misrepresented to you at the time of signing. I don't know if that will work, you might want to look up cases in your area to see if any judgments were dismissed on that basis. Have the cases with you for reference before you speak to the attorney to negotiate.

*BTW, that agreed judgment is called many things - consent judgment/agreed judgment/confession of judgment etc. The whole idea behind it is you agreed you owed the debt and you are willing to pay and willing to have a judgment against you until it is paid.

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LOL. Technically, at the time I thought I was just agreeing that I owed it and willing to pay it, I didn't know I was also agreeing to have a judgment against me!

Ahh, hindsight....

What is the website to look up case law in NY, do you know?

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But isn't negligence of the law not an admissible defense generally?

Yes :(

But it doesn't hurt you to play up your "unsophisticated consumer" defense.

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In looking at this credit mess, I'm just downright stupid, I should tell the court that...

Oh...don't feel that way. I was not making an attack against you, but a viable alternative to the situation you find yourself in now. I use the unsophisticated consumer standard where ever possible. I am not an attorney, and don't pretend to be one. I assume that each and every attorney has more knowledge and education than I do; therefore, they are held to a higher standard.

You might want to check out the 'unsophisticated consumer standard' here and search other areas for it, as it is a real defense. Sometimes it is also referred to as the "least sophisticated consumer". http://www.lectlaw.com/files/ban07.htm

Check out this link too: http://www.jtexconsumerlaw.com/V7N1pdf/V7N1debt.pdf

Personally, I hope you are able to show you were duped into signing a consent judgment without understanding the ramifications or even knowing it was a consent judgment so you can get the judgment vacated (best of all circumstances). It is worth a try. Worst case, you pay the $3000 already negotiated and have the satisfaction recorded so it can never come back to haunt you again. Maybe then you can sue for FDCPA violations to recoup some of your expenses. I don't know, but it is worth trying.

Edited by Denita

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Please don't misrepresent my statement, it is not your comment I was reflecting on by any means, I understand what you meant. I was reflecting on my own pence wise and pound foolish credit behavior. There was a lot going on in 2005-2006 in my life, none of it good, and I was truly mindless about all of this, as is evident.

I should post on lessons learned:

Always manage or at the least supervise your own finances when married.

ALWAYS read and analyze documents/agreements, consult with a lawyer, at least a law student!

NEVER believe an opposing attorney, lol. daa

NEVER SAY NEVER (and I don't mean Bieber), this credit will get fixed!!!

Etc

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But wait, you say worst case is to pay the $3,000. The lien and judgment are for the original $2,400. $3,000 is what the legal plan attorney negotiated with the OC's attorney/collector on the basis that it had accrued interest and a year earlier I talked to the attorney and he in turn told his client I would pay $3,000. He told my attorney he was embarrassed to go back to the client with a lesser amount.

I guess it depends on first getting the judgment lifted to increase my negotiation posture.

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But wait, you say worst case is to pay the $3,000. The lien and judgment are for the original $2,400. $3,000 is what the legal plan attorney negotiated with the OC's attorney/collector on the basis that it had accrued interest and a year earlier I talked to the attorney and he in turn told his client I would pay $3,000. He told my attorney he was embarrassed to go back to the client with a lesser amount.

I guess it depends on first getting the judgment lifted to increase my negotiation posture.

Ok, new information in this post changes the situation, IMO. The $3000 was negotiated by a "legal plan attorney" and was negotiated a year ago.

I would never use a legal plan attorney for anything...my personal opinion. You get what you pay for and those types of lawyers generally do well with a template type issue and not an actual negotiation or drawn out legal defense.

The fact that the attorney would be embarrassed to go back to the other attorney with a lesser amount tells you a lot about his negotiating skills, or lack thereof.

If you can lift the judgment, great. If not, there is nothing to stop you from negtiating the settlement and release yourself. You are under no obligation to stick to the $3k, its been a year already - so start over.

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Yep, totally agree. I'll motion to vacate first on the basis of being uninformed. Once removed I'll go for 25%, which I think is very generous.

In the meantime, I had obtained my 3 credit reports and sent them each disputes since this item and all the others were either inaccurate in some detail or incomplete. In that letter I also asked that if verified, to tell me the furnisher of information, method of verification, etc. My point with this was to track exactly who is feeding public records information to each of the CRAs. I sense it's Lexis. So instead of also requesting reports from Innovis, Lexis, Lakeside, Thomson, ChoiceTrust, courthousedirect, I am waiting to see who is feeding who, I'll post it here when I get it.

As I clean this up, I'm also building new credit. Even with all 4 unpaid judgments I was still able to open 2 store cards about 3 weeks ago, go figure!

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Ok, so I got a copy of the original judgment which also has a copy of the Affidavit of Confession of Judgment. My name is spelled incorrectly. The Judgment was entered March 2007, the Affidavit signed Feb 2007.

Is there ANY way I can motion this to vacate it?

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