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Disabled Dad Sued by Municipal Credit Union/Stern &Stern (OC) in NY, Need Help ASAP!

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Hi Everyone,

 

Last year my father had a botched surgery which resulted in stroke as well as short term memory loss. Since this occurred my sister and I have tried our best to make sense of his accounts and found out he had more debt than could be handle with the medical situation. One of those accounts being Municipal Credit Union which my parents had a checking account and visa card. I believe also a LOC, but not sure. 

 

Once I actually got hold of the account(s) the credit card was apparently behind by two months with the minimum payment of over $800-900. The union actually had the nerve to put a freeze on the checking account (which my dad received his social security & pension payments) until the payment was made. Basically no withdrawals from the atm or bank counter were allowed not even for groceries. After the second time it happened in which I had explained my dad's situation to reps and asked them to negotiate for a lower payment ($300), they refused. We couldn't pay more than that because my dad is on a fixed income and medical care was first priority. Since they refused to work with us and continued a withdrawal freeze, we left the Credit union and eventually stop paying on the visa account as well. 

 

As of yesterday evening there were papers left at the door stating MCU is suing my dad for over $15K not including interest and lawyers fees. Their attorneys are Stern & Stern. The summons was dated May 22 but the served June 10th. This brings me to my first question:

 

1) Do we have time from the date stamped on the summons or the time it was allegedly delivered to answer? 

 

2) In the summons, it claims in the list of cause of 1st actions that: The department of Consumer affairs doesn't require the plaintiff (Municipal Credit Union) to be licensed. Is this true for credit unions? Even when issuing credit cards? The summons also fails to identify the card or account number. Is this legal?

 

3) Can his pension and Social security be garnished if they win? 

 

4) I was listed as limited power of attorney on this bank account, can they come after me for the debt? 

 

5) We have been considering filing for bankruptcy for him because of this debt, mounting medical bills and three other accounts. Is it still possible to proceed and have this part of the bankruptcy? 

 

Also, I don't know if its worth mentioned that this credit card account hadn't been used in years. I APPRECIATE ANY HELP ON THIS!!

 

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1) Do we have time from the date stamped on the summons or the time it was allegedly delivered to answer? 

 

2) In the summons, it claims in the list of cause of 1st actions that: The department of Consumer affairs doesn't require the plaintiff (Municipal Credit Union) to be licensed. Is this true for credit unions? Even when issuing credit cards? The summons also fails to identify the card or account number. Is this legal?

 

3) Can his pension and Social security be garnished if they win? 

 

4) I was listed as limited power of attorney on this bank account, can they come after me for the debt? 

 

5) We have been considering filing for bankruptcy for him because of this debt, mounting medical bills and three other accounts. Is it still possible to proceed and have this part of the bankruptcy? 

 

Also, I don't know if its worth mentioned that this credit card account hadn't been used in years. I APPRECIATE ANY HELP ON THIS!!

 

1)  You have from the date it was delivered/served to answer not the date the case was filed.

 

2)  The summons does not have to have evidence in it.  The summons is like a traffic ticket it merely notifies you of the pending court date.  As for the CU to be licensed that is a matter of state law but not a defense to the suit.  

 

3)  NO.  Both are exempt from garnishment and bank levy.  The bank account can hold up to two months worth of benefits that cannot be seized or frozen.

 

4)  No.  However, do make sure your father's name is not on any accounts that have anyone else's money going in to them.

 

5)  Absolutely and if he has this much debt BK makes perfect sense.  

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I'd look into if the credit union can even freeze funds under New York law, including pre-judgment as is happening here with the credit union probably hoping some clause in their member agreement covers them.
Consider contacting a NACA attorney for a consultation-
Some of these credit unions (Navy Federal) are even worse than the one you're dealing with and have been known to not only lock account access but go into checking or savings to pay a payment on a credit card as soon as it is a few days late.
File a complaint at CFPB on the credit union freezing the funds making sure to mention they are exempt. The credit union should have to answer that fairly quickly.
 
 
 
 
Important Information about Money that Cannot Be Taken to Pay Judgments
Under State and Federal law, certain money may never be taken by creditors to satisfy judgments. This money is considered “exempt
funds.” You may choose to use exempt funds to pay a debt you owe, but a creditor cannot freeze or forcibly take those funds from you or your bank account to pay off a debt.
Exempt funds Include:
• Supplemental Security Income (SSI)
• Social Security retirement
• Social Security Disability (SSD)
• Public assistance (Temporary Assistance for Needy Families, TANF)
• Income earned while receiving SSI or public assistance
• Disability benefits
• Workers’ compensation benefits
• Veterans’ benefits
• Black lung benefits
• Spousal support, maintenance (alimony), or child support
• Railroad retirement
• Unemployment benefits
Note:
Under the Exempt Income Protection Act of 2008, your bank may never take or freeze the first $1,740 in your bank or credit union
account to pay a judgment, whether or not your account has exempt funds.
For more information about exempt funds and where to turn when you need assistance, visit nyc.gov/consumers and download
DebtCollection: Money Judgments and Frozen Bank Accounts, Information for Consumers.

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@Fight4Freedom

 

In NYC, it is illegal for a credit union to freeze  ALL the money in your account.  Read this link and complain to the appropriate agencies.  There is also a link to legal help.

 

http://www.nyc.gov/html/dca/downloads/pdf/web_debt_collection_fact_sheet.pdf

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Thank you all for your immediate responses. @debtzapper we pretty much figured it was illegal for them to do so, especially without any notice. However, I have heard of some very harsh things that MCU does to it's members which are completely out of line. They have already been aggressive with sending my dad a summons and I don't even believe that they have otherwise tried to contact him in terms of notifying and collecting the debt. 

 

 

@Fight4Freedom

 

In NYC, it is illegal for a credit union to freeze  ALL the money in your account.  Read this link and complain to the appropriate agencies.  There is also a link to legal help.

 

http://www.nyc.gov/html/dca/downloads/pdf/web_debt_collection_fact_sheet.pdf

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I am concerned that despite the fact that they cannot garnish these wages, they will find a way to do it should they win.  Does anyone know the best way to go about answering and fighting a credit union in court? I know original creditors are much tougher than JDB. Is it best to just, go through the motions and then present the court with the bankruptcy proceedings? 

 

 

 

 

I'd look into if the credit union can even freeze funds under New York law, including pre-judgment as is happening here with the credit union probably hoping some clause in their member agreement covers them.
Consider contacting a NACA attorney for a consultation-
Some of these credit unions (Navy Federal) are even worse than the one you're dealing with and have been known to not only lock account access but go into checking or savings to pay a payment on a credit card as soon as it is a few days late.
File a complaint at CFPB on the credit union freezing the funds making sure to mention they are exempt. The credit union should have to answer that fairly quickly.
 

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Btw the court answer looks like this (below) which was taken from the court's website. Would it be appropriate to do a general denial as well as defense such as #4, and #20 for exemption of income since my dad receives only SS and pension. Also should I do a counterclaim?

 

ANSWER:

(Check all that apply) 1.____ General Denial: I deny the allegations in the Complaint.

SERVICE

2.____ I did not receive a copy of the Summons and Complaint.

3.____ I received the Summons and Complaint, but service was not correct as required by law.

 

DEFENSES

4.____ I do not owe this debt.

5.____ I did not incur this debt. I am a victim of identity theft or mistaken identity.

6.____ I have paid all or part of the alleged debt.

7.____ I dispute the amount of the debt.

8.____ I do not have a business relationship with Plaintiff (Plaintiff lacks standing).

9.____ The NYC Department of Consumer Affairs shows no record of plaintiff having a license to collect debt.

10.___ Plaintiff does not allege a debt collector’s license number in the Complaint.

11.___ Statute of limitations (the time has passed to sue on this debt).

12.___ This debt has been discharged in bankruptcy.

13.___ The collateral (property) was not sold at a commercially reasonable price.

14.___ Unjust enrichment (the amount demanded is excessive compared with the original debt).

15.___ Violation of the duty of good faith and fair dealing.

16.___ Unconscionability (the contract is unfair).

17.___ Laches (plaintiff has excessively delayed in bringing this lawsuit to my disadvantage).

18.___ Defendant is in the military.

19.___ Other ________________________________________________________________________

 

OTHER

20.___ Please take notice that my only source of income is _______________________, which is exempt from collection.

 

COUNTERCLAIM(S) 

21.___ Counterclaim(s): $___________________ Reason:__________________________________________

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First off, I would agree to everything Clydesmom said regarding the answers to your initial questions. As for the CU being aggressive in cleaning out other accounts, let those banks know today that those accounts contain only exempt funds under Federal and NYS law and if they do freeze those accounts, they may find themselves in trouble. I would also send a letter to the attorney for the bank letting them know this too.

As for the answer, there is a fine line between giving legal advice and simply having a discussion and I have to tread carefully here. Basically, you want the answer to say there is a question on who owns the debt, whether the owner has the right to collect the debt (since they are a NYS Credit Union, I would assume yes but make sure), whether the defendant owes the debt, and if the amount is correct. Since this is a CU, they might be able to prove it very easy.

Another avenue to look under is in regards to the meaning of Violation of the duty of good faith and fair dealing in relation to the freezing of the accounts. Also, look up Doctrine of Unclean hands if the freeze did violate law.

And certainly, if the defendant has exempt income/assets and the court is asking, tell them.

Before the answer is filed, file complaints with the NYS Consumer Affairs Banking division, NYS Attorney General (who has political aspirations and would like a nice took on the aggressive bank case), and the CFPB. After you file the answer, inform the attorney that you have filed those complaints, that all the defendant has is exempt income and assets, and that a BK will be coming their way, even if they win. The attorney will then have to decide if this is really worth the fight.

Finally, if you have limited power of attorney, they cannot come after your assets/income as long as your assets are separate from your father's.

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You are in luck. I was in a similar situation and was sued by the same law firm by the same bank. I'd be happy to help. You must respond quickly to the complaint. I think you have 20 to 30 days from the date served to respond.

You might not be aware of it but most of these loans are covered upto $5000 by CUNA Mutual (Credit Union National Association). yes an advocacy group and the Credit Unions insurer. Your father is covered under this insurance and he probably had no idea he was paying for. Call them up at 800-621-6323 and file a claim ASAP. It's quick and easy.

Next

Go to the Civil court in whatever county is on the summons. Respond, answer the summons and file a counter claim. Make the court aware that you filed a claim with CUNA etc.... And that your father is disabled etc...

You will have to appear in court at a later date but don't sweat it, it's just procedure. The bank will try and make you an offer to settle for a lesser amount.

Dont waste your money hiring an attorney, you can handle this on your own.

Don't sweat it. Just take action. Contact me if you have any questions email me at cruisenlong@yahoo.com

Don't give up. It's not that bad. Most people lose by default because they don't answer the complaint and don't show up. We're New Yorkers, we fight.

You are in luck. I was in a similar situation and was sued by the same law firm by the same bank. I'd be happy to help. You must respond quickly to the complaint. I think you have 20 to 30 days from the date served to respond.

You might not be aware of it but most of these loans are covered upto $5000 by CUNA Mutual (Credit Union National Association). yes an advocacy group and the Credit Unions insurer. Your father is covered under this insurance and he probably had no idea he was paying for. Call them up at 800-621-6323 and file a claim ASAP. It's quick and easy.

Next

Go to the Civil court in whatever county is on the summons. Respond, answer the summons and file a counter claim. Make the court aware that you filed a claim with CUNA etc.... And that your father is disabled etc...

You will have to appear in court at a later date but don't sweat it, it's just procedure. The bank will try and make you an offer to settle for a lesser amount.

Dont waste your money hiring an attorney, you can handle this on your own. You can also file a motion to vacate judgement or other motions to release the freeze etc.... You can access pretty much any form on the courts website

Don't sweat it. Just take action. Contact me if you have any questions email me at cruisenlong@yahoo.com

Don't give up. It's not that bad. Most people lose by default because they don't answer the complaint and don't show up. We're New Yorkers, we fight.

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You are in luck. I was in a similar situation and was sued by the same law firm by the same bank. I'd be happy to help. You must respond quickly to the complaint. I think you have 20 to 30 days from the date served to respond.

You might not be aware of it but most of these loans are covered upto $5000 by CUNA Mutual (Credit Union National Association). yes an advocacy group and the Credit Unions insurer. Your father is covered under this insurance and he probably had no idea he was paying for. Call them up at 800-621-6323 and file a claim ASAP. It's quick and easy.

Next

Go to the Civil court in whatever county is on the summons. Respond, answer the summons and file a counter claim. Make the court aware that you filed a claim with CUNA etc.... And that your father is disabled etc...

You will have to appear in court at a later date but don't sweat it, it's just procedure. The bank will try and make you an offer to settle for a lesser amount.

Dont waste your money hiring an attorney, you can handle this on your own. You will be better off using the money to pay for your settlement if you agree on one.

Don't sweat it. Just take action. Contact me if you have any questions email me at cruisenlong@yahoo.com

Don't give up. It's not that bad. Most people lose by default because they don't answer the complaint and don't show up. We're New Yorkers, we fight.

.

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You might not be aware of it but most of these loans are covered upto $5000 by CUNA Mutual (Credit Union National Association). yes an advocacy group and the Credit Unions insurer. Your father is covered under this insurance and he probably had no idea he was paying for. Call them up at 800-621-6323 and file a claim ASAP. It's quick and easy.

 

@influencer could you post some detail on this insurance plan, please? Is this it?

This looks like credit card insurance where you are aware you were paying an optional premium for it on top of your monthly credit card payment but if you haven't participated in the optional coverage, they won't cover anything.

http://prtlimages.cunamutual.com/imageserver/Portal/CUNAMutual.com/Media/articulate/CDCL_Foundations_LDP/Example%20Product%20Sheet.pdf

https://membersproducts.com/ss/claims/ClaimsStatus/FAQ.aspx

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is your father ambulatory? filing in answer in NYC is going to require a bunch of Court appearances.  

 

If you hire an attorney to file the answer on your behalf, no Court date is issued and your father does not have to show up, except for a trial.  However, if the plan is to file bankruptcy - do a pro se answer - get the first appearance adjourned long enough to seek out the help of a BK attorney.

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