Duke_Von_Sausage

[Arizona] Just settled a lawsuit with one debt collector, just discovered more on my credit report. Do I contact them and risk being sued?

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I just uncovered a letter sent from an old debt collector that is nearly a year old, back in 2015 around September.

This is just after I paid a massive medical debt that completely wiped me out with another company, and I had to take out a personal loan to do it.

One of the debts listed on this year old notice is a debt from 2011, and is nearing the statue of limitations in about 6-7 months.

Do I want to pay back the debt? Yes, I want to pay them and not get sued.

However, based on the age of the debt, I'm worried that as soon as I contact them, they'll automatically resort to suing me because of the age of the debt, without giving me a chance to setup payment options to begin paying them back.

There are a total of three different items on the debt, the largest one is the one nearing statue of limitations in 5 months. The other two have another 1-2 years on them.

So what do I do? I feel like I'm screwed either way. Do I contact them and risk being sued, or do I remain quiet and risk being sued?

I don't have the cash to pay them now, I have to wait until I get a school loan disbursement (in roughly two weeks) or my next year taxes to pay it off in full.

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If you don't have the money, then I would suggest waiting until you have enough to negotiate a lump sum settlement. Don't bother calling them. If they are going to sue, they will sue you and you can negotiate at that time. Otherwise, leave sleeping dogs lie.

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I'm just surprised they haven't sued yet, last year the debt was a couple thousand dollars. I'm terrified if it will be three by now with late fees.

In my head, I want to wait, but the anxiety is wrecking me. I can't afford to have a judgement placed on me, and I certainly don't have the money to outright settle for a dismissal.

The last dismissal costed 1k in lawyer fees alone, and that was only for him paying for the small claims fee and the lawyer charge.

If they bring the claim against me now, I dont know if I would be able to scrounge enough to pay for another dismissal.

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I defaulted on about $25k across 10 cards, an auto repo and HOA fees.  Most left me alone and the SOL is now expired.  I got sued three times for about  $7k total. I backed one away with arbitration and the other two got a judgment, but because of a technical gaffe on their part, one is completely uncollectable. The other hasn't lifted a finger to try to collect. 

The moral is they probably won't sue. If they do sue, you can probably send them packing with an arbitration demand. In the unlikely event they do get a judgment, they might not be able to collect it when all is said and done. Worrying about it won't solve anything. All you can do is wait and have a plan in place if you happen to get sued. If these are credit card debts, or some other debt with an arbitration clause in the contract, I'd plan on that being your strategy. 

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I really appreciate the advice. I'm doing my best to quell the constant anxiety I'm having over this. I've lost 20 lbs in about 3 weeks over this whole ordeal.

 

Unfortunately they are strictly medical debts across the board.

May I ask, what is it like to have a judgement on you? Does it tank your credit rating? Does it ruin your chances of purchasing a home? I've heard having judgements placed on you can really ruin your day.

I don't want to be irresponsible with this, honestly, I'm trying not to worry, but the idea of being sued into a state that would crush our finances, especially since we were just barely, barely starting to get by, is a difficult pill to swallow.

Compound this with the fact that our special needs child (autism) requires at least one of us to be home during constant schedule changes (we can't afford the licensed child care he would require to ensure his safety), means one of us works full time, the other part time.

 

I wouldn't be able to afford a lawyer at all, how did you manage to work all that out from with your judgements? Honestly, I don't think I'm nearly as intelligent as you are. I find the legal wording to be confusing at all times, and I really have to work out what people are saying when they say it.

The last one we just settled was with Grant & Weber, and they were incredibly aggressive in their law suit and practices to collect the debt.

 

I made the error for a cease and desist on my first DV letter, and that was foolish. It prompted them to immediately sue.

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I don't know what effect the judgments have had on our credit rating because our credit was eviscerated by the time the judgments came along.  I forgot I had some medical collections in addition to the stuff I mentioned before, so imagine 15 or so accounts in collections and all of the credit accounts showing 30-60-90-120 day lates and eventually charged-off.  What are a couple of judgments going to do, you know?  The one issue with judgments in AZ is they can be renewed indefinitely, meaning they can possibly follow you the rest of your life if you don't pay them off.  I don't know how tenacious debt collectors are with renewing but I'll find out in the next 2 or 3 years.  I'm guessing they might renew once and then let it expire after that.  Especially when they haven't done anything to try to collect it.

I had some unfortunate timing issues that are too much to get into here.  You can read the thread in my signature if you have insomnia. :) As far as how I did it, I got a ton of advice from some amazing people here and I spent countless hours working on my cases.  My case was active for 18 months, including an appeal.  Over that time  I lost valuable time with my family I can never get back and I lost my case despite the time and energy I spent.  What ultimately did me (and several others since) in was a 2013 appeals court ruling that says that a witness can introduce business records created by another business, even when the witness has no personal knowledge of how the records were created or maintained. Because of that, I would never suggest anyone try to do battle in an AZ court as a first choice unless they are single and have nothing better to do for the next year and 1/2.  If arbitration is not an option, I would suggest trying to settle.  If that's not an option, then you can try to fight it in court if you have the time and energy.  You don't have to go whole-hog like I did.  Sometimes you get lucky and they blow it with some evidence or something.  But if that's not an option, I would recommend looking into filing bankruptcy.

So based on what you've said so far, my advice for you is lay low.  If you get contacted before SOL expires, see if they will settle.  If not, give it whatever effort you can in court if you get sued and if you lose, look into bankruptcy.

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I sincerely appreciate the help you've given me. It gives me hope when we're dealing with such terrible financial pressures at the moment.

 

I wish I had the time, I really do to invest into a case if it came up, but honestly, we're so broke that settling is more of an option, especially if lawyer fees will add even more debt to the amount. If I had an updated total and the amount to actually pay it off, I'd just pay it off in full right now.

 

May I ask, is there a specific area I can go to, in case I do get sued, to research and request arbitration? I've been trying to google online, but my googlefu is extremely weak, and the information I've found so far doesn't tell me if arbitration includes medical debts (such as mine from when we visited the hospital for my son and myself, I'm guessing) such as mine, and the details I need to actually bring with me and officially request the arbitration without them trying to deny it.

 

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@Duke_Von_Sausage

You asked about the effect of a judgment.   Of course, there's wage garnishment if one's state allows for it.   Also, a lien can be placed upon a home and vehicle (depending upon your bankruptcy laws).  It can affect one's efforts to buy a home or a car.    It's usually not possible to get a mortgage if one has an unpaid judgment that is still within the SOL.   It is possible to buy a car, but your interest rate will be much higher.

I believe that judgments in AZ last 5 years and can be renewed for another 5 years.   I don't know if they can be renewed more than once.  @Harry Seawardcan answer that question.

Just for the heck of it, check the bankruptcy exemptions in your state.   Those exemptions should apply to judgments.   If you're not sure about them, Harry could explain them.

The point is that a judgment creditor can only do so much.   If you don't have assets or if money is owed on those assets, there's not much a judgment creditor can do.

In regard to the debt in your first post, if it's going to be outside the SOL in 5 or 6 months, as others have advised, I'd lay low.

We don't know the total amount of your debts, but if the amount is substantial, have you considered bankruptcy?   It's a last resort, but if you are truly broke, it's something to consider because it would allow you to "start over". 

You also mentioned that the debts are medical in nature.   I don't mean to be personal, but is the medical situation still ongoing?  

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@bv80

I really appreciate the feeback you and harry as well as others have given me. It's helping me steer through this situation and try to keep my anxiety at a minimum.

The health situation still isn't going on. They're all from past medical either with child labor, emergency room vists, etc.

To the best of my knowledge, the debt as of last year was around the ballpark of 2300ish dollars (three different items on the list), the largest one was the one that is about to fall off.

To my, and my wife's knowledge, the last attempt they made to contact us was a letter last year that I found behind the refrigerator around September 2015. Since then, I have seen no specific communication attempts, and my email or voice mail has been silent in regards to their organization as well.

 

If I had the money, I'd pay it off in full, but I'm worried that even when I do save up the amount, it'll be much larger than I expect or can pay due to "late fees, or interest", and then I'm in the same boat.

 

As for being broke, I should better explain. After paying for a dismissal of this last law suit, our savings was annihilated. Looking at the budget, after we pay all bills, food, diapers, gas, and other misc things required for crucial living, we're roughly saving 150-200 dollars a month, if we're lucky with gas or food.

 

We still owe on our house, but the equity has gone up a great deal, and our cars are luckily paid off. I'm terrified of a judgement because I don't want to lose it and send my family spiraling into bankruptcy. We're trying to avoid that, and still keep a roof over our heads.

I've tried to talk to one company as it is to try to refinance and pull 10k out of the house to pay for the loans, but according to our equifax rating, they wont do that (we're like 6 points lower than what is required for that specific company to allow us to take out a loan against the house when refinancing).

 

 

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3 hours ago, BV80 said:

I believe that judgments in AZ last 5 years and can be renewed for another 5 years.   I don't know if they can be renewed more than once.  @Harry Seawardcan answer that question

They can be renewed every 5 years indefinitely. 

 

4 hours ago, Duke_Von_Sausage said:

May I ask, is there a specific area I can go to, in case I do get sued, to research and request arbitration?

There is a "is there a lawyer in the house" forum here and an "arbitration" sub forum of that. You can start a new thread there if you get sued. Or just continue with this thread since it already has all of your information. 

3 hours ago, Duke_Von_Sausage said:

I'm terrified of a judgement because I don't want to lose it and send my family spiraling into bankruptcy.

I know bankruptcy sounds awful, but I suggest you meet with 3 or 4 BK lawyers on a free consultation. BK stops all of your creditors in their tracks, judgment or not, at least as long as your BK proceedings are underway. If you qualify for Ch.7, it completely discharges all of your unsecured debt. The challenge for you will be the equity in your house, but a BK lawyer can tell you with a pretty good level of certainty how that and other property impacts your ability to qualify. And then there's also Ch.13 which is essentially where your creditors usually agree to accept a lesser amount and the court consolidates all of your debts so you make one monthly payment.  Again, your real and personal property will come under scrutiny so we're back to you need to talk to a lawyer who will review your situation and be able to give you a pretty good idea how things will unfold for you. My biggest regret is not filing BK when I qualified for Ch. 7.

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8 hours ago, Duke_Von_Sausage said:

@bv80

I really appreciate the feeback you and harry as well as others have given me. It's helping me steer through this situation and try to keep my anxiety at a minimum.

The health situation still isn't going on. They're all from past medical either with child labor, emergency room vists, etc.

To the best of my knowledge, the debt as of last year was around the ballpark of 2300ish dollars (three different items on the list), the largest one was the one that is about to fall off.

To my, and my wife's knowledge, the last attempt they made to contact us was a letter last year that I found behind the refrigerator around September 2015. Since then, I have seen no specific communication attempts, and my email or voice mail has been silent in regards to their organization as well.

 

If I had the money, I'd pay it off in full, but I'm worried that even when I do save up the amount, it'll be much larger than I expect or can pay due to "late fees, or interest", and then I'm in the same boat.

 

As for being broke, I should better explain. After paying for a dismissal of this last law suit, our savings was annihilated. Looking at the budget, after we pay all bills, food, diapers, gas, and other misc things required for crucial living, we're roughly saving 150-200 dollars a month, if we're lucky with gas or food.

 

We still owe on our house, but the equity has gone up a great deal, and our cars are luckily paid off. I'm terrified of a judgement because I don't want to lose it and send my family spiraling into bankruptcy. We're trying to avoid that, and still keep a roof over our heads.

I've tried to talk to one company as it is to try to refinance and pull 10k out of the house to pay for the loans, but according to our equifax rating, they wont do that (we're like 6 points lower than what is required for that specific company to allow us to take out a loan against the house when refinancing).

 

 

Duke,

Everybody's anxiety tolerance (just like their pain tolerance) is different.  And you have the added responsibility of a special needs child.  It may well be easier and quicker just to BK yourself out of this situation you're in.   But like Harry said, get 3 or 4 opinions.   BK carries no social stigma, but a judgment against you can mess your life up.

 

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The University of AZ Law School in Tucson runs a bankruptcy clinic.  See if they can help you.  Law school clinics are staffed by law school students but they are supervised by the law school faculty.  They can be an excellent and free or low cost source of help.

Law Clinics - James E. Rogers College of Law - University of Arizona

https://law.arizona.edu/law-clinics
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James E. Rogers College of Law
Student-Organized Clinics Bankruptcy Reaffirmation Clinic Domestic Relations ClinicHimmel Park Legal Referral Clinic Homeless Legal Clinic LGBT Pride ...
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