bank of america lawyer send a letter

[Jerry Ser]

Not sure where to post this. I received a letter from Rubin and Rothman New York ( I live in New York City/Queens) about a old Bank of American credit card debt.  It reads that the "creditor has a claim against you in the above amount" (10,600). Bank of AMerican is stated as Current creditor and as an Original creditor. The letter says that "unless you dispute the validity of the debt, or portion thereof, within thirty days, we will assume the debt to be valid. If you notify us in writing withing 30 days ...we will obtain verification of a debt and or a copy of a judgment against you and mail it..." What do I do and how to I respond? I have no big assets or property and all my bank money are exempt (judgement proof). I make $250-300  a week after taxes from wages and I have about 2,000 in the bank. No property except a 25 year old car (market value $2,000) and $4,000 life insurance . What should I write back. Bank of america told me that the account is no longer with them and is withe the above mention law firm.  TRAKAMERICA was mentioned too. Perhaps the lawfirm works for TRAKAMERIKA. Last time a made a payment to the bank of america was less than three years ago. Bottom line is I have no money to pay (unless they accept less than 10% of the original).

[BackFromTheDebt]

The first step is, within 30 days, to request validation of the debt.  If this is already at an attorney, the odds are almost 100% he can validate.  

The first reason for demanding validation of the debt is simply to buy a little time while you work out your strategy.  If you really, really are "judgement proof", there is SOME chance the attorney will accept a 10% settlement, better to get something than nothing.  

The second reason, since this is an old debt, is to see if it is still within the NY SOL.  When you get the information, you should have your answer.

HOWEVER, you really don't know what will happen.  There are some likely and unlikely things, and both have happened.

The attorney might not have anything to validate with (unlikely.  This used to happen a LOT with BoA in the old days, but they cleaned up their data) Not likely.

The attorney might stick it in a drawer for a while and forget about it until past SOL.  (I know of cases where this happened, and it ALMOST happened to me).  Not likely.

The attorney and BoA might be willing to negotiate small settlement.  In the old days, BoA would often negotiate small settlements.  I have NO idea if they still do.  Pretty likely, hard to say.

They might sue.  That is also a strong possibility.  In that case, you need to figure out how to be judgment proof for sure.  

[Jerry Ser]

Thanks for your reply. So, in answering back to the lawyer, in writing, I propose of sending then a CEASE LETTER (EXEMPT INCOME).  I read about this at the New Economy Project where they provide instructions on credit debt issues. I don't think is a good idea to mention right now that I am willing to settle for 10%. What do you think? After I send them the CEASE letter they may propose a settlement and then I will answer. If they sue I will put down as an answer with the court clerk PROTECTED INCOME and GENERAL DENIAL as to the specific amount they claim. . In New York, bank accounts are protected with less than 3,600 if from wages and weekly income after taxes $450. I am below in both categories so I must be judgement proof. I Any comments will be appreciated.

[Clydesmom]

1 hour ago, Jerry Ser said:

So, in answering back to the lawyer, in writing, I propose of sending then a CEASE LETTER (EXEMPT INCOME).

NO.  You do not send a cease and desist letter when the SOL for suit is alive.  You send a letter stating "I request validation of the debt you contacted me about in your letter dated [date]."  NOTHING more.  Send it certified mail return receipt.  This buys you some time.

1 hour ago, Jerry Ser said:

After I send them the CEASE letter they may propose a settlement and then I will answer.

No.  They can contact you legally one more time to tell you what action they will take and with BoA they WILL sue.  Sending a cease letter does not mean they cannot sue you.

1 hour ago, Jerry Ser said:

If they sue I will put down as an answer with the court clerk PROTECTED INCOME and GENERAL DENIAL as to the specific amount they claim.

Here is the major problem: exempt income does not mean they cannot sue you or get a judgment.  It simply means they cannot garnish the source or levy your bank account.  You are not judgment proof.  They can get one.  Whether they can ever collect on it is another matter.  

Some creditors will drop collection efforts if they are given proof that the Defendant is collection proof.  That means if you do inform BoA that your income is exempt they MAY by company policy NOT law decide to drop it and close the efforts.  They are not required to.  They will ask for proof of that status through disability records and bank statements.  If you don't provide them they can and will continue because they hear false statements to that effect daily.  

On the other side there are creditors that do not care one iota if you are collection proof right now and will take the judgment regardless.  They figure you may want or need new credit in the future and will have to deal with them.  Especially considering in many states judgments are good for 10-20 years and collect 10% per  year interest.  Or, you just might win the lottery where they can seize bank account money.  Either way they are willing to take the risk they never collect.

 

[Jerry Ser]

Thank you for replying. By judgement proof I only meant they cannot garnish wages. I can prove through bank statements that I am, and have been, below the exempt amount. Of course they can sue, or sue again at a later time. The CEASE LETTER  is only to have a record that I am informing them that they cannot collect even if they win a judgment. If I do not send the CEASE letter what should I do? Wait for them to send me another letter? or contact them? and tell them what?  You wrote "inform BoA that your income is exempt they MAY by company policy NOT law decide to drop it and close the efforts" That's what I meant by the CEASE (EXEMPT INCOME) letter. If you mean something else how should I inform BoA? The case now is with the lawyer. When I called BoA they told me the account is not with them and they mentioned TRAKAMERIKA and the lawyer's name (not sure if the lawyer represents TRAKAMERICA). So whom should I write  to let them know I am income exempt and isn't that a CEASE (EXEMPT INCOME) LETTER? here is a sample  https://www.neweconomynyc.org/wp-content/uploads/2014/10/Sample-Cease-Letter-Exempt-Income.pdf

thank you

 

[BackFromTheDebt]

Good golly Miss Molly, that letter is HORRIBLE!  Please try to forget you ever saw it.  

 

Step 1:  Send the letter requesting validation of debt.  That buys you time to plan your next step.

Step 2:  Plan you next step.  A CEASE letter would probably blow up in your face.  Don't do that. You would be forcing them to either walk away or sue.  Your chances of settlement are about nil.  

INSTEAD, prepare proof that you are collection proof.  

As @Clydesmomsaid, there are SOME banks and SOME attorneys who will back off completely after you have submitted this evidence, but there are others who will sue in case they can collect something a number of years in the future.  I used to live in NY, and I believe the interest post judgment is 9% simple (NOT compounded) per annum.  Meaning if they win a $10,000 judgment, they tack on $900 every year.  

Step 3:  Once you have the proof that they cannot collect from you, and you have heard back from them, send it to them.  Ask them politely how they plan to deal with the situation. 

Step 4:  If they are NOT going to just drop if, that is when you can try to negotiate a settlement.  I have heard of cases in which BoA settled for 10%.  It might happen.  

Step 5:  If they plan to sue no matter what, read up on all the laws about making yourself collection proof.  

 

NOTE:  You can find some truly bad advice out there.  Some places will give you advice that will make things much, much worse for you.  You will generally get good advice here.  

Remember, the clock is ticking, but you have time.  You have up to 30 days from when you get the letter to get the response to the lawyer.  (and yes, make sure it is sent certified mail return receipt requested).  You will probably have a few weeks after you get the response to settle the case.  In other words, don't sit back and do nothing, but don't panic.  You have the time to work out your best strategy.

Best of luck to you.  

 

[Jerry Ser]

Thank you for your reply. I have been doing research but I keep asking for ideas. I just found out that in 2015 new rules went into effect in New York State about the debt collection process. The most important seems to me to be something similar to validation (or the same by other wording). It is called SUBSTATIATION.  Here is a link from the NYS website about a sample letter that NYS advises debtors to sent out to collection companies. Please take a look;  it may look like a DEBT VALIDATION to you but you tell me.  https://www.dfs.ny.gov/consumer/debt_collection_letter_substantiation.docx.

Perhaps this is what I will do pending other advice (I have few more weeks time to think about).

thank you

ps my first name they are using is not my legal name.  Ie like someone named Robert or Theodore is Bobby or Teddy. I almost always use my legal name for business/official/ID purposes although in this case I probably did not. Any chances of mentioning this "discrepancy" in a beneficial way?

thank you