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Bank deducted money from checking account on credit card debt after sol expired


Shawn H
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I last paid on my card debt in 2016 and WF closed the card account in 2017. it has since been charged off and sold to a 3rd party. The sol has passed and recently the bank just grabbed a couple hundred $ from my checking account calling it "Legal Recovery", but refusing to say under what authority or legal action it acted and refused to tell me why. Then I saw on my report that they claimed I made a payment on the expired and closed, charged off account! Is that legal? Wouldn't this restart the sol? I made no payment and when I asked them they finally admitted taking the money for the card debt and said they gave it to the collection agency who made a payment for me! This cant be legal. I need advice, please.

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2 hours ago, Shawn H said:

I last paid on my card debt in 2016 and WF closed the card account in 2017. it has since been charged off and sold to a 3rd party. The sol has passed and recently the bank just grabbed a couple hundred $ from my checking account calling it "Legal Recovery", but refusing to say under what authority or legal action it acted and refused to tell me why. Then I saw on my report that they claimed I made a payment on the expired and closed, charged off account! Is that legal? Wouldn't this restart the sol? I made no payment and when I asked them they finally admitted taking the money for the card debt and said they gave it to the collection agency who made a payment for me! This cant be legal. I need advice, please.

You need to check with your county court to see if you were sued and there’s a judgment against you for the debt.  

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There must be a judgement. If the JDB has paid on the account restarting the tolled statute you have recourse. I'd consult with an attorney.

https://www.consumerfinancemonitor.com/2018/09/18/california-enacts-additional-limits-on-collecting-time-barred-debts/

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB1526

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Is the account that WF took the money from also a WF account. Many banks have in their contracts that they can do that to legally offset any debts owed to the bank.

If the money is not in a WF account, then they had to have sued you at some point and gotten a judgement and you need to look into it at your county courts (or any other county court where you may have lived in the past 6 years).

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So there you have it. Since you are in California, and not Mississippi or Wisconsin:
 

1.  Was the account in the same bank as the debt?  If so, this might be okay. If not, go to step 2.  

 

2.  Is there a judgement against you?  If so, probably legal. If not, step 3.

 

3.  Find a good consumer attorney.  

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3 hours ago, HueyPilot said:

Controversial opinion on California time barred debt:

http://www.ellislawgrp.com/article05time.html

This would have been better in another discussion but it looks like that Federal law would apply if the state does not provide the protection (as in any other case where there is no state protections, the federal law would apply).

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  • 1 month later...

That opinion is an oldie but a goodie - looks to have been written 20 years ago - there may have been case law regarding collecting SOL debt in California since this was written. 😃  

My interest in this is due to the negative items on my CRA approaching the 4.5 year date they will become time-barred. Everything I have read seems to agree that there was an additional 6 months added to the statute of limitations on collections due to COVID... I'm keeping my head down for 4 years 7 months :) - C'mon December!

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On 11/24/2021 at 9:33 PM, Uncle Reggie said:

That opinion is an oldie but a goodie - looks to have been written 20 years ago - there may have been case law regarding collecting SOL debt in California since this was written. 😃  

My interest in this is due to the negative items on my CRA approaching the 4.5 year date they will become time-barred. Everything I have read seems to agree that there was an additional 6 months added to the statute of limitations on collections due to COVID... I'm keeping my head down for 4 years 7 months :) - C'mon December!

According to the 9th Circuit Court of Appeals, filing a lawsuit on a time-barred debt violates the FDCPA.

https://scholar.google.com/scholar_case?case=10211426097127082895&q=“FDCPA”+AND+“time+barred+debt”+AND+“a+lawsuit”&hl=en&scisbd=2&as_sdt=4,5,114,129,321,322,323,324

In regard to collection attempts on a time-barred debt that is still within the 7-year credit reporting period, the California Rosenthal Act requires debt collectors to include “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it. If you do not pay the debt, [insert name of debt collector] may [continue to] report it to the credit reporting agencies as unpaid for as long as the law permits this reporting.”

If a collector does not include something to that effect when collecting a time-barred debt, it violates both the Rosenthal Act and the FDCPA.

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