debt collection law firm called me... need some legal advice

[The Annoyed Man]

To those who are unflinchingly saying all balances must be squared in every situation. . . just to poke the bear:
Is there ever a time and place for bankruptcy?

The answer is yes, there is a time and place for bankruptcy; but I also said it should be the absolute last resort, and it should be the moral decision. Too often is not the last resort. People don't try all the options before declaring a bankruptcy, and it is therefore not the moral decision. SewTexas made a reference to "the year of jubilee." I actually was thinking about Jubilee in the back of my mind as I was writing my previous post. She said that they filed bankruptcy "at the request of their creditors." If that is what the creditors wanted, then perhaps that was the best solution for them, and it was therefore the moral decision.

I totally get the concept of the year of Jubilee as it was used in this thread. But we have to keep it in its original context to understand it. Jubilee was a religious observance, not a financial transaction. The people of Israel were also told not to charge one another interest on loans, and they were told not to withhold loaning money just because Jubilee was just around the corner and the borrower might not be able to pay it back in time. Israel was also told to live their lives in a way that would carry them through Jubilee without wanting for anything. Jubilee extended to their farming practices and animal husbandry too. They were to grow/raise enough food so that in the Jubilee year, their land—ALL of it—could lie fallow and grow nothing during the Jubilee year, and they did no work. In other words, they were commanded to be good stewards of their assets—because if they didn't do so and they had nothing when Jubilee came, they would starve to death.

So here's what that financial Jubilee would look like today: It's 2013, and Jubilee will be in 2020, seven years from now. You loan me $10,000 in 2013, and I have seven years to pay it back. Whatever is unpaid balance exists in 2020, if any, is forgiven. I pay it all back by 2019, and I come to you to borrow another $10,000. According to God's commandments, you must not withhold the loan because I cannot pay it back in one year. Are you still sure you want to be a lender? The message to me is twofold: 1) it prophesies the statement Jesus makes in the Parable of the Vineyard Workers (Matthew 20:1-16); and 2) neither a lender nor a borrower be.

See? I'm not a bear.

[anygunanywhere]

To those who are unflinchingly saying all balances must be squared in every situation. . . just to poke the bear:
Is there ever a time and place for bankruptcy?

Absolutely. This is how we managed my mother's debt.

In the same vein, my sister should be in prison for stealing over $45,000.00 from my mother. Stealing is stealing.

Anygunanywhere

[RPBrown]

I grew up poor, worked my way through school and became self sufficient by the age of 20. Graduated college at 22.Got married and had 3 wonderful daughters. Then one day, I come home to find the wife and kids gone and divorce papers on the kitchen table. That divorce cost me most everything I had. House, car, ruined credit, and self esteem.

I pulled myself up by the bootstraps, paid off all debt within 5 years (she got the house and the mortgage).

I then bought a modest house, traded in my old junker of a car for a newer truck. Not new but newer. Then all of the other money that I had been paying to the crediters, I started paying to myself so to speak. I would put the money in a savings account until I would have enough to by an IRA. This continued for several years. I got remarried and had 2 more children. My first childred became old enough so I didn't have to pay child support for them any longer so I took that money and put into accounts for them to use while going to college. Things were great, until a few years ago when the stock market crashed.

Fortunatly we were able to get out without loosing everything but still lost a significant portion of our retirement. So, looks like I will be working into my mid 70's instaed of retiring in a couple of years. Now, we have a few credit cards and pay off the balance at the end of the month. We keep them in case of an emergency and they are kept in the safe except for 1 that we each carry. My wife has the newer of our vehicles (2011) and I will buy a new truck when hers is paid off next year. I generally pay cash for all of our toys, be it guns or motorcycles or her crafty stuff. Our house will be paid off next year because we have been doubling up on payments.

The point of this story is, there are ways you can get out of debt without filing bankrupcy. It takes some self regulating and commitment but can be done. Especially now a days when you have companies like CCCA to help. Bankrupcy should be a very last resort.

[bizarrenormality]

Is there ever a time and place for bankruptcy?

Sure but it should stay on their credit record permanently and the creditors should have the right to decide how far back they want to include it in their credit calculations. It's the creditor's money at risk so they should be able to consider it if they want, just like they're free not to consider it if they don't want to.

[RKirkwood]

I agree we need to pay our debts but some people fall on hard times. My father after the divorce ended up with the collectors calling and threatening to a point that I had to use a code to call him on the phone. As a 10year old I didn’t fully understand but I would let the phone ring 3 times them redial and he would answer. It took him a long time to repay everyone. We didn’t have milk in the summer months because we didn’t have a refrigerator and in the winter we could keep it in a closet because 2 walls weren’t well insulated.

The credit problem goes both ways – the company that pass out cards like candy at Halloween and the people who don’t use it responsively. The issue gets worst once the debt is sold off and some collector abuse the debtors.

Give Dave Ramsey a call he has guided many

[fickman]

Anygunanywhere / TAM:


Like a lot of things in this current culture, the theme seems to be an underlying issue of entitlement.

Some people feel entitled to have material things they can't afford, so they go into debt.

Some people feel entitled to dodge paying the debts they've incurred, so they look for escape mechanisms before seriously considering any other options.

In either of these cases, it's the sense of entitlement that rubs us wrong. The haughtiness and lack of stewardship is condemnable.

There are other scenarios where this is not at play, but it's far too common and seemingly becoming normalized.

[fickman]

The message [of the year of jubilee] to me is twofold: 1) it prophesies the statement Jesus makes in the Parable of the Vineyard Workers (Matthew 20:1-16);

Great insight! Did you do that by yourself??? I'm going to think on this as a shadow / type continuity for a little bit. Very interesting thought. I'm extremely familiar with both passages, but I'd never linked them together. Are you sure you're not a Presby???

[The Annoyed Man]

The message [of the year of jubilee] to me is twofold: 1) it prophesies the statement Jesus makes in the Parable of the Vineyard Workers (Matthew 20:1-16);

Great insight! Did you do that by yourself??? I'm going to think on this as a shadow / type continuity for a little bit. Very interesting thought. I'm extremely familiar with both passages, but I'd never linked them together. Are you sure you're not a Presby???

NOPE! I'm just a simple Baptist, and yes I arrived at the insight on my own (well, not strictly on my own....Holy Spirit most certainly had something to do with it ).

It would have probably been as or more accurate for me to say that when Jesus told that parable, he was referencing the year of Jubilee to model the principle explained in the parable—since there is plenty of back and forth mapping between Old and New Testaments. Either way, the connection seems undeniable to me.

[03Lightningrocks]

This part I am sure of. After seven years of inactivity, they drop it off your credit report by law. If they can talk you into making any payment, even a dollar, the period starts over.

There are also ways the collection agencies will try and circumvent the 7 year law by selling your account to a new agency. Those can be beaten if you put effort into it.

This would be the technical answer. The moral factors are a whole different issue and for each person to make for themselves. Unfortunately, it is far easier to take a moral superiority position for some than others, depending on earnings capability and future prospects for the person making the moral choice. For example, should a guy living in a box under the freeway with two bucks give fifty cents of it to a collection agency that is collecting for the doctors office or buy food?

[The Annoyed Man]

For example, should a guy living in a box under the freeway with two bucks give fifty cents of it to a collection agency that is collecting for the doctors office or buy food?

Of course he should buy food. But in real life, I don't think collections agencies are chasing down people who sleep in cardboard boxes under bridges. Now, the actions of a collections agency might put you there, and avoiding that is part of this discussion.....

BTW, I don't claim to be morally superior. I claim to try to be moral. I'm not superior. The fact of the matter is that, while it is true that there are thousands of good honest people who accrue unpayable debt due to life's exigencies, and thousands of others like them who opt for bankruptcy because that is the best decision, we would not be having this discussion at all if it weren't equally true that the system has been collapsed by the dead weight of people who are fundamentally dishonest or feckless, who get themselves into trouble through their own poor decision-making, and walk away from their obligations instead of cowboying up when they were fully capable of digging their way out of it. They just didn't want to. They don't even declare bankruptcy. They just move on. Those kinds of people are a net drain on society.

So, by their immorality, they taint the smaller percentage who are decent honest people who just can't catch a break, and for whom everything goes wrong. We're not having this discussion—and by extension, I'm not arguing my position—because of the good and decent people. We're having it because of the larger percentage who are not. To believe that we do not have a social problem which is more often than not caused by ethical failures is to look the other way and live in denial.

Several people have answered in this thread about their own past difficulties, me included, and their various responses to those difficulties. Those responses run the gamut from "I paid it all off," to "I had to declare bankruptcy." I don't think I've been unfair, and it would be nice to get a little credit for taking genuine hardship (as opposed to "self-made" hardship) into consideration in my answers. As I've said before, I'm not without compassion. I may be comfortable now, but I wasn't always so, and the memories don't just go away. But that doesn't change the fact that intellectual honesty compels me to passionately espouse paying the debt off if there is any way to do it without breaking the law. Note that, at no point have I personally criticized the OP for the difficulties he has had. All I'm saying is that, all too often, people just cave in and walk away when there actually does exist some honorable way of meeting the obligation. If that does not describe anybody in this thread, then what's the big deal? We live in a time when the standard modus operandi for most people when they see too much immorality in so many areas of life is to just give in and surrender to it.....accept it as the "new normal." But if we just accept it as normal, it will never ever get better, will it?

I think most of the respondents here, including those who have had past difficulties, would counsel someone to pay their debt off it is at all possible. That's all I'm advocating.....if it's at all possible, pay it off. If it's not possible, it's not. If it's not, then declare bankruptcy....but not before all the other options have been considered and tried. IF bankruptcy truly is the only resort left, then by all means do it. This is good advice, but it requires simple honesty on the part of the debtor. God is a God of grace, and He has shown much of it to me. I would not withhold my own grace from someone who was legitimately struggling; and I have, on more than one occasion, walked that walk out of my own pocket on behalf of someone else......but I would not do it for someone driving an expensive car who is a perfectly healty shiftless bum who is just plain feckless and doesn't pay his bills. I've met too many like that over the years, and I won't throw good money after bad. Commercial creditors should not have to either.

[03Lightningrocks]

Just to be sure about things. I am not advocating anyone refuse to pay their debt. I have a pretty low tolerance for dead beats. Heck, I get to deal them on occasion while doing business. My point was simply that some folks are in a better situation in life to take the high moral ground than others, so I am hesitant to judge folks for the decisions they make when dealing with collection situations. One could also make a good discussion of who actually is responsible for some situations. Lenders and banks making no doc loans to folks who could never afford the payments is one example. The loans are made because some very greedy broker made a killing taking advantage of a persons desire to have a piece of the "American Dream". I understand the argument that we should all be responsible for our own actions but how does that apply when a person is duped into doing something they later realize was a scam? Many of the people who got sucked into that whole deal were not aware they were getting in over their heads. Some slick broker who knew darned good and well the loan was going to go bad helped to comfort and console them into the loan. If the banks are going to make loans of 250K to a person with a 50K a year salary they deserve to get the loan stuck back up their noses.

[bauer]

If the banks are going to make loans of 250K to a person with a 50K a year salary they deserve to get the loan stuck back up their noses.

Yes and No

While a good dose of karma is fitting for the predatory loan officers/creditors it never truly works out that way. In the end these banks and creditors get bailed out by the federal government in one way or another. Look at the sub prime mortgage fiasco as an example. The actions of these banks and the individuals siging the promissory notes end up affecting the rest of us. It's the people, like you and I, whom work hard for a living and pay our debts and taxes that end up suffering when the federal govt steps in and bails out a bank with our tax dollars.

[Ericstac]

TAM pretty much called me out as a sinner of the Commandments but really all I was doing was offering a different option to the unfortunate OP. When someone says to me they only have a few dollars extra each month and need help I take that as it is and trust they are not lying and there is no way you will be able to repay any large amount of debt with that kind of payment each month. I doubt a consolidating center would even accept a person with that kind of loss. My words were not meant to coherse someone into cheating or being sleazy or whatever is felt toward bankrupt people, they were to take the bad stigma that is typically put on bankruptcy out if it and make it more comforting to know you are not evil if you have to go this route. I was showing how you can come out of it alive successful if you work hard at it, and bankruptcy is hard work.

Even the infamous Dave Ramsey filed in his past. I started listening to Dave nearly 15 years ago and he is a brilliant man and I feel with the few dollars a month extra that is all that's able to repay a very large amount he would tell you to file.

[The Annoyed Man]

TAM pretty much called me out as a sinner of the Commandments but really all I was doing was offering a different option to the unfortunate OP. When someone says to me they only have a few dollars extra each month and need help I take that as it is and trust they are not lying and there is no way you will be able to repay any large amount of debt with that kind of payment each month. I doubt a consolidating center would even accept a person with that kind of loss. My words were not meant to coherse someone into cheating or being sleazy or whatever is felt toward bankrupt people, they were to take the bad stigma that is typically put on bankruptcy out if it and make it more comforting to know you are not evil if you have to go this route. I was showing how you can come out of it alive successful if you work hard at it, and bankruptcy is hard work.

Even the infamous Dave Ramsey filed in his past. I started listening to Dave nearly 15 years ago and he is a brilliant man and I feel with the few dollars a month extra that is all that's able to repay a very large amount he would tell you to file.

Please note, that in that same post, I called myself out as a sinner too. I said:

We have greater unpaid debt because people are unwise. I was unwise.

So if you want to put the discussion in terms of sin.....

...... Jesus told the pharisees who were about to stone adulteress to let the one who is sinless cast the first stone. None could, and (being one with The Father) He knew it. He then told the woman she was forgiven, and to go and sin no more. I make no claim to be sinless, and have consistently said so. I have also advised people to go and sin no more. IF the other person (the lender) has sinned against you, does that make it OK to sin against them?

Honestly, I have difficulty answering that last question because I accept that some collections practices are so predatory that it becomes almost a matter of self-defense. But even Dave Ramsey, who a lot of people in this thread have quoted, and rightly so (I also regard him in high esteem), would tell you to pay your debt if it is at all humanly possible, and to declare bankruptcy only as a last resort. That's a general principle, and I have stated it here repeatedly......as a general principle. That seems to set people off, but I am not going to stop being a messenger for that principle just because it doesn't apply in some individual cases. As a general principle, it is wrong to go about shooting people, but in some very specific kinds of cases, shooting someone is exactly the right thing to do. But we CANNOT claim to be moral people if we live our lives as if we can go about shooting people willy-nilly.

In another thread, the OP posted a story about how he had to draw his gun at 1 a.m. in the parking lot of a topless bar in defense of himself and his drunk friend. He did everything right EXCEPT one: he was found in the parking lot of a topless bar at 1 a.m. He could have avoided the whole thing by not having been there, and the choice to go or not to go to a topless bar with a friend who has a drinking problem and a big mouth is NOTHING like the decision to go to a Wal-mart at 6 p.m. to pick up some items for dinner and some beers. One is a place were decent people are found, the other is a place FULL of people who should know better. A fundamentally poor decision (which the OP in that thread freely admits) resulted in having ultimately to draw his weapon. Since the alcoholic friend just HAD to drink his troubles away, had they gone to Wal-mart instead and picked up some frozen burritos and a 24 pack of beers and went home, the outcome would have likely been much different.

I have repeatedly said these things and drawn these kinds of comparisons. I seek clarity in all things. I have also said that we have a credit/debt crisis in this country. I have said that it takes two to tango. I have conceded that, even so, people make financial decisions which they are able to support at the time, and that their situation may change due to job loss, etc. But none of that changes the fact that there is a huge burden of unpaid debt out there that is carried by creditors and their proxies that was created by a large stratum of people who cheat the system to begin with by buying things on credit which they could not otherwise have afforded EVER, and who do so with no real intention of EVER paying it back.

It's not just a poverty thing.....Sure, I could ask "how many people who live in Section 8 housing have big screen TVs and Play Stations, and $200 sneakers, and big shiny rims on their cars?" But I could also ask "how many people who are living high on the hog one day, fail to put aside funds for a rainy day, refuse to abandon their McMansions and their Corvettes when their financial world comes crashing down, refuse to sell the house before they default and move themselves into less expensive housing, and refuse to trade that Corvette in on a used Honda Civic, and instead they leave the banks holding the bag?"

BOTH are sinful people who are, at the least very unwise, and at the worst very dishonorable. THEY MAKE THINGS WORSE FOR THE REST OF US! If you want to know why collections agencies are so crass and callous in their efforts with decent people, it's because most of the people they deal with are NOT decent people. They don't know you, and their experience tells them that there is a 90% chance that you are NOT a decent person. Their tactics are evolved for dealing with fundamentally indecent people. Maybe that doesn't excuse them, but it surely explains them. I am assuming that the members of this forum, who are all qualified CHL holders, represent a category of persons who are different from that. The very fact that you are a member of this forum means that there is a decent probability that you're not falling into either of those two immoral categories of person.

But other people read these pages, and we're in a culture war, folks! I'm not going to stop posting inconvenient truths, even if they don't apply in the specific cases of members of this forum.

With that said, I'll bow out of this thread. I think this horse has been flogged enough.

[JALLEN]

For years, I have seldom gotten into my car with the radio on without hearing the ad "You have the right to settle your credit card debt for less that you owe."

Being in the debt collection business of sorts for a long time myself (foreclosure trustee among other things) I have seen just about every conceivable maneuvering, from abysmal misfortune to out and out crookedness, blatant dishonesty, as leading to a situation that we became involved in.

Not only to people feel entitled these days, but the government, as always, has put its finger on the scales, so that intelligent thoughtful action and reaction and watching out for one's own best interest are no longer factors. One has to follow "the rules" mandated by government, not the rules of common sense and self-preservation, on either side of the transaction. The more we try to protect people from the impact of their own foolishness, relaxing the old caveat emptor standard, the worse it gets.

In this climate, only the government is dumb enough to make loans.

Bankruptcy used to be a hideous embarrassment, to be avoided at all costs, and something to be ashamed of forever after. Now it is merely another tool of financial planning.