Please clear something up for me

[Sue-Z-Que]

What is the name of your state? GA

I have found a lot of conflicting information. Is the SOL for bank credit card debt the 4 year open contract or the 6 year written contract? If it is the 6 year written does anyone know if the debt buyer will have to provide a signed document if we ask for it either in or out of court?

TIA.

[Debt Guy]

There is considerable debate whether a credit card is a written agreement or an open account.

The Truth in Lending Act seems to be the common catalyst for people’s belief that a credit card is an open account. The TILA does not mention "open accounts", and its applicability to such would to me be very questionable. What it does refer to is "open end" credit. An "open end" and an "open account" are not the same. Unfortunately, because of similar names and the word "open" being included in both, most people assume they mean the same thing; they don't. While credit cards are "open end" accounts, they are rarely considered "open accounts." However, some store charge cards can be considered open accounts, but a "charge" card is different than a "credit" card. This can get confusing -- a Sears VISA used only at Sears could be determined to be a store charge card -- but a Sears VISA used at Home Depot is arguably a bank credit card.

There is little law on this subject and it is not entirely clear which statute of limitations should apply to a credit card debt. In situations in which the financing is provided by the merchant, then the “open account” statute of limitations should apply because the transaction is one for the sale of goods and the financing aspect is merely a portion of that arrangement. Citizen's Nat'l Bank of Decatur v. Farmer, 395 N.E.2d 1121, 1123, 77 Ill. App. 3d 56, 32 Ill. Dec. 740 (4th Dist. 1979). However, if the financing is provided by a third party, then the suit is one based on the written contract to provide credit …. Harris Trust & Savings Bank v. McCray, 316 N.E.2d 209, 210-11, 21 Ill. App. 3d 605 (1st Dist. 1974).

In my opinion, in situations in which the financing is provided by the merchant, then the “open account” statute of limitations should apply because the transaction is one for the sale of goods and the financing aspect is merely a portion of that arrangement. However, if a third party provides the financing (like a bank card), then the suit is one based on the written contract to provide credit.

More and more it seems that judges in a number of states are persuaded by the argument that a bank credit card is not the same as a store charge card. As a result, judges seem to be taking the view that credit cards are written agreements.

I am personally aware that judges in IL, FL, OK and AZ are ruling that credit cards are written agreements. VA is the only state I am aware of where a judge has ruled a credit card to be an open account.

[Ladynred]

Judges in GA are agreeing with the shorter 4 year SOL on credit cards. There have been enough people using the 4 year SOL when sued and they are prevailing.

[inatightspot]

I'm in Alabama


I have had conflicting things told to me on this by a number of Attorney's. A few say its a written or oral others say it's an open end account. I hate to file a SOL which is 3 years in Alabama, then only to find that the Judge says it's a written or oral contract and be out all the extra fees.

I am in the process of settle with on CC company but I have several others on my credit report that I am afraid they will be coming after me soon. Most are on the bubble of the 3 year SOL.

But if it is indeed 6 years, they still have plenty of time to catch up to me. I would pay if I had a job again and had the money, but it's just not there right now. I have equity in my house approx 20,000 and Alabama only has a 5,000 home exemption.


One question I have is, after I settle with one and pay it off will the others see this on my credit report and come sooner?

Can they force me into BR and force me to sell the house?

I recieved a letter from a CA attorney (Curtis O Barnes, PC) on an old Providian account, saying their client has bought the debt on a noon-performing portfolio and Providian no longer has any interest in it. They are past the 3 year SOL and they are demanding payment for their client. (Consumer solutions)

Should I respond to it? Where do I go from here? If I could buy myself a little time I should be back on my feet by the end of this year. My brother and I have started an LLC and hope to do very well in at which time I will call them and try to settle.

That leads to one more question.

Can they touch the LLC with my name being on it?

Thanks for all your help this forum has been a good resource for me. Everyones time and input into others problems is greatly apprciated.

[Ladynred]

after I settle with one and pay it off will the others see this on my credit report and come sooner?

It is highly likely, yes. Like sharks smell blood in the water, collectors smell money and it will certainly look to them like you have money to pay up.

Can they force me into BR and force me to sell the house?

No and no. No one can FORCE you into bankruptcy (well.. only rarely with an involuntary petition).

They are past the 3 year SOL and they are demanding payment for their client. (Consumer solutions).Should I respond to it?

Yes, tell them to get stuffed, the debt is time-barred.

Can they touch the LLC with my name being on it?

It's possible, but then I don't know much about the particulars of LLC's

[Debt Guy]

Well, you have a perfect example of the frustration and problem with confusion over whether a credit card is an open account or a written agreement -- even lawyers cannot agree. Until someone can show me a court case, my opinion is that credit cards are written agreements for the reason I articulated in my response to the OP.

I know absolutely nothing about what judges in AL are doing. While there are some states where judges are saying credit cards are open accounts, most states are going the other way.

Personally, I would go ahead and try to assert the SOL defense if you are sued. If the judge goes against you, oh well. You have not lost much. You should not need to hire an attorney for this provided you are willing to put some effort into teaching yourself how to file the response pro se (latin term meaning "for myself")

As to your questions:

Q. after I settle with one and pay it off will the others see this on my credit report and come sooner?

A. Yes, most likely. Most creditors monitor credit reports. More and more, creditors subscribe to automated services that tell them when there is a significant event on a credit report.

Q. Can they force me into BR

A. By BR, I assume you mean bankruptcy. The common abbreviation is BK. Can they force you? No, not in any practical sense. There is such a thing as an involuntary bankruptcy but I have not seen one in years. Whether or not to file is your choice. Your decision whether or not to file will be after weighing the pros and cons of the BK. They can force you to make a decision but they really cannot force you to file.

Q. and force me to sell the house?

A. Generally, no. Most states do not allow a judgment creditor to foreclose. What typically happens is the judgment attaches to the property and must be dealt with before you can sell the home or refinance the home.

Q. I recieved a letter from a CA attorney (Curtis O Barnes, PC) on an old Providian account, saying their client has bought the debt on a noon-performing portfolio and Providian no longer has any interest in it.

A. Very common.

Q. They are past the 3 year SOL and they are demanding payment for their client. (Consumer solutions)

A. That is their job.

Q. Should I respond to it? Where do I go from here?

A. Technically, you have the right to demand the debt be validated -- google FDCPA and read it. That might buy you a little time. A different strategy would be to play bluff with them and just assume the SOL is 3 years. In that case, send them a letter and say the debt is time-barred and they must cease and desist all contact and all effort to collect the debt. This strategy really draws the line in the sand. You are essentially spitting in their eye. You might get sued. If so, you will need to defend yourself.

Q. Can they touch the LLC with my name being on it?

A. Your interest in the LLC is an asset. That means it is subject to attachment and/or seizure under the laws of your state. I am not aware of any state that exempts an investment of that nature. So, yes if they find out.

Something to think about. I assume you are married and assume your home is owned jointly with your wife. If your wife is not a co-borrower on any of these debts, you should discuss with a bankruptcy lawyer the idea of you filing bankruptcy by yourself. Your wife would not file. In some states, the homestead equity is "protected" by the interest of the non-filing spouse. This is very technical and you should not ask strangers on the internet what to do. Talk to a local bankruptcy lawyer as they will know how state law applies in this case.

Good luck.


NOTE TO LNR -- did not realize we where both posting at the same time but I am glad to see that we both gave the same advice with the exception of the open account/written agreement issue on which we almost always disagree