being sued for sears debt

[iadebt]

What is the name of your state? Iowa
I am being sued for a credit card debt. the original line of credit was through sears and i believe it was $1000. due to some unfortunate circumstances involving the untimely loss of a younger brother i neglected to pay on this account. meanwhile i went to college and several years later i find out that sears had been piling on interest and charges to the sum of over $3000. after failing to contact me they turned it over to a law firm who is now suing me for a total of $5100 and some change. i am more than willing to make payments on a settlement but i'm worried because they are asking for an additional 19.8% interest on the settlement after a ruling. i don't make much money and will soon be facing student loan payments also. my questions are; can i negotiate with the law firm about the settlement amount and the interest rate? also, who will determine what kind of payments will be made and what criteria will be used to set that amount? I would like to get this taken care of but i don't want to be paying on this forever. also, how will all of this effect my future credit? am i screwed for life?

 

[cmorris]

When did you last pay on this debt or when was it charged off?

 

[badapple40]

Sears had an obligation, under federal law, to send you monthly statements, unless you moved or otherwise have made it unreasonable for them to do so. They probably sold the bad debt off and now a collection agency is coming after you for the debt. I think you remain liable for the original amount invoiced, but any subsequent interest is invalidated, but don't quote me on it.

I have a case I am handling against sears, the subsequent account purchaser, and a collection agency thats similar to your situation that I left at home, I'll get you specific citations to the appropriate provisions this evening. Initial discovery conducted in the case I am handling reveals that they sold their credit card business off to Citigroup, who then audited their records and found a number of inactive accounts, which they sold for pennies on the dollar to a Texas company -- and they did this with a number of accounts. This is further proof I really need to try and certify a class. Give me a couple hours and I'll get you the specific provisions for your use as a response to the attorneys involved.

 

[iadebt]

more info

i believe the last time i payed on the account was probably 1997 at the latest and it may have been even earlier than that. according to the paperwork i recieved -"the plaintiff demands from you the amount of $3,269.99,plus the following incidental charges: Interest at the rate of 19.8% from august 18,2001 or the date of default to the date suit was filed in the amount of $1,910.44 and costs, plus interest after the judgment at the agreed rate of 19.8%. total amount requested $5,180.43."
i'm sure sears tried to get my attention, but i was at school and any mail i got was just piled at my parents house, also during this time my parents seperated, my younger brother tragically passed away, and my parents ultimately sold the house. i think it was at this time that i completely forgot about the account and i don't believe i ever got any more statements from sears at my dad's new house. i did however get a couple of debt collector letters asking for over $3000 but i wasn't sure if that was correct because i didn't even recall having the account and i certainly never had a line of credit anywhere near that amount. the bottom line was that i didn't have that kind of money anyway so i just ignored it. interestingly enough i know that on atleast one occasion sears actually sent literature to my dad's house announcing that i was a "gold member" or something and had "prefered status" and i even think they offered me another sears card.

 

[cmorris]

Your defense: the SOL expired in 2002! CC's are open accounts.

STATE: IOWA

INTEREST RATE
Legal: 5%
Judgment: 10%

STATUTE OF LIMITATIONS (IN YEARS)
Open Acct.: 5
Written Contract: 10

Source: http://community-2.webtv.net/YCHANGE/STORAGE/page16.html

 

[badapple40]

As promised, look at:

The Federal Fair Debt Billing and Truth in Lending Acts, specifically 15 U.S.C. § 1637 which requires normal billing cycles/statements.

 

[Ladynred]

Oh yeah, this debt is dead and gone. The statute of limitations for legal action to enforce collection on a debt expired 2 years ago. What that means to you NOW in the lawsuit situation is you use the expired 5 year SOL as your affirmative defense, the debt is time-barred. You MUST use that in court, or even in your Answer to the Complaint if you're required to file one. The expired SOL can get the whole case thrown out !

As for Sears - RMA- Risk Management Alternatives - has been the pet collection hound for Sears for years and they are BAD NEWS. Violations of the FDCPA up the wazoo. Sears sold off its credit card division to Citigroup only recently and revised card-holder agreements went out around April of this year. I have a copy of that notice if you don't have one and would like one

 

[racer72]

There is one big caveat that must apply in this case. The Sears credit card is not an unsecured debt like a Visa or MC. Read a Sears credit card agreement. It will state that certain purchases, such as major appliances, professional services, tools, and automotive products, Sears will hold collatoral or lien for the items purchased. Whether the debt is collectible will depend on what was purchased with the card.

Sears is very exact on how they apply the collatoral after they were spanked in federal court a few years ago for claiming lein on items after they had been paid off.

 

[Ladynred]

Racer, not true any more. When Citi took over the Sears accounts, they DELETED the secured interest portion of the agreement. They NO LONGER hold ANY security interest in anything you got on the Sears card. I have that exact paper from Citi/Sears when they sent out the revised card agreements.

 

[bigun]

Here's how a fellow Iowian mounted an SOL defense.

http://community-2.webtv.net/YCHANGE/STORAGE/page19.html

Here's more info on the SOL defense.

http://community-2.webtv.net/YCHANGE/STORAGE/page2.html

 

[DerbyGirl]

Just out of couriosity, when you went away to school, was it in state (IA) or out of state?

DG

 

[jjilli]

SOL start date

when exactly do SOL's start? Is this the last date a payment was made?

 

[bigun]

Typically, the SOL will begin when you first went into continious default.

 

[iadebt]

how do i find out when it was considered default?

ok to answer- i went to school in iowa, never left.

the sol defense seems good but how do i find out the official start/end of the sol in my particular case? the papers i have recieved and transcribed earlier (more info) refer to a date of august 18, 2001. are they implying that 2001 was the beginning of the default period and thus the beginning of the sol? because i believe that date refers to when Great Seneca Financial Corp. took over the collections on this account. furthermore the fact that the amount of 3269.99 is 3 times the original line of credit would imply that the account had been default for a long time wouldn't it? i just want to make sure that the sol is up before i claim that it is.

 

[deejacks]

state : florida
I am currently being sued for a sears debt also, and the actt was closed in 97 but a lawyers office took over the act and took it to court and was awarded a judgement in august of last year,they also got a court order to seize funds in my banking actt ,in august of last year ,now they have sent me a questionare about current earnings and property holdings i or my spouse may hold.is there anything i can do about this ? is there also a sol in florida concerning this type of debt,what should i do? any help would be appreciated since i currently cant afford to pay them what their demanding.