My wife's debts

[Sebin]

What is the name of your state? North Carolina

My wife has debts with credit cards for around 3500 dollars accumulated until the end of 2003, and a number of problems that is not worth going over prevented her from paying them. Those debts are in the stage of collection agencies, but she still doesn't have a way to pay them, and neither do I because we are very poor. I'm not trying to create any sympathy with this, but it's just the way it is.

I would like to know what is the real legal power these collection agencies have besides sending you letters requiring you to pay. My wife has one car which has a lean on it, so they couldn't repossess that, she has no other assetts such as a property, but I was wondering, can the bank reposess valuables that we have such as a TV, computer, and a few other electronics? I mean, even though they were not bought with any of those credit cards?

In other words, can banks and collection agencies legally take away your posessions other than house or car for owing a little over a 1000 dollars to each of them?

And finally, can my wife be sued for these debts, even though they are not much more than a 1000 dollars each? I mean, wouldn't the cost of the lawyers be much more than that and therefore make the trial a loss for the banks?

Thanks,

Sebin

[olgethorpe]

To answer your last question first, yes, the credit card companies and/or the collection agencies may sue for as little as $1000. If the CC company has charged off the debt, they may sell it to a collector for pennies on the dollar. That may make it worthwhile for the collector to sue. But remember, until they do take you to court AND WIN they cannot take your car, your house, or your wages...so don't let them intimidate you into sending them money. The can't do squat without a court judgement, and even then you have other options.

Will they sue? Hard to tell. But, unless they do, there isn't much they can do to you other than make your life miserable with their phone calls and letters. And, there are ways to combat that....go look at the discussions at

[url]www.creditinfocenter.com[/url]
[url]www.creditboards.com[/url]

for ideas on what you can do. And remember, while you WERE indeed morally and legally responsible for paying the credit card companies once they have "charged off" the debt, the American Taxpayer has compensated them for their loss. You're under no moral obligation to the collections agency.

[Sebin]

Thanks a lot for your advice. One thing I don't understand though, is this:

Originally Posted by olgethorpe

If the CC company has charged off the debt, they may sell it to a collector for pennies on the dollar. That may make it worthwhile for the collector to sue.

The bank can sell your debt to a collector? How is that legal? I mean, you have a debt with the bank, not some collection agency. How can a company with which you didn't incur in any debt with sue you or even try to collect money from you if it's not representing the original creditor but itself instead? But also, if the creditor sold the debt to a collection agency, if the collection agency collects the debt, does the original creditor get the money at all? Or does the collection agency keep it all?

Thanks,

Sebin

[Ladynred]

The bank can sell your debt to a collector? How is that legal? I mean, you have a debt with the bank, not some collection agency.

That is correct and it IS legal - and the way of the credit world of delinquent debts. In your credit card agreement is a section on default and assignment of the account for collection purposes.

Granted, you didn't incur the debt with the collection agency, but by buying the paper (your bad debt), they become the owner of it and can collect on it. They buy portfolios of thousands of accounts for mere pennies (or less) on the dollar.

Once the original creditor sells the debt to a CA, they wriite it off their books, take their tax writeoff and forget about you. Now the CA owns the debt and they can collect and they can sue. The original creditor gets nothing more for the debt, the CA bought it, they get all the profits.

NC does not allow wage garnishment, so wages are safe. All states have exemptions from judgments that protects a certain amount of personal property, so 99.9% sure you wouldn't lose a thing if they won a lawsuit.

If any of your wifes creditors are Discover, or Capitol 1, they do sue for virtually ANY amount. Unfortuantely there's no way to predict it they will in every case.