Frequently Asked Questions
Bank Accounts
-
Can collectors withdraw funds from my bank account without my approval?
Although unethical collectors (yes, there are ethical collectors out there) threaten to take your money, doing so without your permission requires a court order!
However, it happens more often than people realize. When it does happen, you're dealing with an unethical collector who uses a variety of methods to steal your money. Some of their favorite methods include getting you to authorize post-dated checks or automatic account withdrawals and then withdrawing more than you authorized.
You have certain rights and protections when money is taken out of your account without your permission. Check with your bank and your state's banking authority for the specific rules and rights in your state.
[Back to top] -
What about unauthorized Electronic Funds Transfers (EFT)?
Liability for an unauthorized withdrawal is limited to $50 if you notify the financial institution within two business days after learning of the unauthorized withdrawal.
WARNING! You could lose as much as $500 if you do not tell the bank within two business days after learning of the withdrawal.
Additionally, if you do not report an unauthorized transfer that appears on your statement within 60 days after the statement is mailed to you, you risk unlimited loss on transfers made after the 60-day period. That means you could lose all the money in your account plus your maximum overdraft line of credit.
[Back to top]
Checks
-
Do bad checks have a statutes of limitation?
First, we need to be clear on the difference between a "bad check" and a check written with the "intent to defraud".
In simple terms, a bad check is usually the result of poor math calculations or your bank making a miscalculation. In either case, your intentions were good when you wrote the check. You thought you had enough money to cover the check and can show where the mistake was made thus proving your good intentions. Crooks, on the other hand, write bad checks with the intention of ripping people off. Writing checks when you know you do not have the money to cover them is a serious crime that, if caught, can land you in jail or even prison.
Make no mistake about it, writing bad checks is always illegal. However, just about every state has a statute of limitations (SoL) on the collection of bad checks; typically 2 or 3 years. If you receive a collection notice or call about a bad check, don't panic! First, check to see if the Statute of Limitations has expired.
Next, decide whether you want (or can afford) to pay the debt. If you plan to pay the debt, be sure that you are only paying what state law allows. Check your state law to determine what fee(s) (if any) collectors can add to the face value of the check. Many states limit collection fees to a certain amount such as $100 or to a percentage of the face value of the check and prohibit interest charges.
The FDCPA, Section 808 makes it an unfair practice to collect "any amount (including any interest, fee, charge or expense . . .) unless such an amount is expressly authorized by the agreement creating the debt or permitted by State law."
Debt collectors may attempt to collect a fee or charge in addition to the debt if either:
(A) the charge is expressly provided for in the contract creating the debt and the charge is not prohibited by state law, or
(B) the contract is silent but the charge is otherwise expressly permitted by state law.
Conversely, debt collectors may not collect an additional amount if either:
(A) state law expressly prohibits collection of the amount or;
(B) the contract does not provide for collection of the amount and state law is silent.
NOTE: If state law permits collection of reasonable fees, the reasonableness (and consequential legality) of these fees is determined by state law. So, unpaid debts sent to collection agencies, whether closed or charged off MAY still accrue charges and fees IF the credit contract allows it and State law does not prohibit it. Many states do limit the amount that can be charged and, if the State does have a law, it overrules the credit contract.
Cancelled Checks: When you write a check, it's like writing a promissory note that says the funds are available and when the instrument (in this case a check) is presented to your bank, funds will be withdrawn from your account to cover the amount of the check. When this happens, the debt is, in effect cancelled, thus the term "cancelled check".
However, the same term can also be used when you cancel a check. For instance, after sending a check, you change your mind, you can ask your bank to cancel (stop payment) on the check. This means the bank will not honor the check if presented. Banks usually charge a fee for this service.
[Back to top] -
What are the
According to the Uniform Commercial Code Section 4-403(a), an oral stop payment order is binding on the bank for 14 calendar days. Section 4-403(b) says that if you confirm the stop payment order in writing within the fourteen days, the order is binding for 6 months and may be renewed in writing for another 6 months.
Pre-authorized transfers: Up to 3 business days before the transfer is scheduled to occur, the consumer can stop payment by notifying the bank orally or in writing.
[Back to top]
Child Support
-
Where can I find information about collecting past due child support?
Please visit...
Child Support Collections.com
[Back to top]
Credit Cards
-
If I use my personal credit card for business purposes, am I protected by the FDCPA?
I'm often been asked by small business owners who use credit cards to finance their business if their credit card debt is considered business debt or personal debt.
The answer is complicated and depends on state and federal laws and on how you're business is structured.
Credit cards issued to an individual who then chooses to use the personal card to finance a business may not be protected under the FDCPA if the charges are primarily for business expenses rather than for personal, family, or household purposes.
Use personal credit cards with caution when financing a business.
Finally, always consult an attorney well versed in business and credit law to be sure of your status!
[Back to top]
Credit Reports
-
A collection agency just pulled my credit bureau report for a cc debt that is 16 years old. The SOL has expired and the debt has been off my credit report for years. So, is it legal for this 3rd party collection agency to access to my credit report?
Believe it or not the answer is yes.
Although the debt has
expired, this only prevents collectors from using the courts to
enforce the collection of the debt. They still have the right to
try and collect old debts; even 16 year old debts.
This also means they have a "legitimate business reason" to pull your report.
Now, protect yourself by ensuring this debt does not end up on
your credit reports again.
Many collectors report old debts to credit
bureaus as if they are a new debt. Credit bureaus don't bother
checking the validity of the report because the FCRA says the
person or agency reporting the debt must ensure its accuracy.
If it shows up, be prepared to dispute the item right away using
the information on my free site here...
Fair Credit Reporting.com
[Back to top] -
Can debt collectors legally request copies of my credit reports?
Yes, debt collectors can legally check credit reports!
When you sign credit agreements such as mortgages, credit cards, auto loans and so forth, you also agree to allow the creditor (and its designated representatives) to pull credit reports on you anytime they feel it's necessary.
This means they can pull your report periodically and most do. Some pull reports monthly, others quarterly and some only annually.
Two very common reasons for pulling credit reports are late payments and collection actions. In the case of late payments on credit cards, you can expect your creditor to not only pull your credit report, you can expect them to raise your interest rate. This happens thousands of times a day!
When your past due account is sent to collections, so does the right to pull your credit report. Thus, according to the Fair Credit Reporting Act, collectors have a legitimate business reason to review your credit report.
[Back to top] -
Where can I find information about my credit reports and improving my score?
Please visit my free site here...
Fair Credit Reporting.com
[Back to top]
Creditors
-
Are creditors required to notify me before turning a delinquent account over to collections?
The Truth in Lending Act and the Uniformed Commercial Code (UCC) requires any credit contract to come with a full disclosure statement that clearly spells out the terms of the contract. Many states also have consumer laws that speak to full disclosure.
Look at your credit disclosure statement for words similar to these:
"If I fail to pay the amount that you think I owe, you may report me as delinquent and send the account for collection action."
Since you agreed to credit terms that included the above statement, most creditors send monthly statements with an "amount due" highlighted somehow. When your account is delinquent, and your regular statement shows the past due amount, consider yourself notified!
Many creditors, as a courtesy, send a reminder or two of the past due debt and include a note that says the account will be sent to collections if you do not pay by a certain date.
Bottom line: Creditors do NOT always have to send a separate notice or call you before sending a delinquent account to collections.
This includes co-signed credit contracts as well. If the primary borrower defaults, the account can be immediately sent to collections without notifying the co-signer. An exception to this would be if the disclosure statement calls for the creditor to notify the co-signer.
If you plan to co-sign for a loan, make sure the terms of agreement include notifying you before the account is sent to collections.
[Back to top] -
What is re-aging a debt?
Re-aging credit card debt and other past due accounts resets the clock and gives you a fresh start!
Reaging a past-due account means your creditor sets the account due date back to current. Let's say you are 5 months behind on your credit card bill and your creditor agrees to reage your account thus wiping out those 5 months!
Sounds great and it is possible to have your accounts re-aged but not all creditors are willing to do so, and they must follow federal guidelines when deciding whether or not to reage your accounts.
Creditors may only re-age your account once in a 12-month period and twice in a five-year period for open-ended accounts (credit cards, charge cards, store cards etc.).
To be considered for re-aging:
You must demonstrate a renewed willingness and ability to pay;
Your credit card account should be at least 9 months old;
You need to make at least three consecutive minimum monthly payments;
Creditors DO NOT have to reage past due accounts.
Some creditors never re-age accounts, some will only reage an account one time and other creditors follow the federal guidelines that allow once in a 12-month period or twice every five years. It simply depends on the creditor's reaging policy.
Some creditors will re-age past due accounts if you agree to enter a debt-workout program or debt-management plan.
Once enrolled in a debt-management program, creditors typically charge lower interest rates, stop charging late fees and re-age the account, bring it current.
Be careful! Only sign up with a debt management company that you can trust. There are thousands of credit-counseling and debt-consolidation companies looking to make a quick buck by preying on stressed-out, financially vulnerable consumers.
Some companies are guilty of shoddy service and sky-high fees and others are huge scams.
I recommend Moneynest's debt management program because, after 6 years of recommending them, I've never received a single complaint. They offer a FREE debt analysis and Quote without any obligation.
Don't ask for re-aging if you will not be able to keep up with the payments. In other words, don't waste your reaging opportunity! It's better to wait until you can truly keep up the payments before approaching your creditors and asking them to re-age your account.
When asking creditors to reage your accounts, be sure to get it in writing! If your creditor won't put the details of your re-aging program in writing, do it yourself. Keep a record of the conversation and send a copy of it to your creditor (keep a copy for yourself).
Moneynest Debt Analysis
[Back to top]
Death and Debts
-
When someone dies and leaves behind several debts, who is responsible for paying these debts?
Whenever someone dies and leaves debts behind, a designated person (called an executor or administrator) handles the estate. If the deceased person did not have a will and was married, then, in many states the spouse automatically assumes responsibility (but not always) for the estate and, becomes responsible for paying off the debts on his or her own.
If the deceased person did not have a will and did not have a living spouse, then usually a close relative (son, daughter, mother, father, or a grandparent) is appointed as the executor of the estate according to state law. If there are no relatives, the state appoints an executor.
Even when an estate is worthless, the executor must still notify all creditors of the death. Debts from a worthless estate are generally charged off and no future collection actions are taken. However, as stated earlier, in some states a living spouse can still be held responsible for paying off the debts of their deceased spouse.
Always check your state laws and always consult with a probate attorney.
When the estate is worth something, the debts must be satisfied according to federal and state priority. For instance, debts owed to the federal government take first priority and then state governments debts and after that, it depends on the types of debts and whether or not there is a will. Assuming there is a will, its instructions are followed and then comes secured debts, liens, judgments and finally unsecured debts. Here are two relevant excerpts from federal code...
"Section 3466 provides: 'Whenever any person indebted to the United States is insolvent, or whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied; and the priority hereby established shall extend as well to cases in which a debtor, not having sufficient property to pay all his debts, makes a voluntary assignment thereof, or in which the estate and effects of an absconding, concealed, or absent debtor are attached by process of law, as to cases in which an act of bankruptcy is committed.' "
"Section 3467 (Comp. St. 6373) provides: 'Every executor, administrator, or assignee, or other person, who pays any debt due by the person or estate from whom or for which he acts, before he satisfies and pays the debts due to the United States from such person or estate, shall become answerable in his own person and estate for the debts so due to [269 U.S. 483, 487] the United States, or for so much thereof as may remain due and unpaid.' "
Need a Lawyer? LegalMatch allows you to present your case, and respond only to attorneys who want to help you. It's Free & Confidential.
[Back to top]
Debt Collection
-
A collection agency recently told me that they could contact all of my creditors to whom I owe money and then contact the bankruptcy court to have my assets seized and sold to satisfy the debts. Can they do this? I have not filed for Bankruptcy.
You didn't mention what the debts are so I'll assume you have
some secured and unsecured debt.
The collection agency not only lied to you, they used an illegal
threat (calling 3rd parties and the bankruptcy court) Begin
recording all calls to protect yourself in the future and report
their activity to your state attorney general.
For secured debt, the creditor is the only one who can seize the
item (car, boat, TV, house etc). In the case of a home, the creditor must go through foreclosure proceedings.
For unsecured debt, only IF you file bankruptcy, does the
bankruptcy court become involved. Then, unsecured creditors can ask the bankruptcy court to force
you to file a chapter 7, if they don't want to accept your
chapter 13 terms. The courts don't always support the creditorrs' requests.
Collectors have no say in bankruptcy
proceedings unless they hold a judgment against you. To do that,
they have to own the debt and then convince a court to grant a
judgment.
See my site for
more info on default judgments.
[Back to top] -
Are attorneys subject to the FDCPA?
An attorney whose practice is limited to legal activities (e.g., the filing and prosecution of lawsuits to reduce debts to judgments) are not considered debt collection attorneys and therefore not subject to the FDCPA.
On the other hand, debt collection attorneys and lawyers who use general and specific debt collection tactics such as sending dunning notices, (debt collection letters) and making phone calls are accountable under the Fair Debt Collection Practices Act (FDCPA).
Don't be intimidated by letters and phone calls from debt collection attorneys. They must adhere to the FDCPA rules and, when they violate the law, can be sued just like any other collector.
[Back to top] -
Are business debts covered under the Fair Debt Collection Practices Act (FDCPA)?
The FDCPA only offers protection to consumers for private debts. Here is the specific wording from the FDCPA:
" Any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which, are the subject of the transaction, are primarily for personal, family, or household purposes."
Some examples of consumer debts are auto loans; medical expenses; charge cards, credit cards, mortgages, personal loans and so forth.
Many other laws pertain to commercial and business debts. To attempt to list them all is beyond the scope of this site. However, I suggest you start with the Uniformed Commercial Code and then look for state and federal laws concerning international and interstate commerce.
[Back to top] -
Are charged off debts still collectable?
Charged off debts are still collectible...even years later!
The IRS allows creditors to charge off debts that have become worthless. The rule is called the "Specific Charge-Off Method". In a nutshell, this rule allows creditors to take a loss on their income taxes when a debt they are trying to collect becomes worthless. Companies do not actually have to go to court to prove the debt is uncollectible and they can still try to collect the debt at a later date. If they are successful in collecting the debt (or any part thereof) they must claim it on their tax return in the year collected.
Quite often, creditors sell accounts they deem worthless (or not worth their time and expense) to third party debt collection agencies called Junk Debt Buyers.
When creditors sell an account, they sell all rights to the account as well so only the new legal owner of the account can collect the debt.
Once a company decides to charge off a debt they are required to report that information to a credit bureau within 90 days of the debt's charged off date.
Finally, although debts expire, collectors still have the right to try and collect on old debts. (see statute of limitations for more info)
[Back to top] -
Can collection agencies add or charge interest?
Interest on Debts when no judgment exists!
Section 808(1) prohibits debt collectors from collecting any amount unless the amount is expressly authorized by the agreement creating the debt or is permitted by law.
For purposes of this section, "amount" includes not only the debt, but also any incidental charges, such as collection [53 Fed. Reg. 50108] charges, interest, service charges, late fees, and bad check handling charges.
808(2) Legality of charges. A debt collector may attempt to collect a fee or charge in addition to the debt if either:
(a) the charge is expressly provided for in the contract creating the debt and the charge is not prohibited by state law, or
(b) the contract is silent but the charge is otherwise expressly permitted by state law.
Conversely, a debt collector may not collect an additional amount if either:
(a) state law expressly prohibits collection of the amount or
(b) the contract does not provide for collection of the amount and state law is silent.
808(3). If state law permits collection of reasonable fees, the reasonableness (and consequential legality) of these fees is determined by state law.
808(4). A debt collector may establish an "agreement" without a written contract. For example, he may collect a service charge on a dishonored check based on a posted sign on the merchant's premises allowing such a charge, if he can demonstrate that the consumer knew of the charge.
[Back to top] -
Can collection agencies charge interest on old debts?
Please see my in-depth answer here...
http://www.fair-debt-collection.com/searches/interest-on-debt.html
[Back to top] -
Can collection agencies charge interest on old debts?
According to the FDCPA, interest, fees and other charges can only be added if the original credit agreement allows it and state law does not prohibit it.
Please see my in-depth answer here...
Back to top]
-
Can collectors call my spouse and discuss my debts?
According to the FDCPA, section 805(d); debt collectors can legally discuss the details of your debts with your spouse even if the debt existed prior to the marriage or the spouse is not on the credit contract.
The same rule applies to minors (less than 18 years old), to a guardian, executor, and parents.
See this page for more info...
Collection Calls
[Back to top] -
Can collectors discuss my debts with my minor children?
For our purposes here, we'll define minor as people that have not reached their 18th birthday.
There is absolutely no reason for collectors to even talk with a minor AND collectors are prohibited from discussing your debt or anything about your account with unauthorized third parties. They are also prohibited from using any threats or abusive language.
Regardless of the status of your account, DO NOT let collectors harass your children or any other minor.
Immediately report illegal behavior to your state attorney general and the FTC. Use the attorney-general link below to locate yours and then file a formal complaint.
While you're on the phone or the web site, ask if they can offer any assistance such as calling or sending the collector a written warning to stop harassing you and your children. Also ask for a reference to any state laws that offer protection from harassment.
Attorney General List of Websites
[Back to top] -
Can collectors refuse to give you (or agree to) a reasonable payment plan?
There is no law compelling collectors, who own the debt, to agree to any payment plan!
Don't believe the myth that collectors, who refuse payments, forfeit their right to collect the debt and that the debt goes away. This is just not true!
Under those circumstances where collectors are working on behalf of a creditor, the collector is obligated to submit all reasonable offers to the creditor. In this case, only the creditor, has the right to refuse your payment offer.
Collectors who own debts can refuse your payment plan (and they usually do). However, collectors who refuse reasonable payment plans run the risk of losing their case should they pursue court action.
This is why it's so important to put payment offers in writing and keep accurate records of all efforts to resolve the issue.
[Back to top] -
Can debt collectors demand that I tell them my social security number?
Collectors can demand that you tell them your social security number all day long; nothing illegal about that!
However, the better question is, "Do I have to reveal my social security number when collectors call?"
Collectors spend a great deal of time trying to find debtors. This means they may call 30 people with the same last name before they find the actual debtor. In order to "control the ball" from the very beginning of the call, collectors will demand that you comply with their orders. They'll demand that you confirm information such as your name, address and social security number.
There is no law compelling you to reveal your personal information to collectors or any other strangers who call you. The best approach is to recognize the collector's demand for what it is and then firmly respond with:
"I don't reveal personal information to strangers however, if you care read off the information you have, I'll be happy to confirm whether or not your information is correct."
No matter what the collector says, DO NOT give out your personal information, especially your social security number. After all, the caller may not be a collector but a scam artists trying to trick you into giving out your personal information.
By having collectors (or whoever is calling) read off the information they have, you control the ball and protect yourself in the process. If the social security number they read off is correct, confirm it. It it's wrong, say they have the wrong person and terminate the call.
[Back to top] -
How do I stop collection calls or dispute debts?
Please see this page for in-depth information...
Disputing Debt Collections
[Back to top] -
I have delinquent credit cards that I got while I lived in Oregon. I have since moved to Arkansas. Which states' statute of limitations applies to these cards?
Because the collector must sue you in the state in which you live, your current state's SoL applies.
[Back to top] -
If a debt was not validated within 60 days of dispute, What rights do I have if the creditor starts collection actions a year later?
Assuming you've followed all of the creditor's dispute
requirements outlined in the credit disclosure statement and the creditor failed to meet the requirements outlined in this document as well, you have a valid complaint.
Put your complaint in writing, be specific and reference the credit disclosure statement. Keep accurate records of your efforts to resolve this.
If on the other hand, you're dealing with just a collector, there is no requirement for collectors to validate a debt within 60 days. The only time limit spelled out in the FDCPA is the 30 days you have to dispute the debt.
Collectors can take as much time as they need to properly validate a debt. If the collector failed to validate the debt and is now pursuing collection actions, you have a valid complaint and potential lawsuit against the collector for violations of the FDCPA.
[Back to top] -
The collector is demanding I pay by Post-dated check; what are my rights?
Collectors can demand you pay by post-dated check but there is no law that compels you to pay by this method.
It's your choice! However, I never recommend paying by post-dated check or automatic withdrawal (EFT). These methods almost always result in your account be overdrawn for a variety of reasons but usually because and unethical collector withdrew the funds early.
Unethical collectors cash checks and withdraw funds early and some have been known to withdraw the same amount of funds twice even though they were only authorized a one-time withdrawal.
Don't let anyone bully you into using post-dated checks or automatic withdrawals.
These actions will cause you even more headaches and can cost you a great deal of time and money to resolve all the problems caused by these actions. Of course, once they have the money, getting it back is nearly impossible without an expensive legal battle.
State up front that you will be paying by check or money order sent via U.S. mail and put this in writing.
If anyone tries to force you to pay by post-dated check or automatic withdrawal, report them to your state attorney general.
Attorney General List of Websites
[Back to top] -
What are the general rules when debt collectors contact me for the first time?
Debt collection notices and debt verification must follow the rules outlined in the Fair Debt Collection Practices Act (FDCPA).
Section 809 of the FDCPA covers notifications and validation of debts. When you dispute debts the FDCPA requires debt collectors to obtain verification of the debt from the original creditor and then you a copy of the verification document(s).
The principal purpose of this section of the FDCPA is to help consumers who have been mis-identified by debt collectors or who dispute the amount of the debt. The verification of the identity of the consumer and the amount of the debt be obtained directly from the creditor. Mere itemization of what the debt collector already has does not accomplish this purpose.
This section requires a collector, within 5 days of the first communication, to provide you a written notice containing: (if not provided in the first communication)
the amount of the debt; and
the name of the creditor, along with a statement that he will:
assume the debt's validity unless you (the consumer) disputes it within 30 days,
send a verification or copy of the judgment if the consumer timely disputes the debt, and
identify the original creditor upon written request.
WARNING! If a debt collector's first communication with the consumer is oral, he may make the above disclosures orally during this initial conversation and therefore avoid the requirement to send a written notice.
If you beleive a debt to be invalid, orally dispute it and demand the collector send the proper debt notification required by the FDCPA.
Section 805 covers communication rules and outlines who can be called, how often and when debt collectors must stop calling you.
Use this link for more information...
Section 805
[Back to top] -
What can I do about collectors who keep calling me about a debt I paid (or settled) years ago?
When you've already paid off a debt (or settled it), the best way to stop harassment is to send collectors who call, a letter informing them that the account was previously settled and is no longer collectable.
Your letter should also demand that the collectors remove your account, and all references to your personal information, from their records.
Additionally, your letter should clearly state that you do not expect to hear from them again but, if you do, you will consider any contact in violation of the Fair Debt Collection Act and you will immediately report their actions to your State Attorney General and to the Federal Trade Commission and take any and all legal action necessary to protect yourself.
Use this link for free sample letters...
Free Sample Debt and Credit Letters
[Back to top] -
What is a grace period?
Many lenders offer grace periods that may range from 5 days to as many as 30 days. However, these grace periods DO NOT not mean the debt is not delinquent or overdue, it only means the lender has agreed to wait a certain number of days before taking any collection actions.
Check the fine print in your credit disclosure statment!
Most credit contracts that include grace periods continue to charge interest during the grace period and, in many cases, at the highest interest rate allowed by law.
WARNING! Quite often lenders use your use of the grace period as an excuse to raise your interest rate.
Keep in mind that many lenders will charge an additional fee (usually called a late fee) and that your payment is applied toward the late fee first, then toward the outstanding or unpaid interest, then toward the current interest and finally (if there is anything left) toward the outstanding balance.
In most cases, the delinquent date and the date the statute of limitations to collect the debt begin running are the same day. This is also the date that should be reported to credit reporting agencies and credit bureaus.
Please see this site for more credit reporting info...
Credit Reporting Periods
[Back to top] -
What is IRS Form 1099?
This is an IRS Statutory Notification Letter - Publication 908 referenced as IRS Form 1099.
Typically, you'll receive an official looking letter that reminds you of a debt that you have failed to pay. It then refers to the creditor's "right to forgive this debt and submit a Form 1099 to the Internal Revenue Service on all bad debt accounts.
The last sentence usually reassures you that the creditor does not intend to take such an action at the time, and then urges you to remit payment to "avoid any additional collection activity."
According to the FTC website, this letter, because of its implied threat, clearly violates the FDCPA, Section 807(5) "False threats of legal action"
See my answer to this FAQ here...
IRS Form 1099 - FAQ
[Back to top] -
What is the legal definition of a minor, child or juvenile?
There are several definitions depending whether you're dealing with a state or federal law. Here are the most commonly accepted definitions of minors, children and juveniles:
Minors or Minority Definition:
The term generally refers to anyone who has not reached full age to vote, buy alcoholic beverages, join the military, sign legal contracts and and so forth. Exactly when someone is a minor depends on the issue at hand.
An 18 year old is considered an adult when voting, joining the military, signing credit contracts and so forth.
Only people 21 years of age can purchase alcohol thus a 20 year old is still a minor in this category.
Minority is the preferred legal term because it encompasses the full range of persons who fall into underage categories such as children, infant, juvenile, young person, pupil and so forth.
Children or Child Definition:
A person who has not reached the age of 14 is considered a "child of tender age". Just to clarify, children lose their status as a child of tender age on their 14th birthday. However, in some jurisdictions the term includes children up to the age of 21 in areas such as child custody and child support.
Juvenile Definition:
Generally this refers to people between the ages of 14 and 17. They lose their juvenile status on their 18th birthday.
[Back to top] -
When are debts considered legally delinquent?
Unless the credit contract states otherwise, all debts become delinquent the day after a payment that is due is not paid.
Check your credit disclosure statement for the exact terms of your credit contract.
Also, see "Grace Periods"
[Back to top] -
What does charge off mean?
The IRS allows creditors to charge off debts that have become worthless. The rule is called the "Specific Charge-Off Method".
In a nutshell, this rule allows creditors to take a loss on their income taxes when a debt they are trying to collect becomes worthless. Companies do not actually have to go to court to prove the debt is uncollectible and they can still try to collect the debt at a later date. If they are successful in collecting the debt (or any part thereof) they must claim it on their tax return in the year collected.
Generally, creditors will try to collect the debt for a few months or, in some cases a few years. They either do this through an in-house collection department, or by hiring a third-party collection agency. When they hire debt collectors, the creditor retains legal rights to the account and the bill collector must act on behalf of the original creditor.
Quite often, creditors sell accounts they deem worthless (or not worth their time and expense) to third party debt collection agencies. When they sell the account, they sell all rights to the account as well so only the new legal owner of the account can collect the debt. Once a company decides to charge off a debt they are required to report that information to a credit bureau within 90 days of the debt's charged off date.
Delinquent debts accounts are bought and sold daily so your old account might end up in the hands of a dozen different debt collectors over the course of several years. This explains why you receive out-of-the-blue calls from debt collectors demanding payment on an old forgotten debt.
[Back to top]
Divorce and Debts
-
Am I responsible for my ex-husband's or ex-wife's debts?
Whether you are responsible for your ex-husband's or ex-wife's debts depends on the circumstances surrounding the issue, your state law and perhaps most importantly, who signed the credit contract.
For instance, if your name is still on the credit contract you are still responsible for the debt regardless of what the divorce decree states.
It's important to understand that a divorce decree only spells out who is supposed to pay the debt. It does NOT legally change who is responsible for the debt.
When couples divorce, they usually agree on who pays what. For example, a car loan is in both names and the divorce agreement states that the ex-wife keeps the car and is responsible for making the payments.
Several months later, when the ex-wife defaults on the car loan, collectors start calling her and her ex-husband. The ex-husband claims that the debt is not his because his ex-wife got the car and the payment in the divorce.
The collector says it is the ex-husband's responsibility and will pursue legal action if he does not pay up. The collector is correct and will probably win in court!
During thje divorce process and especially after the divorce is final, divorcing couples would be wise to have joint credit contracts revised so that only the name of the person responsible for the debt is on the contract.
Be advised that creditors are reluctant to do this, especially after a divorce, because experience tells them the chances of the loan becoming overdue is high and so having two people responsible for the debt is better because if one ex-spouse defaults, the lender can still pursue the other ex-spouse.
[Back to top] -
What happens when an ex-spouse goes bankrupt?
If there are no joint debts, you have nothing to worry about and your credit will not be affected.
On the other hand, you might be held responsible for the entire debt of any joint account with your name still on the contract.
The bankruptcy laws are very complicated and with the recent changes, it's best to consult a bankruptcy attorney to be sure of your status!
Need a Lawyer? LegalMatch allows you to present your case, and respond only to attorneys who want to help you. It's Free & Confidential.
[Back to top] -
Why wasn't I notified when my ex-spouse failed to pay a joint debt that he agreed to pay?
Because the creditor probably has only one address; typically the address before the divorce and the creditor is not obligated to track you down.
Always remove your name from joint accounts upon divorce. If the lender refuses to allow this, then ensure the lender has your current address and agrees to notify you whenever the account is in danger of becoming delinquent.
Doing this may prevent the account from being sent to collections and being reported as a negative on your credit reports.
[Back to top]
Garnishments
-
Are disability payments subject to garnishment?
In most states, State paid disability, private disability insurance payments and most retired disability payments are exempt from garnishment.
However, there are exceptions when you owe back child support or certian taxes. Check with your state attorney general's consumer protection division to be sure about the rules in your state.
[Back to top] -
Can the funds in my bank account be seized or frozen by collectors?
The short answer is yes! If you owe creditors, collectors or anyone else money, they can obtain a money judgment and have the funds in your bank account frozen or they can seize them outright. Here is a brief overview of the rules:
Whoever holds a judgment against you can go to someone else who owes you money or is holding money for you and intercept that money through a wage garnishment or garnishment of your bank account.
Anyone who owes you money, or holds money for you, is called the "garnishee defendant" and through the garnishment process, can be forced to reveal to the court how much money they owe you.
Then, the court can require, through an order called a Writ of Garnishment, to force the bank or your employer to pay a certain part of the money owed to you, into the court registry. After receiving payment, the court turns the money over to whoever holds the judgment.
In order for someone to garnish your wages or bank account, they need to know someone who owes you money or where you bank or where you work before they can proceed with a garnishment action. The garnishment process costs a small fee (around $20.00 in most states), plus the costs of serving the papers. You will more than likely have to pay these fees as well.
Note: Only disposable earnings and the amount set by state law can be garnished from wages. Ask the clerk of the court for the correct amount in your state.
State Garnishment Laws
Federal Wage Garnishment Law
Garnishment actions on wages and bank accounts
[Back to top] -
I had a written payment agreement with a collection agency but now an attorney is threatening to garnish my wages for twice the amount I am paying the collection agency. Is this legal?
Assuming you complied with the terms of the written agreement, turning the account over to an attorney and the wage garnishment threats may be illegal.
Does the attorney know about the written agreement? If not, have you informed the attorney of the agreement? Are you currently paying at least as much as the federal limit (or your state's limit) on wage garnishment?
I suggest you contact your state attorney general and ask about the laws in your state and your rights concerning this issue. Also, please review wage garnishment information here...
Garnishment Laws
[Back to top] -
Is Social Security subject to garnishment?
Generally, Social Security benefits are exempt from execution, levy, attachment, garnishment, or other legal process, or from the operation of any bankruptcy or insolvency law. The following benefits are exceptions and subject to garnishment:
(1) to the authority of the Secretary of the Treasury to make levies for the collection of delinquent Federal taxes and under certain circumstances delinquent child support payments; and
(2) to garnishment or similar legal process brought by an individual to enforce a child support or alimony obligation. Section 207 of the Social Security Act provides:
"The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law."
However, section 6331 of the Internal Revenue Code of 1954 (26 U.S.C. 6331) which was enacted into law on August 16, 1954, after the enactment of section 207, gives the Secretary of the Treasury the right to levy or seize for collection of delinquent Federal taxes, property, rights to property, whether real or personal, tangible, or intangible and the right to make successive levies and seizures until the amount due, together with all expenses, is fully paid.
References: SSR 79-4: SECTIONS 207, 452(b), 459 and 462(f) (42 U.S.C. 407, 652(b), 659 and 662(f)) LEVY AND GARNISHMENT OF BENEFITS 20 CFR 404.970 SSR 79-4
Special Note: According to the Social Security Administration's (SSA) website, the SSA recently changed it's rules to allow the collection of overdue Program and Administrative Debts using Administrative Wage Garnishment!
The regulations dealing with the collection of program overpayment debts that arise under titles II and XVI of the Social Security Act (the Act) and administrative debts owed to the SSA have been modified. Specifically, the change establishes new regulations on the use of administrative wage garnishment (AWG) to collect such debts when they are past due.
AWG is a process whereby the SSA orders the debtor's employer to withhold and pay the SSA up to 15 percent of the debtor's disposable pay every payday until the debt is repaid.
The employer is required by law to comply with the AWG order.
These new rules are effective January 22, 2004. (References: SOCIAL SECURITY ADMINISTRATION 20 CFR Parts 404, 416 and 422 RIN 0960-AE92 Federal Old-Age, Survivors, and Disability Insurance and Supplemental Security Income
[Back to top] -
What is disposable income?
The term " disposable income" means a variety of things when discussing debts and other issues.
In simple terms, "disposable income" is whatever money you have left after paying all required taxes and national insurances!
Disposable income is after-tax income that is officially calculated as the difference between personal income and personal tax and nontax payments.
In general terms, personal tax and nontax payments are about 15% of personal income, which makes disposable personal income about 85% of personal income.
When applying for certain state, federal and private benefits and protections, the term "disposable income" may change slightly.
For instance, when applying for loans, mortgages, credit cards and veterans home loans, disposable income is that income left over after paying all required taxes, national insurances and all essentials such as food, clothing, and shelter.
Some state and federal assistance programs look at disposable income as "any income available for spending and saving"
Generally, this means money left over after taxes and fixed costs such as rent/mortgage, food, car payments, insurance, etc.)
Disposable income is also defined as the total income that can be used by a household for either consumption or saving during a given period of time, usually one year.
Another way to define disposable income is that portion of an individual's income (wages and salaries, interest and dividend payments from financial assets, and rents and net profits from businesses as well as capital gains on real or financial assets) over which the recipient has complete discretion.
For the purposes of calculating whether you are entitled to federal, state and non-profit legal help and similar services; many states will deduct the following from your income:
a) Deduction of a certain amount depending on how many dependent children you have,
b) Tax and National Insurance.
c) Maintenance you are paying to your wife/husband of former wife/husband or a child or relative, (who are not members of your current household).
d) Housing costs, for example mortgage or rent, (less any housing benefit). This also includes council tax, water rates, insurance premiums and other costs associated with where you live. There is a maximum figure of £545 per month if you have no dependents. Otherwise the full value of your housing costs can be taken into account.
e) Employment related expenses, for example travel costs. This figure is a set of £45 per month.
f) Childminding charges, these are only deductible if you are receiving a wage or salary and actually pay private childminding charges. Deduction can only be made for children 15 or under, (unless they are disabled in which case there will be no limit on age).
g) If you are in receipt of certain state benefits on top of your income then these will be disregarded, (examples are disability living allowance, invalid care allowance, council tax benefit, housing benefit, payments out of the social fund etc.).
Disposable income was also known, in previous generations, as discretionary money. The bottom line is you should always ask how your disposable income is being figured.
[Back to top]
Judgments
-
Arbitration is an alternative to legal actions and can be instrumental in preventing the award of a money judgment!
The term "arbitration" refers to a method of dispute resolution involving a neutral third party. In contrast, the term "mediator" refers to someone who merely tries to help two disputing parties reach a mutually agreeable solution. So what's the difference? Arbitration is legally binding while mediation is not!
Arbitration is becoming very popular as a means to resolve debt disputes without the high costs associated with court battles. One area where arbitration has become extremely popular is car sales. Many automobile dealers ask you to sign an "arbitration agreement" so that in the case of any dispute concerning your purchase and warranty issues (especially expensive maintenance) you cannot use the court system to seek compensation. Instead, you must use an arbitrator and usually one selected by the car dealer.
When it comes to credit cards, loans, mortgages and many other credit-related issues, arbitration is now written into the credit contract as the primary means of resolution. Read the fine print carefully BEFORE signing any contract that requires arbitration because these contracts always favor the creditor!
However, when it comes to settling debts, arbitration can work in your favor. Whenever a debt dispute arises and court action is threatened, look over your credit contract carefully; you might be entitled to arbitration.
If you end up in court but have made "good faith" efforts to pay your debts and have records to prove your actions, ask the judge to send the case to arbitration based on your willingness to cooperate and to resolve the issue and on the collector's unwillingness to work with you. Some judges may be inclined to send the case to arbitration when debtors demonstrate a willingness to pay but cannot meet the collector's demands.
[Back to top] -
How much interest can collectors add to judgments?
All states have their own rules for adding interest to judgments. Sometimes called statutory charges, because the amount of interest is set by law.
Typically, interest begins to accrue from the date the judgment is rendered until the judgment is paid in full.
Use this Garnishment Laws and Procedures link to learn what about your State's interest rate on judgments. After locating your state's garnishment procedures, look at the "Interest Rate at which Judgments Accrue " section located just after the procedures.
State Garnishment Laws
[Back to top] -
I received a Default Judgment notice; do I have any options?
If you receive a notice that a default judgment has been issued against you and you were not aware of the court date, immediately go to the court and request copies of all the paperwork.
Look for mistakes and misinformation, especially on when and how you were notified. If you beleive you were not given "due process" then you can file a motion for rehearing or motion to dismiss with the court.
If you can prove that you were not given due process, the judge must consider your circumstances. It's possible to have the case dismissed. Unless you are very comfortable with filing pro se (by yourself) I highly encourage you to discuss your case with an attorney well versed in credit and debt consumer law.
Need a Lawyer? LegalMatch allows you to present your case, and respond only to attorneys who want to help you. It's Free & Confidential.
[Back to top] -
What are Default Judgments?
The term "default" refers to a "failure to act" and the term "judgment" (often misspelled as judgement) means the "final disposition in a legal proceeding".
When dealing with credit and debt collection issues, default judgments are typically granted because the debtor fails to act; usually by not paying a debt and then by failing to show up in court.
When you fail to appear in court, the judge usually grants the plaintiff (usually a collector) a default judgment.
If you receive a court appearance notice DO NOT ignore it!
The only way to protect yourself is to appear in court and present the judge with your side of the story. Go to court prepared to show the efforts you've taken in "good faith" to resolve the issue or, in asking for relief in the case of an expired statute of limitations.
[Back to top] -
What does "Judgment Proof" really mean?
Judgment-proof is the commonly used term but a more accurate term would be "execution-proof"!
Although creditors and debt collectors win lawsuits, they still have to collect from you, but if you are penniless then you are at least temporarily insulated not from judgment but from execution of the judgment (the collection of the debt)
You may be considered "Judgment Proof" during periods of unemployment or while drawing disability pay or disability retired pay or if you have no assets such as home, car, land, and other big-ticket items. In other words, you have no money and can prove it!
Never ignore a lawsuit just because you are broke or have no assets! If a debt collector or creditor is trying to sue and you believe that you are judgment proof, you must respond to the lawsuit as such.
Failure to appear and show the judge why you are judgment proof opens the door for the judge to grant the collector a "default judgment".
Even though they cannot collect anything from you now, with a judgment against you, collectors can wait many years while periodically trying to collect the debt.
Judgments also show up on your credit report as a huge negative!
If you lose your "judgment proof" status due to new employment, be advised that whoever owns the judgment can seek wage or bank account garnishment.
So, unless the debt has expired, once you're employed again, it's better to negotiate a reduced payoff rather than risk a court-ordered judgment.
Your credit report will show "debt settled" instead of the more negative "judgment"!
[Back to top] -
What is a judgment?
The proper term is Court Judgment. A court judgment is the final decisive act of a court in defining the rights of the parties.
It includes a decree and any order from which an appeal lies.
Other terms commonly used include, default judgment, civil judgment, foreign judgment, and judgment proof
[Back to top]
Medical Debts
-
Do medical debts expire?
Medical debts are generally considered close-ended credit contracts with a definite pay-off time limit and statute of limitation.
Unless you have a separate agreement, medical debts are usually payable at the time services are rendered or, in some cases within 30 days.
Check your State's SoL here...
Statutes of Limition by State
[Back to top] -
Do Medical Debts fall under the Fair Debt Collection Practices Act?
Yes! Medical Debts and bills fall under the Fair Debt Collection Practices Act because medical debt meets the definition of a "debt" under rule 803(5):
This rule defines "debt" as, "a consumer's obligation to pay money arising out of a transaction in which the money, property, insurance, or services are primarily for personal, family, or household purposes."
[Back to top] -
My medical provider failed to bill my insurance company, am I still responsible for the debt?
Some common myths:
1. Medical providers are required to bill your insurance company.
2. Insurance companies have to pay your medical bills.
The truth is, you are responsible for paying your medical debts. Now, if you happen to have medical insurance, AND the insurance company receives the medical bill in accordance with its stated requirments AND the medical service is covered under the policy, then and only then is the insurance company responsible for paying the debt.
Pay special attention to the words, "receives the medical bill in accordance with its stated requirments" because this is what gets people into trouble more often than not.
As a convenience, most medical providers offer to bill your insurance company. However, accepting their offer does not relieve you of the responsibility of ensuring the medical bill gets paid.
It's not uncommon for medical providers to submit medical bills after an insurance company's deadline for filing. In some cases, the provider may, for a number of odd reasons, not submit the medical bill at all. Regardless of the reason, the bottom line is that the consumer is still responsible for ensuring the insurance company "receives the medical bill in accordance with its stated requirments"!
In some cases, your insurance company may reject the bill or flat out refuse to pay. The fact that your insurance company did not pay is not the medical provider's concern! The medical provider has the right to expect you to pay the bill in a timely manner.
You may have to argue with your insurance company and even go through dispute resolution but while you're doing that, the medical provider is still entitled to timely payment.
The best thing you can do is communicate with your medical providers to let them know you are working to resolve the issue. In the end, you may have to pay the provider yourself and then work with your insurance company to get reimbursed.
Always read the medical provider paperwork (contract for services rendered) carefully!
[Back to top]
Miscellaneous
-
Can a homeowners association charge interest on unpaid association fees, in addition to the late fee?
Only if the original association documents, that you agreed to, allow it.
[Back to top] -
What are Contracts Under Seal?
A contract under seal is considered a more formal contract. Generally, valuable consideration is necessary to make an enforceable contract but for a contract under seal, no consideration is necessary. Traditionally, such a contract carries with it an *irrebuttable presumption of consideration. (The phrase, "irrebuttable presumption of consideration" means that the person who owns the contract can expect to receive the stated value of the contract and that the contractor (whomever signed the contract) will deliver the stated value according to the contract without argument.
The Law long ago decided that a seal, real or imitation, attached to a promise, amounted to good consideration for that promise, despite the fact that the man who makes the promise puts the seal there. In reality, whether a contract has a seal or not does not make any difference in its legal effect.
Today, a seal is generally an impression stamped or embossed on paper to authenticate a document or attest to a signature, such as a corporate or notary seal. Some jurisdictions, especially states on the eastern seaboard, require certain documents such as deeds and leases to be under seal.
[Back to top] -
What are debt suspension and debt cancellation contracts?
Debt Suspension Contracts (DSC) and Debt Cancellation Contracts (DCC) are banking products that substitute for credit insurance.
The Comptroller of the Currency, Administrator of National Banks (OCC) finalized it's regulation, 12 CFR part 37 effective June 16, 2003. This regulation covers DCCs and DSAs issued by national banks. These are banking products, not insurance products thus federal law, not state law, governs them and state insurance regulators have no role in the regulation of these products.
Debt Cancellation Contracts
The regulation broadly defines debt cancellation contracts and debt suspension agreements. A debt cancellation contract is defined as a loan term or contractual arrangement modifying loan terms under which a bank agrees to cancel all or part of a customer's obligation to repay an extension of credit upon the occurrence of a specified event.
The regulation does not otherwise define what is a "specified event." Thus, a national bank is free to design its contracts to address not only traditional events such as death, disability or involuntary unemployment of a borrower, but also any event that may reasonably be expected to occur in the life of a borrower.
Debt Suspension Agreements
A debt suspension agreement is defined as a loan term or contractual arrangement modifying loan terms under which a bank agrees to suspend all or part of a customer's obligation to repay an extension of credit from that bank upon the occurrence of a specified event.
This definition is intended to cover debt suspension agreements under which interest continues to accrue during the suspension period, as well as those under which the accrual of interest is suspended. It also provides that a debt suspension agreement does not include arrangements in which the borrower unilaterally decides to defer a payment or the bank unilaterally decides to allow a deferral of a payment, so-called "skip-a-payment" agreements.
See additional information here...
Debt & Loan Insurance
[Back to top] -
What are the
The top 10 frauds listed in the FTC report are:
1. Advance-fee loan scams 4.55 million victims;
2. Buyers clubs 4.05 million victims;
3. Credit card insurance 3.35 million victims;
4. Credit repair 2 million victims;
5. Prize promotions 1.8 million victims;
6. Internet services 1.75 million victims;
7. Pyramid schemes 1.55 million victims;
8. Information services .8 million victims;
9. Government job offers .65 million victims; and
10.Business opportunities .45 million victims.
The Federal Trade Commission's (FTC) statistical survey of fraud in the United States shows that nearly 25 million adults or 11.2 percent of the adult population were victims of fraud during the year studied.
Advance-fee Loan Scams; the most frequently reported type of consumer fraud:
This scam involves consumers paying a fee for a “guaranteed” loan or credit card. 4 1/2 million consumers paid advance fees but did not receive the promised loan or card. In fact, some consumers reported that more than once during the last year they paid fees to get loans or credit cards they did not get.
Buyers’ Club Memberships and Unordered Publications;
The second most commonly reported fraud! Four million consumers were billed for memberships they did not authorize or publications they did not order. Credit card insurance scams and credit repair were the third and fourth most common frauds identified in the survey.
While federal law limits consumers’ credit card fraud liability to $50, fraudsters sell credit card insurance by falsely claiming that card holders face significant financial risk if their credit cards are misused. An estimated 3.3 million consumers bought unnecessary insurance against the unauthorized use of their credit cards. Some fraudsters convince consumers that they can help them remove truthful, negative information from their credit report, or establish a new credit record. They can't, and credit repair schemes are illegal, but two million consumers paid for “credit repair” services the year prior to the survey.
[Back to top] -
What is a Lien?
Lien: A legal right or interest that a creditor or other person(s) have in another's property and lasting until the debt that the lien secures, is paid.
Mechanic's Lien:
The right of a craftsman, laborer, supplier, architect or other person who has worked upon improvements or delivered materials to a particular parcel of real estate (either as an employee of the owner or as a sub-contractor to a general contractor) to place a lien on that real property for the value of the services and/or materials if not paid.
Numerous other technical laws surround mechanic's liens, including requirements of prompt written notice to the owner of the property (even before the general contractor has been tardy in making payment), limits on the amount collectable in some states, and various time limitations to enforce the lien.
Ultimate, last-resort enforcement of the mechanic's lien is accomplished by filing a lawsuit to foreclose the lien and have the property sold in order to be paid.
Property owners should make sure that their general contractors pay their employees or subcontractors to avoid a mechanic's lien, since the owner could be forced to pay the debts of a general contractor even though the owner has already paid the contractor. If the worker or supplier does not sue to enforce the mechanic's lien, he/she may still sue for the debt.
The term mechanic's lien is also referred to as "materialman's lien" and "construction lien" and used when improvements, repairs or maintenance is performed on real property.
Creditors, debt collectors and ordinary citizens can petition courts to grant a judgment and and then place a lien on a debtor's "Real Property".
Called a "Judgment Lien", the lien places an encumbrance on the property so that, if the property is sold and funds are left over after the primary lienholder (mortgage or loan company) is paid in full, any excess funds are used to pay down or pay off the lien.
Note: The term "Real Property" is legally distinguished from "Personal Property". Land is called real property. Personal property is also called chattels (defined as any property - consumable or nonconsumable, tangible or intangible) and is property other than the land itself.
If you receive a "notice of a lien", ALWAYS respond! If the lien surprises you, immediately check with the court that issued the lien and see if a mistake was made. Request copies of all court documents and look for any discrepancies and, if any exist, consider filing a petition to rehear the case. You might just get the case overturned.
Remember: DO NOT fail to respond!
Liens on a house, real property liens, judgment liens and state or federal tax liens all mean the same basic thing as described above.
However, it's important to note that tax liens take priority over all other liens placed on a property. So, if your property already has a lien from a credit card company and then a tax lien is placed against the property, the tax lien gets paid first after any mortgages are satisfied.
[Back to top] -
What is a promissory note and when is the legal due date?
A promissory note is an instrument involving two parties in two capacities. One party, the "maker" promises to pay a second party, the payee, a stated sum of money, either on demand or at a stated future date.
The note may range from a simple "I promise to pay $X to the order of Y" form or more complex legal instruments such as installment notes, collateral notes, mortgages, and judgment notes.
"Time Note" is a note payable at a future date.
"Demand Note" is a note payable upon the request of the payee or demand of the payee or holder.
For an instrument to be negotiable it must contain within its four corners all the information required to determine whether it is negotiable. To be negotiable, the instrument must:
be in writing;
be signed;
contain a promise or order to pay;
be unconditional;
be for a fixed amount, be for money;
contain no other undertaking or instruction;
be payable on demand or at a definite time, and
be payable to order or to bearer.
If these requirements are not met, the instrument is not negotiable, and the rights of the parties are governed by the law of contract.
[Back to top]
Settlements
-
What does
The term settlement or settle means: "to compromise"! Put another way, it's a an agreement to substitute, for an existing debt or obligation, some alternative form of discharging that debt.
The term, " satisfaction" is the actual discharge of the debt by the substituted means. Compromise is an agreement to perform some action, while satisfaction is the actual performance.
Satisfied means the fulfillment of an obligation or claim, such as the full payment of a debt. Using these definitions, we can clearly see that settling debts means that the original debt is not paid in full and that some lessor amount is accepted as a means of satisfying (or discharging) the debt.
BEFORE offering to settle ANY debt, ALWAYS check to see if the Statute of Limitations (SoL) to enforce the debt has expired. See this page for mor information...
Debt Settlements
[Back to top]
Student Loans
-
Where can I find information about my rights concerning delinquent student loans?
Please visit...
Student Loan Consolidation
Student Loans in Default Help
[Back to top]
Powered by ODFaq v2.1.0
