A Letter from FIA Card Services

[RBisDebtFree]

Hello everyone,

This is my first post so I wanted to thank everyone at BKforum for your efforts, time and desire to help -- you definitely helped me. I wasn't posting anything as I was learning myself but I was a reading member for a long time.

I have filed on Aug 6th in Western District of Washington State -- I am lucky to have a good lawyer. My case seems to be a no-asset one, 6-month income is below median, pass the means test, filed due to the loss of employment. Everything seems to be going good so far, my 341 meeting is on Oct 1st.

However, I received a letter from FIA Card Services on Aug 31st; it's a personal line of credit through Bank of America. This is a personal line of credit that is basically a cash advance only credit card -- I didn't know this and a lot of other stuff that has to do with banks until I actually got into trouble. I had borrowed $10000 on this line about 2 years ago and paid it down in full then another $7000 in March, they offered the credit themselves and I had to cars that I needed to return (which cost me about $4000-4500) and then buy a car outright for about $2300 so I took the money out. After I took the money out, I made two payments

So now I got a letter from threaten to file an adversary proceeding (excuse me if this is not the term for it) to determine dischargeability of this debt unless:
a) I can prove that I did not take the money out without intention to payback
b) Make a one-time payment of $5600
c) Make a stipulation payment of $7000

I am also going to get my attorney's advice on what I should do but I want to see if anybody had similar experience and/or has some advice for this situation. The whole fact that I declared BK means that it's my fault and my poor money management, I have no excuses, but on the other hand it a fraud that I took this money out.

My question is: what would you do? I don't have money to pay $5600 as a one-time payment, I only have about $3000 in my account which is barely enough rent a place in our area with all deposits and last month's rents -- plus, I might have to pay my attorney, if I win, hopefully I will be able to recover fees from FIA but who knows. I don't want to do a stipulation payment as the whole point is get debt free and start fresh. Should I offer them the fees I would pay to my attorney? Do you think their case has solid ground or do they just make a last minute attempt to recover any money from me?

Thanks for all your help!

[KittyisBroke]

We had a letter from FIA also. Our attorney said to ignore it and that they likely would not file an AP. So far they have not and we have only until Sept 25th for the 60 days period to be over with. Keeping our fingers crossed. Also, if they do file an AP, attorney said we can offer then 10% of total due and they'd probably take it. So we are just going with this "ignore the letter" plan and so far we are OK, but won't be fore sure until 9/26/09.

[Chowder]

I am also going to get my attorney's advice on what I should do .......

Always smart.

The time span from cash advance to file date is the biggie. You made a few payments, which helps.

BTW. Hello. Western Wa here too. There's a few of us here.

[KittyisBroke]

Oh I forgot, we had about $10K in cash advances that were about 120 days from filing, so we were even worse than you! See what your attorney says. Also seard on this site and you will find great info on the "burden of proof" on THEM to proove fraud.

[2manybills]

FIA will more than likely settle for less if they really file an AP.

Why are they sending a letter directly to you if you have an attorney?

[RBisDebtFree]

Kitty, thanks a lot for the info -- knowing other people's experience is a big. I was thinking to send a response basically outlining that we made a few payments and intended to pay and supply that with additional documentation but maybe indeed I can simply ignore the letter. Thanks for the info once again!

Chowder, nice to meet people from your state, makes you feel that you're not alone in this in your state Thanks for your reply!

2manybills, I just poorly phrased it, they in fact sent that letter to my attorney. Thank you for the information!

[RBisDebtFree]

Kitty, if you don't mind me asking:
1) Have you made any payments since the cash advances?
2) When did you file?
3) When did you receive a letter from FIA? Also, was it before the 341 meeting?

Thanks!

[music12]

from what i read on this forum, it seems like the best way to go is to ignore it and see what happens. they will use any info you provide now against you if they can, so probably safest not to try to provide any documentation - anything can be twisted, believe me. maybe your lawyer will get on the phone with their lawyer and tell them they have no case. or maybe your lawyer will tell you to ignore it. if your lawyer tells you to pay up, get a second opinion! as long as they can't prove that you had no intent to pay back, they are stuck. i think this debt should just go away.

[KittyisBroke]

Kitty, if you don't mind me asking:
1) Have you made any payments since the cash advances?
Cash advances were in Jan and Feb, paid full monthly payments January through May 2009.

2) When did you file?
June 24, 2009

3) When did you receive a letter from FIA? Also, was it before the 341 meeting?
After the 341

Thanks!

[RBisDebtFree]

Thanks for the info Kitty, that gives more insight into your case.

music12, I just spoke to my attroney and he doesn't say that I should pay up. He mentioned that 2 payments make it a good-faith debt and there is not much solid ground for FIA to hold a case against me especially that I only have enough money in my account to rent a new place and that's it. He also mentioned that if I ignore it, they might file (which is not likely he said) and if they do then it would cost about $2000 to fight them in court as it's a very complex process. For now, he offered to write them a letter and then talk to them over the phone if they call him -- that would cost me $250. He said that in most cases, they give up either at the response from debtor's attorney or after a phone call -- my attorney said that as soon as they see that the debt is not collectible, they stop any action.

I guess it's easy and cheap for a creditor to send a letter but the full process is much more expensive...

[mike258]

I got the same type of letter...paid my attorney $150 to write a response...and never heard from them again.

[RBisDebtFree]

mike, hopefully my story with this end the same way -- I decided to have an attorney write a response to them and see what happens. I have to believe his experience, he is #9 bankruptcy attorney in the Washington state, practiced law for 40 years I think. Another plus is that he is also a collection attorney and one of the bankruptcy court trustees. I guess he knows what we should do in this case.

[destitute]

I think the key here is that you filed because of loss of employment. As long as that loss came after the advances and it was an involuntary loss there's no way I think they can prove intent. Because of the time frame between the advance and filing the burden of proof is on them and I don't see how they can make that.

[RBisDebtFree]

In fact, I lost my job, then get a new one and then made the cash advance but by then I was drowning in debt -- an expensive lesson to learn to have a few months of expenses in your savings.

I don't know if this changes the situation?

[destitute]

Since you were gainfully employed at the time you took the advances and made a few payments before losing your job and filing I still think it will be nearly impossible to prove fraud on your part. My guess is that they will go away.