Collection question for a friend...

[mrskal]

My friend has Capital One breathing down her neck about a credit card. She has not paid in months, cannot file BK now because of selling their business about a year or two ago, and the new owner is supposed to make a lump sum payment at some point next year. Hopefully she will get it, as the new owner also makes monthly payments to her and are pretty far behind. She is on unemployment and her husband is on SS. Anyway, they are calling her and the guy literally says, "they will take you away in shakles! if you dont pay" and he is telling her to sell her car to pay them. He knows what kind of car she has, and tells her it is worth at least $10k. She does not know how he knows what car she has, but he knows year make and model. I suppose that is easy enough to find out. Of course she needs the car as she is trying to find work, duh!

The real question she has is this, he told her they can put a lein on her house, is that true? If it is, what is the process and how long until something like that is likely to happen?

[free2breathe]

From what I understand, it is possible for a creditor to get a judgment and then follow up with a lien on property to try to secure that judgment. I don't know how often it would happen. The property would have to have enough equity to make it worth it to a creditor. The property would need to be foreclosed on. The first lien holder (mortgage company) would have first dibs on the funds to pay back what they are owed, then if there's a second on the house, they would get theirs, on down the line. In the end, the credit card company or CA would have big legal fees and not likely much to show for it in the end.

Same basic principle for a car. There would need to be enough equity in the car for the credit company or CA to be able to make sure the lender would get their money and there would be enough left to satisfy any of the credit card company or collection agency's claim. Doesn't seem like a very viable alternative for them in most cases.

Also, threatening to "take someone away in shackles" is an illegal collection practice. If they can get that type of call recorded (of course, stating at the beginning of the call that it is indeed being recorded) then they have proof of violation of the FDCPA

[BrokeIn2010]

If I understand it correctly, and it might vary from state to state, but a lien doesn't mean automatic foreclosure / sale. It just gives them so leverage that if you (general use of the word) get stubborn or can't pay the judgement they can go back to the court and force a sale to satisfy the judgement. So long as you pay the judgement or file BK, the lien will just sit on the property till you sale it and then the judgement holder gets for crack and any money from the sale to satisfy the judgement.

[ryan]

Anyway, they are calling her and the guy literally says, "they will take you away in shakles! if you dont pay" and he is telling her to sell her car to pay them.
The real question she has is this, he told her they can put a lein on her house, is that true? If it is, what is the process and how long until something like that is likely to happen?

It would be nice if your friend had a recording of the collector making those specific threats....

anyway, to be in a position to take any action, the cap one would need to file a lawsuit, win the suit, get a judgment, and then work on collecting the judgment. All this takes time. Typically months. ...and there are ways to slow it down as well.
The car, depending on your friends equity in it, may be protected by her state's exemptions. ...so its possible even AFTER they were to win a judgment, it would be safe from the creditor.

The house lien , as mentioned above, will not immediately force the sale of the property, and can't occur anyway until they get a judgment.

Lots of unknowns here, since you don't provide enough information.

[mrskal]

Thanks all for your replies. I will tell her he should record it! haha
Where can I look up the law, or rules regarding that being illeagal? How is it worded is what I am curious about.

[BrokeIn2010]

It would be nice if your friend had a recording of the collector making those specific threats....

anyway, to be in a position to take any action, the cap one would need to file a lawsuit, win the suit, get a judgment, and then work on collecting the judgment. All this takes time. Typically months. ...and there are ways to slow it down as well.
The car, depending on your friends equity in it, may be protected by her state's exemptions. ...so its possible even AFTER they were to win a judgment, it would be safe from the creditor.

The house lien , as mentioned above, will not immediately force the sale of the property, and can't occur anyway until they get a judgment.

Lots of unknowns here, since you don't provide enough information.

And on the house: It might be protected (depending on the state) anywhere from totally to up to a "X" amount of equity which make a lien effectively worthless. And as was said: they have to get a judgement first, then there'll be another hearing/meeting which will be the disclosure of assets and declaration of exemptions (I've been told that's can be anywhere from 30 to 180 days-- if ever-- from the date of the judgement; depending on the case loads).

[mrskal]

And on the house: It might be protected (depending on the state) anywhere from totally to up to a "X" amount of equity which make a lien effectively worthless. And as was said: they have to get a judgement first, then there'll be another hearing/meeting which will be the disclosure of assets and declaration of exemptions (I've been told that's can be anywhere from 30 to 180 days-- if ever-- from the date of the judgement; depending on the case loads).

Are exemptions used for this type of thing, or is that just in BK? I dont think she has much equity in her house, if any at all. I do know the car on KBB came out to $13,000 though.

[GoingDown]

Thanks all for your replies. I will tell her he should record it! haha
Where can I look up the law, or rules regarding that being illeagal? How is it worded is what I am curious about.

Google "The Fair Debt Collection Practices Act."

When they said they would take her away in shackles, they violated that Federal Law, and they now owe her $1000 for violating that law.

Definitely record all telephone calls from them from now on. Clearly state the date and time in a loud voice and ask for their name, the name of their company, their call back number and extension, etc., and tell them you are recording the telephone call. Most likely once they know the telephone call is being recorded they will stop making such obviously illegal threats.

As for CapitalOne, they sued me over 5 years ago, and they won a judgment against me, but they have not yet collected a single penny from me.

They also made all sorts of threats against me, about all the things they were going to take from me, etc., and all they were doing was bluffing and trying to scare me.

It has now been years since I have a heard a peep out of them. No phone calls, no letters, nothing.

[DebtEnder]

Or be in a one party state and record it anyways. Georgia is nice in that respect. I let one idiot make some stupid statements and then told him he was recorded. Playing their voice back for them makes them hang up REAL fast. Course at the same time they almost always say they are recording it themselves so your good most times even if yer not in a one party state.

[BrokeIn2010]

Today 11:15 AM #7
mrskal - Check with the state you're in, but in most states you use whatever that state's bankruptcy exemptions are; some states (IRC) however do have difference exemptions for collections judgements. But unless I'm mistaken, all of them have a certain amount of property and money that is exempt from collections judgements. Best to check with a good lawyer or contact your districts BK court and ask them to see what exactly you are allowed to claim exempt and at what maximum value.

And count another vote for record. It's saved my bacon a few times, and it's always fun to play back the time and listen to them realize they've just effed up royally. Amazing how fast someone goes from "I'm a dully authorized representative of...." to their supervisor saying "Who? I'm sorry we've never had anyone by that name working here, clearly that person was from a outside agency and you need to contact them" :lol: