credit union - how long till lawsuit

[IamOld]

Everyone, I'm returning to my favorite topic of my local credit union - today I get the call us TODAY message.

Atty (filing for me BK 7 - fingers and everything else crossed in Sept) says just give them his info. BUT - I ask my usual question - isn't that "heads up" for them?

I'm still sending them $50 from each paycheck (twice/month) for line of credit (which actually should be caught up by now) but no payment on their cc for now...sigh...probably 4 months.

I HAVE to stall till Sept. Is it better to tell them my sob (true) story OR remain silent...

IF they want to sue, do they still have to send the 30 day validation letter? If they do, that alone would put me well towards August by now...

Advice from the pro's please....!!!!!!!

[IamOld]

Sorry to be a pest...day's nearly done...catleg??? Frogger???

[treehugger1]

The CU is an original creditor. Your state laws might vary, but CU's are generally local and if the amount owed is under your state small claims amount, they likely have a staff person who can file the small claims. You still need to be served, and then you probably have 20 days or so to respond.

Unless your state law requires some 20-30 day final demand notice before suit, they can probably act immediately upon your breach of contract.

Bottom line is that once you get close to charge off, I would assume the worst case scenario.

I say this, but I had a line of credit from a local CU that defaulted and they have never acted on it (38 months after charge-off.) I also had a voluntary repo with a CU and there was an approximate $1500 deficiency after they sold the auto. I'm not sure if they can sue for the deficiency in Oregon. I read mixed opinions. They sent the balance to some out of state CA that I DV'd.

CU's can be strange. They can also be quite smart when it comes to making a decision to sue; is their money recoverable? They may do their own analysis and decide you are not worth the suit. Tough guess on your part.

You should be very careful that you do not have any checking or savings account with the CU. CUs are big on setoffs.

[catleg]

Agreed with TH. They are likely to sue if they think they can make a recovery, but unlike a Citibank or Chase who will sue you out of spite blindly, they will look at it and not waste money chasing a lost cause. This is where you might want to tell them about your plans to file a BK in Sept. They may be happy to save the legal costs of suit. If you have an attorney lined up, give them his number so they'll know you're serious. I think this will prevent rather than encourage a lawsuit (though they may start a tickler on your account to sue you if you haven't filed by whatever date you tell them.)

Sorry for the late response I was working on other pressing matters, my collections bingo card.

[IamOld]

Thank you guys very much - I USED TO have checkin/saving with them...no more.

I have two debts with them - an overdraft line of credit which now is current - normal payment was $26/every two weeks - layoff - went to $50/mo, and I've been sending them - through my present pay - $50/pay. So that SHOULD be current...and then some.

The credit card - about $4,600 outstanding...that's 4 months late. So I don't know if they can sue on the line of credit - about $1,000 (or less) outstanding, as that should be pretty current. Of course THAT would be small claims.

THe credit card here...that probably would not be small claims.

THe thing is, if they sue for the line of credit that would be done VERY quickly here - I think the "line" for small claims is around a month, month and a half...so that would put me MAYBE to early Aug...that's why I'm wondering if making contact with them may be better...

My atty just said to give them his phone/info etc.

Incidentally, they pulled my credit at the end of April - it was REALLY bad by then - but it's worse now! :-)

So I don't know...maybe as you said if they get name of lawyer it may help...don't know.

The thing is, the $50/pay comes to $100/mo - which "overpays" the credit line by $50/mo, so theoretically that COULD go to the credit card...

BUT I think I'll go with the consensus here, and email them atty's name/info on Friday...after hours...

Again guys I'm very very grateful for your help!

Agreed with TH. They are likely to sue if they think they can make a recovery, but unlike a Citibank or Chase who will sue you out of spite blindly, they will look at it and not waste money chasing a lost cause. This is where you might want to tell them about your plans to file a BK in Sept. They may be happy to save the legal costs of suit. If you have an attorney lined up, give them his number so they'll know you're serious. I think this will prevent rather than encourage a lawsuit (though they may start a tickler on your account to sue you if you haven't filed by whatever date you tell them.)

Sorry for the late response I was working on other pressing matters, my collections bingo card.

[Pandora]

Iam

Okay, may be the obvious question is already answered, but I didnt see it...so ya know me.. gotta ask Why are you paying on the LOC at all at this juncture? Usually every loan (credit card, LOC, etc) with a CU is cross collateralized (hmmm..is collateralized even a word? LOL at any rate, ya'll know what I mean ) with the others (or at least our CU works that way).

If your lawyer told you to give them his name / number, that might work at first.. however they're going to want a BK Case number to prove you filed.

[IamOld]

An update - credit union emailed and said they wanted to work with me - I'm about $300 behind on the credit card and $175 on the line of credit...OF COURSE I thought I was AHEAD on the line of credit but nooooo...they apply everything to the CC first :-)

I told them...most of the truth - layoff, bad things, etc. They want to do a loan mod AFTER I complete their credit app - so I said I'd like to pay what I CAN but why credit app? I said to them my credit is horrible...

No answer...

If I can hold them off for a while till Sept with a few bucks I may do that...but I have a feeling that any official loan mod where I have to SIGN something would be bad, as in a new loan while contemplating BK? Right???

[treehugger1]

They want the credit application to update their database. Will they sue you within the next 60-90 days? Possibly. You could simply keep talking to them without agreeing to anything and see what happens. Of course, they could get pissed and sue but what difference does it make if you will file for BK in September?

[IamOld]

I think you are as usual correct Treehugger! I did hear back from them - actually their person was really "nice" - she said we could go like this for another month or two...I actually really need that $50 but if it holds them off for another month or two I may need to pay it...I'm going to offer them the same $50/pay for the next two months...

We'll see - I'm not replying tonight...that's a "gig" for tomorrow!!!

Atty cashed his check for my case...so I hope all is a go for Sept!

They want the credit application to update their database. Will they sue you within the next 60-90 days? Possibly. You could simply keep talking to them without agreeing to anything and see what happens. Of course, they could get pissed and sue but what difference does it make if you will file for BK in September?

[frogger]

How long before suit is the million dollar question. The one thing to remember however is, that as long as they are talking, they are not filing suit.

[sunshinepa]

An update - credit union emailed and said they wanted to work with me - I'm about $300 behind on the credit card and $175 on the line of credit...OF COURSE I thought I was AHEAD on the line of credit but nooooo...they apply everything to the CC first :-)

I told them...most of the truth - layoff, bad things, etc. They want to do a loan mod AFTER I complete their credit app - so I said I'd like to pay what I CAN but why credit app? I said to them my credit is horrible...

No answer...

If I can hold them off for a while till Sept with a few bucks I may do that...but I have a feeling that any official loan mod where I have to SIGN something would be bad, as in a new loan while contemplating BK? Right???

I would not sign a thing. Think I told you before, I would NOT be paying that 100 a month although I understand your strategy. Worst case at this point, they sue, it takes you into July, you get 20 days to answer summons, respond and drag it out.

They are probably saying they want to work with you because they know where this is headed, sure they've seen it before.

[IamOld]

I would not sign a thing. Think I told you before, I would NOT be paying that 100 a month although I understand your strategy. Worst case at this point, they sue, it takes you into July, you get 20 days to answer summons, respond and drag it out.

They are probably saying they want to work with you because they know where this is headed, sure they've seen it before.

Frogger & Sunshinepa - yeah, they probably know where this is headed...BUT like Frogger said, as long as I can drag this out and keep them talking is another day on the calendar so to speak!!!!!! Lord knows, I need every penny...

[catleg]

Just a reminder, it is almost mandatory that before you get sued, you will get a 30 day demand letter from the attorney stating what balance is due and that they're contemplating legal action. So assuming you're clever enough to differentiate these from the garden variety bill collectors you'll almost always have a 30 days heads up period. Maybe longer if you're clever enough to check your local court's filings and duck the process server.

[IamOld]

THANKS!!! catleg - actually I have an update - I'm able to pay CU a few bucks a month for the foreseeable future...