Debt and waiting it out (not filing BK)...is it a realistic possibility?

[PHXDWTN]

I have around $50,000 in bad debt (all credit cards) of which most stems from 2006. I've wanted to file BK but haven't and more and more time passed by to where I'm not even being bothered by collectors anymore.

I am in Arizona where the statute of limitations to collect credit card debt is 3 years which have passed. I don't have any judgments against me and they can no longer sue me to get a judgment since the statute of limitations has passed (if I understand it correctly).

The other issue seems to be the credit bureaus but from reading online, all bad credit card debt falls off the report after 7 years so the debt from 2006 should fall off in 2013.

Unless I'm not understanding something...I would then be debt free since they collectors can no longer collect the debt and the debt is no longer reported on the credit reports. Am I overlooking something?

Thanks for any help.
- Husband of PHXDWTN

[LadyInTheRed]

If all of your debt is past the statute of limitations and you haven't done anything to reset the statute, you probably don't need BK. But, you still might get sued, in which case you need to respond with the defense that the lawsuit is barred by the statute of limitations. I suggest you consult with an attorney to make sure you understand when the statute starts to run and what you might have done to unknowingly restart the clock. If you aren't comfortable navigating the courts, you should be prepared to hire an attorney if you get sued. And if you get sued, take action right away. If you let them get a default judgment and you can't get the judgment set aside, the statute of limitations won't keep them from collecting.

[DYLAN150]

PHXDWTN, just wondering why the credit card companies have not sued you? Are you collection proof?

[PHXDWTN]

I'm not sure what you mean by "collection proof"? I did have one that sued and got judgment but it recently fell off for some reason. Why no one else sued, I don't know.

[merime]

Good question! I had money put aside to retain an attorney, but due to unexpected days lost from work it had to go towards daily essentials. I question almost daily if its worth filing. I really can not afford the $1,900. Also, even though the attorney says I qualify for chapter 7, I question that.

[PHXDWTN]

To expand a little on the lawsuit that I did have against me that "fell off" now that I'm back home and can look through my files...

They sued me back in 2007 and I filed an "Answer to Complaint" in June 2008 as I was to appear in court. I had completely forgotten but I did get a lawyer who typed up the Answer basically denying their allegations. They in return filed a Motion for Summary Judgment in August and there was Pre-Trial Conference set for Sept. 2008 which I never attended. The case status is now "Adjudicated" and in January of this year I received a "Notice of Release of Garnishment" which I never even knew was in place honestly. Checking the County Recorder's Office against my name, there is no mention of a Judgment (and there used to be) so it looks like it's all cleared up.

EDIT: Looking at that Release of Garnishment, it actually lists that my bank, Chase, is released from all future obligations as to the Writ of Garnishment filed against Defendant in this lawsuit...so I'm not sure now if that means I am released as well. But again, nothing shows up with the Recorder's Office that there is a Judgment/Lien or Writ of Garnishment.

[minan]

You really need to determine if you have restarted the clock or not. Do not contact them.

Try to figure it out on your own. I believe if you contact them about your debt, that can cause the clock to restart. With amount of debt you have I am really surprised that no one has done anything.

[PHXDWTN]

On the statute of limitations, the 3 years is for the original debt to the original creditor, right? So if the original creditor sells it to someone else say 2 years later, that doesn't mean the 3 years resets, right? The new collector now has 1 yr to collect/sue from what I understand.

When does the 3 years start? Is it from the date that you are first 90 days late?

[PHXDWTN]

I decided to run my credit report/score on myfico.com tonight and got...

Equifax: 659 - Past Due: $49534 on 6 accounts - Collections: $482 on 1 account
Transunion: 619 - Past Due: $2,954 on 3 account - Collections: $50,509 on 7 accounts

[DYLAN150]

Thats not a bad score on Equifax considering the past due's and collections.

[PHXDWTN]

Thats not a bad score on Equifax considering the past due's and collections.

I thought the same. I'm guessing because the accounts are so old is why the score is so high?

All of my bad accounts will fall off in 2013 with the exception of one that was settled for less than full amount in a couple years ago. The statute of limitations on all of them has passed (3 years in AZ) so I just need to ride it out for a couple more years.
I was even accepted for a Capital One Business Credit Card not too long ago with a limit of $1500.

[LadyInTheRed]

To expand a little on the lawsuit that I did have against me that "fell off" now that I'm back home and can look through my files...

They sued me back in 2007 and I filed an "Answer to Complaint" in June 2008 as I was to appear in court. I had completely forgotten but I did get a lawyer who typed up the Answer basically denying their allegations. They in return filed a Motion for Summary Judgment in August and there was Pre-Trial Conference set for Sept. 2008 which I never attended. The case status is now "Adjudicated" and in January of this year I received a "Notice of Release of Garnishment" which I never even knew was in place honestly. Checking the County Recorder's Office against my name, there is no mention of a Judgment (and there used to be) so it looks like it's all cleared up.

EDIT: Looking at that Release of Garnishment, it actually lists that my bank, Chase, is released from all future obligations as to the Writ of Garnishment filed against Defendant in this lawsuit...so I'm not sure now if that means I am released as well. But again, nothing shows up with the Recorder's Office that there is a Judgment/Lien or Writ of Garnishment.

Sounds like the release of garnishment applies to Chase only. The creditor has 5 years to collect the judgment. If they don't collect within 5 years, they can renew the judgment every five years. So, without BK, that judgment could exist until you pay. This info is from http://www.mitchell-attorneys.com/le...s-enforceable/

[PHXDWTN]

But I can't find any record of a Judgment with the Recorder's Office. If I look up the case in the Justice Court's website, it says "Adjudicated".

What do you think?

[LadyInTheRed]

But I can't find any record of a Judgment with the Recorder's Office. If I look up the case in the Justice Court's website, it says "Adjudicated".

What do you think?

"Adjudicated" just means the case has been concluded. Unless there is something in the court record saying the judgment was vacated, set aside, satisfied or some other similar term, the judgment still exists if it is not more than 5 years old. After 5 years, check the court records for an "affidavit of renewal" filed by the creditor or its assignee.

A judgment does not have to be recorded with the county recorder to collect on it. It is recorded in order to perfect a lien on property. It doesn't need to be recorded to garnish your paycheck or levy on an account.

[PHXDWTN]

How do I find out if there is a Judgment if it is not recorded though? I have never received anything from their attorney that says I have a Judgment against my name. It does not show up on any credit report either.

My Experian credit report does show that on 11/11/2010, the attorney who filed the lawsuit ran a credit check on me, not sure why.