Legal Question in Credit and Debt Law in Georgia

You say "I have posted this question on several websites just trying to gather information." Let me stress: you CANNOT AFFORD NOT TO SEE A LAWYER. If your appendix bureast, would you cut it out yourself? Of course not, so why would you even think you could represent yourself in court against a doctor of laws that has seven years of college and graduate training in law?

It is possible that your letters themselves, if worded wrong, could have wiped out a SOL defense. You may have one, but if you fail to properly word and pursue it, you lose. You may have other defenses you also could lose. And if you were wrongfully sued outside the SOL, you may have a counterclaim that allows you to collect from the creditor.

You also, if you have other bill problems (and this one as well) may have bankruptcy as an inexpensive way out of economic problems.

A consultation will be free, or, depending on scope, likely not over $100. Treat this an an emergency, and see a lawyer in the next few days. That is far better than losing a case you might have won, and then seeing a creditor grab your wages and bank accounts.

It is a shame that you do not have proof.

Yes, there is a statute of limitation, but in GA its 6 years. So if your last payment was on or before 11/3/2006 then the complaint had to be filed on or before 11/3/2012. It just had to be filed on or before that day. You could have received the complaint after 11/3.

What you do depends on what you want to do.

If you have no assets and only get exempt income (like Social Security) then maybe nothing.

If you have a lot of debts (either this debt or a combination of other credit card debts) that total over $10,000, then maybe it would make sense to file bankruptcy.

If you have less than $10,000 in debt or can't file bankruptcy for whatever reason then you need to decide what to do in regard to the litigation. If you have defenses (like the statute of limitation) or the junk debt buyer did not present proof that they own the debt, or that you paid (you should be at least given credit for what you paid) maybe then you should litigate. Small claims court in GA goes up to $15,000. If you have a colorable defense, then it makes sense to file an answer. Small claims forms are online - here is a link to the small claims forms: http://www.georgiacourts.org/councils/magistrate/forms.html

You should file an answer asserting your defenses. It will at least delay judgment a bit. If you file an answer then you have to be prepared to go to the hearing and present your defense. Do not allege in your answer that you owe the debt! Especially if the debt was bought by a junk debt buyer. They have to prove that they have a right to collect - the burden is not on you to prove otherwise.

Assuming in a worst case scenario that the junk debt buyer recovers a judgment, the judgment allows them to seize your bank account, levy on any assets that are owned free and clear and garnish your wages. They can garnish a maximum of 25% of your disposable pay. However, if you are having your pay garnished already, then the amount they can get is going to be limited or even nothing. 25% is the absolute maximum but it depends on what you earn. There is a handy sheet here: http://www.dol.gov/whd/regs/compliance/whdfs30.pdf

If you don't want your pay garnished or assets seized (like your bank account) you can always work out a payment plan. Payment plans are on the full balance owed and are usually 1% to 4% of the debt. Most are between $100 and $300 a month, depending on the debt, what clients can afford and what the creditor wants. If the creditor wants too much, you can always say no and file bankruptcy.

Who is the creditor and junk debt buyer? If this is for a credit card debt, most creditors will settle for between 40% and 80% of the debt. I know you say you are of limited means, but very often when I tell clients that they have a way of scraping up the money. Creditors want that in a lump sum. They will not settle for that and let you do payments usually. If you have some of the money, some creditors will let you do what I call a term settlement where you put a good chunk of money down and pay the rest over 0-6 months.

I can assist you in preparing a small claims answer which you will file. I will not represent you in court. While I am GA-licensed, I live out of state and do not litigate. I can also assist in resolving the debt or working out a payment plan. My fees are reasonable - much more so that most attorneys. I give free email consults; I charge $50 for a 30-minute phone consult. I charge $150 to prepare a small claims answer and $150 to settle the debt or work out a payment arrangement - whatever you prefer. Please email me at [email protected] if interested. If you would prefer local counsel to actively litigate, that's fine. If you decide to go the bankruptcy route, then you need to consult with a bankruptcy attorney in your area.

The big thing is - not to panic. Getting sued is not the end of the world. What is important is that if you cannot afford to settle now, you have some time before the creditor tries to collect. Use that time to start protecting your assets, like bank accounts and start saving some funds.