Legal Question in Credit and Debt Law in Massachusetts
law suit
I went through a difficult period (including unemployment and emotional issues)about 5 years ago, resulting in some substantial credit card debt. I had what was for me a very traumatic experience on the phone with a debt collector at the beginning of this ordeal and have avoided all contact with them since. I have been fortunate enough to have been offered some settlements which I have paid. There is one particular company that has not offered me a settlement that I can afford to date. I just recieved mail from them indicating a pending law suit. What does this mean? Will I literally be ased to appear in court? Could I potentially have my wages garnished? What about the statute of limitations?
I also received notification from The National Arbitration Forum regarding a seperate credit debt, stating an award has been made in favor of the claimant and that the case is closed. What does this mean?
I do believe I have a moral and financial obligation to attempt to make some payment of these debts. But I do not have a substantial salary and support myself as a single person. Any information or advice you could provide regarding these two related issued would be much appreciated!
Thank you in advance,
---M
2 Answers from Attorneys
Re: law suit
The statute of limitation for most consumer debt is 5 years in Massachusetts. The creditor often has the option of suing you wherever they have a store or office. That state may have a different statute of limitation. Many creditors now put a required arbitration clause in their contracts.
You should have gotten notice of the arbitration proceeding, usually accompanied by a large pile of paperwork regarding the rules and forms for replying to the request for arbitration.
You should have received a summons and complaint for the lawsuit, by mail if it was in an other state or in federal court.
In both cases, if you did not receive proper notice, you can have the case re-opened and have a hearing, but if you admit you owe the money, it is rather pointless. It would have been better to file for bankruptcy, since that would have given YOU control over repayment and stopped all interest and late fees. You can still do that, but if you wait until October 17, 2005, your income and expenses may require you to file a chapter 13 (repayment plan) rather than chapter 7 (liquidation, or true bankruptcy). The filing fees also increase, and many lawyers will increase their fees, even doubling them or more.
My current fee for a c. 7 is $750 and the filing fee is $209. After October 16, my fee will be $990 and filing fee is $243 for a c. 7.
Re: law suit
As regards the "pending law suit", that may be just a tactic to scare you. If they actually have started a law suit against you, they would have to have papers served on you by a sheriff or constable (or other process server). It is possible that you could have to appear in court and have your wages garnished. But if you were never served papers by a constable or sheriff, then it's probably just a scare tactic. As to the Arbitration, most (if not all) of the credit card companies now include a provision in the Cardmember Agreement saying that you agree to arbtitration is some distant state (often Ohio or Indiana, for some reason). You can refuse to agree to that, but if you do they will close the account. Arbitration is a valuable tool when used properly, but in my opinion, they are abusing it. In any event, you may want to consider a bankruptcy case. This would eliminate your legal obligation to repay your debts. So long as you are honest in your bankruptcy case, you can get a "fresh start" without all the harassment. If you have more questions, call me. David Baker
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
