Legal Question in Credit and Debt Law in North Carolina

Consult with a bankruptcy or debt defense attorney. It is impossible to give you any meaningful advice without a full review of your financial situation.

I have lots of advice but a public bulletin board is not the place for it. I agree with Attorney Love that you need to sit down with an attorney and map out a strategy - what you do depends on a lot of information that you do not convey.

When you obtained the card is not relevant. When did you last pay on it? You indicate this was a business card. Was the card in the business name? Did you personally guarantee the debt? Was the business incorporated or an LLC? What happened to the business? Was it dissolved if a corporation or LLC?

You indicate that you received a summons. Who is the creditor? American Express? Someone else? Who is the law firm? Zwicker? Or someone else? When did you receive the complaint? Is the complaint just against you? Or the business? Does the complaint reference the date on which the debt was last paid? If not, do you know?

What you do depends on a bunch of variables. Assuming this was a business card, you may have signed a personal guarantee of the debt. If the business is defunct, you would still be liable on a personal guarantee.

American Express or any junk debt buyer has 3 years from the date of the last payment to sue you. If it is someone who bought the debt from American Express who is suing, there are extra requirements regarding documents which must be attached to the complaint. Are these documents attached?

If its been more than 3 years since you last made a payment, or if the debt was sold to a junk debt buyer and the required documents are not attached, then you would need a debt defense lawyer to draft an answer for you and hopefully get the case dismissed.

If the lawsuit is timely and there are no other valid defenses, then getting a lawyer to litigate may not be the most productive use of your money. How much is owed? If over $10,000 or if you have other debts in combination with this debt are over $10,000, maybe you should consider filing bankruptcy if you can file under chapter 7 of the bankruptcy code. If all the debts are yours only, then just you needs to file; your spouse does not need to be part of that. It costs on average around $2000 - $2500 to file bankruptcy (this includes filing fees, fees to get a credit counseling certificate etc.). Of course fees will vary from attorney to attorney so shop around. If you think bankruptcy would be an option, then see a bankruptcy attorney now. Debts in litigation are easier to discharge if no judgment has been entered yet.

If your only option is to file a chapter 13 bankruptcy or if you really do not have enough debt to make it worthwhile, there are other options here, but it depends on what assets you own and how they are titled.

A judgment is not the end of the world - it can be managed and the debt resolved later. The question really is not whether you can be sued but whether American Express will have the ability to collect on any judgment. NC has fairly generous exemptions. Should a judgment be entered, the creditor would try to collect by first serving you with documents called a notice of rights to have exemptions designated and motion to claim exempt property. Those papers are important and should not be ignored. By completing the exemptions properly, you would be able to protect all or a significant portion of assets depending on what you have.

If your spouse did not sign the personal guarantee, then your spouse is not liable and she cannot be sued and nothing of hers can be taken in satisfaction of a judgment entered against you. If you own a house or car jointly with her that also cannot be taken, although the judgment would act as a lien on the property.

However, since your wife gets disability, there can be no joint bank accounts between you and your wife. She needs to have her disability go into a bank account solely in her name. You do not need a bank account and you should not have one if you are going to allow a judgment to be entered. If you need a bank account, it should be only in your name and should preferably be at an online bank, or at a credit union or at a very small community bank located 25-50 miles from your house (not a bank account at a major bank like PNC, Bank of America, Sun Trust, Wells Fargo or Regions). You would want one without lots of ATMS or branches.

If you are interested in non-litigation non-bankruptcy options, please email me at [email protected]. I can more thoroughly review your situation; email consults are free. There is a charge of $75 for a 30 minute phone consult. Please email me for more details.