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    AP filed

    We received the Ap complaint/filing from the cc companies attorney. The total charges made between 4-6 months before filing are 4,200. They are offering $3,000. no interest $75.00per month. repayment plan. Any advice. Should we fight it, pay it. They are alleging that we had no means to pay it back at the time it was charged. But at that time we had expanded our business to meet the needs of a customer that was to double our income. Then it just never materialized/delay, delay, delay. We just moved into our new facility in September. It wasn't until Jan that we realized we was in trouble. We had emptied out our 401k to pay the business expansion cost. It may still happen some day, but who knows when. Should we send an ap response, make a lower offer to settle. I'm afraid our attorney isn't the brightest blub in the box. So I'm kinda of nervous even asking her advise.

    #2
    some will say, try and settle. i would get another atty to do your ap...we did. and we won. our bk atty was excellent, but young and not really experienced with many ap's and we were told by that firm we had to pay the creditor. i knew that was not the case and so we had to hire someone else to handle the situation.

    i know here in florida the courts are fairly firm about the 90 day period when it comes to ap's. in other words unless the charge was made within that 90 day period the creditor has no claim....unless they have proofs of intentional fraud. i would also check your state laws if your are filing under your's state's guidelines and if your filing federally, also check that as well. actually the 90 day rule is suppose to be everywhere, however, i have seem creditors that still attempt a fight.

    it's hard to prove fraud. they would have to prove you purposely and knowly and with intent of not paying, committed fraud, in many courts that's difficult to prove.
    8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

    Comment


      #3
      This is not an amount that will be cost effective to fight if you retain an attorney. Your legal fees will most likely exceed the amount in controversy. Offer them $1500.00 and settle for $2250.00.

      tb43 - out of curiosity, and if you don't mind. . . how much $ was in controversy in your AP and did you recover attny fees?

      Des.

      Comment


        #4
        Des,

        It it typical for the creditor attorney to actually send notification of the filing AND a settlement together? I ask because maybe this letter was just one of your beloved "scare" letters that they INTEND to file the AP unless the OP settles...

        OP, are you sure they actually FILED the AP, as in you were notified from the court.....they can get very clever with the wording in their letters. Makes a big difference in how you proceed. Based upon other similar threads Des (our pretty amazibnly helpful atty here on these forums) would say make sure they actually FILE the AP first. They may never do so, especially on 4K in debt over 4 months old....

        Right Des?

        Comment


          #5
          No, they did file an ap case. It is a legal form with a proceeding number. They had already sent the threat letter. Instead of ingnoring it, my attorney called them and told them we wasn't going to pay unless they filed an ap. So they filed. We told her to just ignore the letter and see what happens. But she didn't.

          Comment


            #6
            Originally posted by despritfreya View Post
            This is not an amount that will be cost effective to fight if you retain an attorney. Your legal fees will most likely exceed the amount in controversy. Offer them $1500.00 and settle for $2250.00.

            tb43 - out of curiosity, and if you don't mind. . . how much $ was in controversy in your AP and did you recover attny fees?

            Des.
            Unfortunately, I concur. But as sh9730 points out, make sure the AP is actually filed.

            If the AP is filed, start by offering $1000 ($1050 is 25%). Propose what ever payment terms that you can actually afford, but go no higher than $2,000. It really is not cost effective to defend, or at least, to hire an attorney to defend.

            If the AP is NOT filed, and you feel your side is strong, do nothing. Or, if you want to see where they stand, offer $500 and see what happens.

            Comment


              #7
              Reynold975, not only will your legal fees to fight the AP likely exceed the amount at issue, but if you lose, you could wind up having to pay the creditor's attorney fees too. Definitely not worth the gamble. Settle!
              LadyInTheRed is in the black!
              Filed Chap 13 April 2010. Discharged May 2015.
              $143,000 in debt discharged for $36,500, including attorneys fees. Money well spent!

              Comment


                #8
                @sh9730,

                Caught your post after Reynold responded. You are correct if we were talking about one of those "letters". Quite frankly it is surprising, at least to me, that an offer to settle was sent at this stage. This tells me the creditor is not sure it has a case and is using the "cost of litigation" to extort $. I can see this tactic working and will be interested to see what the future brings regarding such issues. Maybe we are seeing the beginning of a new trend.

                Des.

                Comment


                  #9
                  Des,

                  Maybe...hope not. I have some "questionable" charges but they are spread out over many cards and none add up to tooo much (though could be 3-4K on a gien card!) so Im hoping I will be ok...I will know soon as my 341 is Friday. But, on this particular case, as the Reynold said, their atty made (if the OP has the correct version of the conversation) a tactical error by saying the debtor would only pay if an AP was filed. Would have been better to say nothing I believe and see what they do on their own.

                  If I get any letters, that is what I will instruct my attorney to do, just IGNORE them.

                  Comment


                    #10
                    Sometimes it can pay off to have your attorney address an AP threat letter. For instance, if at some point after incurring some debt you suddenly and unexpectedly lost your job, your attorney could indicate as much in a letter and potentially stave off the AP filing.

                    eta: But care must be taken. The idea is to provide facts that would undermine the creditor's position in terms of proving false intent/fraud without doing anything to undermine your own.
                    Last edited by debee; 05-29-2011, 04:36 PM.
                    There are two secrets for success in life:
                    1.) Never tell everything you know.

                    Comment


                      #11
                      Originally posted by despritfreya View Post
                      This is not an amount that will be cost effective to fight if you retain an attorney. Your legal fees will most likely exceed the amount in controversy. Offer them $1500.00 and settle for $2250.00.

                      tb43 - out of curiosity, and if you don't mind. . . how much $ was in controversy in your AP and did you recover attny fees?Des.
                      while our situation was different, as it was not that the creditor was claiming we commited fraud, but it was a question of whether the amount in question was a secured debt or unsecured.

                      ours was well worth the flight, since we were dealing with 55k on an unsecured bank business loan ( actually not exactly "unsecured", the loan was secured by receivables), and since there were none, we knew it was not a secured debt. it cost us approx 1k to fight the ap, and we won, as i had all the loan documents claiming or proving this was NOT a "personally" secured loan, and was clearly secured to the limit of the companies receivables. to add to the the complications of the situation it was also a loan signed by both business partners and so both of us were considered responsible for the amount in it's entirety as opposed to 1/2 the balance.

                      we recovered and were awarded all the atty fees and court cost. i know and understand this type of situation apparently is not the norm or typical when dealing with a ap, and one needs to weigh out the pros and cons. of course had the amount been far less we may and most likely would have settled as it would not have been worth the cost factor.

                      also, i have heard these high amounts to fight an ap, while ours was 1k, that may be because really, there was nothing for the atty to do other than to present our proofs...it was cut and dry, if i recall, i think the atty said it took about 10 minutes after our loan docs were summited and reviewed by the court.
                      Last edited by tobee43; 05-30-2011, 05:04 AM.
                      8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

                      Comment


                        #12
                        Originally posted by tobee43 View Post
                        but it was a question of whether the amount in question was a secured debt or unsecured. . . since we were dealing with 55k on an unsecured bank business loan ( actually not exactly "unsecured", the loan was secured by receivables), and since there were none, we knew it was not a secured debt. . . and we won, as i had all the loan documents claiming or proving this was NOT a "personally" secured loan, and was clearly secured to the limit of the companies receivables. . . we recovered and were awarded all the atty fees and court cost. . .
                        Interesting. The secured v. unsecured not only turned on the terms of the loan but, what about a recorded UCC? As to the legal fees my guess is that you were awarded them since the dispute arose out of the interpretation of a contract and the terms of the contract gave the prevailing party the right to attny fees. (There might have also been a State statute allowing for the awarding of fees in a contract dispute.)

                        The problem with dealing with a 523(a)(2) matter as it relates to a consumer debt is that the debtor only gets fees if the action had no substantial justification. Many courts have interpreted this to mean that if a debtor "wins" they are not entitled to recover fees unless they prove no justification for the action. Such is a very tough burden and the Travelers decision did not help. On the other hand, if the lender wins the lender gets the fees as the underlying debt arose out of a contract which typcially provides for payment of fees in an effort to collect and per Travelers, can be recovered. This is "ass backwards" and is the fallout of Travelers.

                        Des.

                        Comment


                          #13
                          indeed....Section 2-207: of the ucc....aka : "battle of the forms" (LOL!) it may have had to been part of the argument had it gone that far. however, we know that the ucc filings in themselves are not, the actual contract of agreement between the parties. the filing really is just notice to the world that one person claims that it has an interest in someone else's property, usually as collateral for a debt.

                          i do believe the fee reinbustment was under a state statue. one i don't recall off hand, however, the court was not happy their time was taken up with something as clear as the nose on ones face.

                          that term "no substantial justification" is what seems to be so much in question nowadays. if the law clearly states that fraud is or should be consider under such circumstances, etc., or the court finds that this charge was clearly outside that "90" day magic number, and the court finds no fraud was commited how can the court withhold recovery of the atty fees if the court finds in the favor of the debtor?
                          8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

                          Comment


                            #14
                            Originally posted by tobee43 View Post
                            . . . that term "no substantial justification" is what seems to be so much in question nowadays. if the law clearly states that fraud is or should be consider under such circumstances, etc., or the court finds that this charge was clearly outside that "90" day magic number, and the court finds no fraud was commited how can the court withhold recovery of the atty fees if the court finds in the favor of the debtor?
                            Because it is a question of fact and since "reasonable minds" can differ, it becomes very difficult to prove there was no substantial justification - especially when dealing with an institutional lender as opposed to a vindictive and litigious creditor.

                            Des.

                            Comment


                              #15
                              really des, are there truly any "reasonable" minds left...LOL!!

                              although, as difficult as it is to prove there is no substantial justification, isn't fraud just as difficult to establish? one would like to think the court views everyone the same. i guess not, many times even if you have it in black and white.....even then, it seems many times it can be turned into a muddy gray.

                              edit: just personally, i hate seeing these lenders doing this to people. it's like being blackmailed into paying them. you just give up your rights and say oh well, it's cost effective not to fight the bigmonster so let them just eat me....wai! firstt let me add a bit of salt and pepper so i taste better while they swallow me up!
                              Last edited by tobee43; 05-30-2011, 06:24 AM.
                              8/4/2008 MAKE SURE AND VISIT Tobee's Blogs! http://www.bkforum.com/blog.php?32727-tobee43 and all are welcome to bk forum's Florida State Questions and Answers on BK http://www.bkforum.com/group.php?groupid=9

                              Comment

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