AP filed

[despritfreya]

Sounds like the creditor made a mistake. It meant 40 not 20 months. Check with your attorney.

Des.

[reynold975]

We got the threat letter about 3 weeks ago. The ap was filed last week. This is what they want us to sign agreeing to a settlement. The wording (judgement) etc I don't understand either.

[sh9730]

First, it sounds to me like they have already filed the AP - AND - recieved a judgement? I thought your other posts on this said they had filed, but it had not yet been litigated. Now it makes sense that the lawyer tells you to just settle!

I cant help you on this question though...doesnt make sense to me....

[reynold975]

AP filed/settlement question

I read through the paper work a little closer today. It states as a proposed settlement 1. The sum of $3,000.00 owed by Defendant to Plaintiff is found to be nondishchargeable and plaintiff is granted judement against defendant in this amount.
2. The non-discharged sum of $3,000.00 shall be paid as follows: the sum of $75.00 per month, each month for 20 months, commencing 7/15/2011. The remaining payments shall be due on the same day of each month thereafter. While not in default such principal shall not bear interest. My question $75.00 x 20 = $1,500.00. Does that mean I only have to pay $1,500? It goes on to say 4. in the event defendant defaults on payments, plaintiff shall be entitles to declare the sum of $3,000, plus any interest, immediately due and payable, together with plaintiffs reasonable attorneys' fees and cost incurred.

[tobee43]

i agree with that as well. i most certainly wait until the ap is actually filed by the creditor.

[sh9730]

HHM,

After reading here for awhile now, I agree that it often makes sense to wait until the creditor actually files like you say, but what I was saying is that responding to the scare letter saying the debtor wouldnt pay "until" you filed left more of an impression that the debtor may pay if you file, whereas completely ignoring the letter may not have ended in the same result. No way to know for sure either way though of course.

[tobee43]

i understand that this creditor called the OP's bluff. i just think it's sad that one cannot really apply logically, any real problem solution thinking when trapped. of course, i personally would not bite or chew off my leg to get out of the trap. however, it's still difficult to sit in that trap until one is forcefully released by it's preditor...oh!!!! i mean creditor. ( i know that's a gross analogy). but....

[HHM]

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!

The problem for the OP is that the creditor called their bluff. It happens. The OP's attorney did nothing wrong, it is usually what I recommend, make the creditor file the AP. From the creditor's attorney, they are thinking, is this person really going to invest $3,000+ in defending a $4,200 claim...the logic goes both ways...and this creditor attorney decided to call the bluff and see what happens. Now the OP must decide what to do, defend or settle.

[tobee43]

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!

[despritfreya]

. . . 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.

[tobee43]

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?

[despritfreya]

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.

[tobee43]

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.

[debee]

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.

[sh9730]

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.