Charge Off Now Sueing

[Justino]

In 1995 I had a automobile loan through Wells Fargo. My girlfriend was the primary borrower and I was the co-signer.     About 6 months later our jobs took a turn for the worst and we were in financial distress. My girlfriend called Wells Fargo and explained the situation and Well Fargo said to see what next month brings and then give them a call. The following month was not any better so she told them that she was voluntarily giving the vehicle back because she could not afford it and it was now 2 months behind. Every week she would call Wells Fargo to try and arrange the voluntary surrender, they refused. It sat parked at our house for 6 months. It was after we told them it didn't have insurance on it before they came and got it in the middle of the night. Wells Fargo never contacted me(the cosigner)to see if I wanted to take it over. Wells Fargo resold it at a  private sale a month later and sent a letter stating we owed $16,000 which was the balance from the sale of the vehicle. Wells Fargo refused payments, they needed a lump sum in full. A few months later they assigned it to a collection agency. For some reason all mail pertaining to this acct was being addressed to me and not my girlfriend. I received 1 "dunning" letter from them and never heard anything else. A few months later I received a call from Arrow Financial/ProLine Solutions. Dealt with a guy named Jim. In the meantime I enrolled in a credit repair program and directed Jim to deal with them. Jim was requested to provide proof of debt including proof of original signature, beginning balance, ending balance, late fees, etc. Jim stated that he had to get the paperwork from Wells Fargo and it would be 7-10 days before we would have them. My credit repair program then sent several requests for proof of debt. No proof was ever received. We then sent cease and decease letters with the last one mentioned suing if they continue reporting without giving us the proof we are asking for. While this is going on Wells Fargo has marked the acct charged off as bad debt/$0 balance. We even received a letter from Wells Fargo stating they no longer hold this acct/debt that all letters and contact concerning this debt is to be addressed to Arrow Financial/Proline Solutions. Then out of the blue a few weeks ago we received a call from a Greystone Alliance LLC in NY claiming they were hired to collect this debt for Wells Fargo. I asked for a "dunning" letter and proof of debt. I received the dunning letter but no proof of debt. I then called them and asked where my proof was and they didn't understand what I was wanting. I explained and they have yet to send one. Greystone Alliance calls several times a day and even went to the extent to call CitiFinancial Group(financial lender) and tell the lady my credit report, scores, what this was pertaining to, amount I needed to pay this debt, and all my other personal info. The guy at Greystone was trying to find a loan for me so I could pay them the money they were requesting...I never gave him permission to do this, he took it upon himself to do it. The last time I talked with Greystone the guy(and I quote)said to me "Mr White, you better get yourself a real good lawyer because I might sue you just so I can come down to Michigan and watch you go down" Isn't this a violation of my privacy? What are my rights concerning this debt that Wells Fargo charged off and has a $0 balance. What rights does Greystone Alliance have? How can they sue me(the cosigner) without going after the primary borrower first? Greystone Alliance has refused to work out a suitable payment plan. They wanted $8000 by the end of November, then they changed it to I had to pay $8000 within 24 hours or they are going to take me to court. I am now waiting for court papers...and contemplating filing bankruptcy if I receive them.  Thank you for your time and hope you can give me info on this mess.

ANSWER: Hello Louis:

I don't understand why you are dealing with this at all.  1995?  And why would this is still within the statute of limitations!???  Do you have a judgement against you already?  Michigan statute of limitations(SOL) appears to be six years.  The only way they still have a legal right to collect this is if they initiated legal action within that time period or the account was "tolled."  Tolling basically means that time stops or holds still for some reason.  Very rare in a case like this.

If it is outside the SOL and they sue you, all you have to do is show up, prove the debt is beyond the SOL, and the case is dismissed automatically.

In the interim, send them a letter stating you want all future communication to be in writing to your address and INCLUDE your address.  You don't want them sending notice to a wrong address, you don't show up, and then get a default judgement against you.  Send it certified mail and keep a copy.

Your only risk is if this is still in the SOL.  That could only be if you are wrong on your dates, they initiated legal proceedings before then, they have a judgement against you, or it was tolled for some mitigating reason.

To answer your specific questions:

*  They are under no obligation to go after the primary borrower.  You are the co-signer.  They can go equally after either or both of you.

*  Greystone probably bought the debt from the other collection agency - Arrow.

*  Wells Fargo is just reporting the zero balance because they charged it off and sold the debt to a collection agency.  It does not help you legally or say you don't owe the debt.  It basically an accounting procedure.

*  I'm sure Greystone would LOVE to work out a payment plan with them since it appears you legally don't owe them a penny due to the SOL issue.

*  Obviously don't file bankruptcy!  You likely don't even owe this debt.

*  They comments about suing you could be deemed a violation of the Fair Debt Collection Practices Act(FDCPA) which prohibits collection agencies from using intimidating, unfair, or deceptive practices in collecting a debt.  I don't know what to make of the the issue of them calling Citi.  In both cases you would have to file a federal lawsuit and prove it.  What evidence do you have and do you want to go there?

BTW, nothing should be reported on your credit reports.  They should stay on for seven years and you are obviously past that.  If either collection agency is still reporting, THAT is a major violation of the FDCPA worthy of filing a lawsuit.  You should get your credit reports and check with local court to make sure there is no judgement against you.

Good luck, verify it, but it appears you are on solid legal grounds.

Regan

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---------- FOLLOW-UP ----------

Hello again, after reading your response I realized I made a mistake on the dates, the car was repoed in late 2005/early 2006....I am sure that makes a difference.

[Garrity]

Hello:

It's obviously a HUGE difference!  They can now still sue you legally and get a judgement.  Your options are to pay it, negotiate it, avoid it and hope they don't sue, or fight it by getting proof of their violations of the law to offset your debt and/or prevent them from suing.

Much of my first reply still applies as to the methods and options you have.  You are just at much greater risk, so proceed with great caution or great aggression.  In between often doesn't work as well.  

Hope that helps.

Regan