Credit Card Debt

[Maddox]

I was called from a law firm representing HSBC and was told that if I didn't come up with a certain amount to settle a credit card debt out of court I would be charged with trying to defraud a financial institution. The card in question was taken out in my name but I never had it. It was done almost 10 years ago and now I have to pay. If I don't come up with the settlement money they will take me to court and put liens on anything that has my name on it. Do I have any recourse as I cannot afford to pay all this. I am not in a financial position to do so.

[Algie]

.  Therefore, if you are really sued by this firm do not ignore the court action, as they will get what is called a default judgment against you.  Default judgments are a collection agency and collection law firm's dream, as they do not have to prove their claim in court and are free to add illegal interest, costs and attorney fees.  I would recommend you find an attorney in your area that practices consumer law.  It sounds like you have a good case against this agency.  Under the FDCPA you do not have to pay your attorney anything to take this case, the FDCPA states that if you win your case the collection agency has to pay your attorney's fees.  Good luck, don't hesitate to ask any follow up questions.

Jason Shear

Attorney at Law  

[Parisch]

Cheryl:

Your recourse is that you do not have to pay this bill.  If your last payment on this card was really a decade ago, the debt is past the statute of limitations.  The SOL is any law which fixes the time within which creditors must take legal action to enforce rights or else the debt buyer or creditor can not enforce them.  Most states have a SOL of 3-6 years with only R.I. having a 10 year SOL on credit cards, which are considered open accounts when determining a state's SOL on old credit card debt.  

With regards to this firm stating that you are going to be charged with "defrauding a financial institution" is not true.  Defaulting and not being able to pay a credit card if not fraud, as this is just an illegal attempt by this firm to scare you into paying something.  

If this debt is past the SOL, which it probably is, then this organization violated the Fair Debt Collection Practices Act(FDCPA) by threatening legal action against you which it can not take such as stating they are going to put liens on your property.  Also, if the last payment on this debt was 10 years ago, HSBC is probably not the law firm's client, it is probably a debt purchaser who bought this debt for pennies on the dollar.  Original creditors such as HSBC charge off bad accounts after 180 days of the last payment and then usually sell the account off at a reduced price several months later to a debt purchaser/collection agency.  These people hope to turn this investment into a big profit for themselves by trying to get a consumer to pay much more than what the debt purchaser paid for the debt by using threats and harassment.  

It looks like to me that you are actually in a good position with regards to this matter.  On one hand they are trying to collect a debt that can not be won in a court of law, however by threatening action that can not be taken, you can sue this law firm as well as their client(the debt purchaser) under the FDCPA, which would entitle you to money damages.  Be sure to keep notes of when they called and write down in a journal or notebook the threats they made in order to supplement your FDCPA action against this company.  In addition, keep all the letters that they send you.  

Lastly, I would like to point out that just because the debt is past the SOL, it does not mean that an unethical collection agency or law firm won't sue you on this account.  It just means they would not win their claim in court.  A SOL defense is what is referred to as an "affirmative defense" that has to be raised by the defendant/consumer in their