The statute of limitations creates a deadline for a lawsuit to be filed in court.  The reasoning is twofold: (1) people should be free to shred or destroy documents after a defined period of time without fear they will be taken to court and (2) witnesses forget events and details as time passes.  Once the deadline passes, any lawsuit filed can be dismissed by the court and in some cases the party that initiated the lawsuit can be fined.  The law creates deadlines for the filing of most civil and criminal actions.  The deadline for non-governmental debt collection (credit cards, collection agencies, payday loans, medical bills and more) in California is four years.  That means if you have not made a payment on a credit card or collection account in more than four years, the claim is unenforceable in court.  Once a claim becomes unenforceable in court the creditor will not be able to garnish wages, take money from your bank account, or put a lien on your house.  If a creditor does file a lawsuit prior to the expiration of the statute of limitations, then you’ll need to take prompt action.  Failure to respond to a lawsuit will almost certainly result in a judgment against you.  A judgment creditor has many options and can pursue one or more of them simultaneously.  A judgment creditor can garnish wages and/or levy a bank account and/or put a lien on your house and/or summon you to court to discuss your assets.  Worse yet, a judgment will be enforceable for 10 years and can be renewed for an additional 10 years.  Credit reporting is a different but related issue.

Credit reporting has a different set of rules.  Most derogatory marks appear on a credit report for 7 years but many debts become unenforceable after 4 years if no payments were made.  This means a credit report is a helpful tool but it does not accurately reflect enforceable debts against you.  I commonly see people with a credit report showing numerous unpaid debts who assume they need a bankruptcy; my first question is, “When was the last time you made a payment on these debts?”  Bankruptcy voids most debts but is generally unnecessary if the debt is unenforceable as a result of the statute of limitations.

At the Law Office of Michael Primus we have helped thousands of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy.  If you live in Contra Costa, Alameda or Solano counties and have debt problems, contact us for a free in-office consultation.  We have offices in Walnut Creek, Antioch, and Hercules.

References: California Code of Civil Procedure §337, California Civil Code §1788.56 and the Fair Credit Reporting Act 15 U.S.C. 1681

 

I am often asked, “Can bankruptcy stop a wage garnishment?”  The fact is many people in Walnut Creek, Concord, Richmond, Pinole, Pittsburg and Antioch owe money they can’t pay.  Overwhelmed, they wait and worry about what might happen to them.  Most have tried to explain their situation to various debt collectors only to find humility and honesty all but ignored.  They learn to ignore form letters and automated calls.  Silently they carry the fear that one day their wages will be garnished.  Often that day comes when their employer notifies them that a portion of their check (usually 25%) will be taken to satisfy a creditor.  And not just one check, every check until the debt is paid in full with interest and attorney fees.  Yes, creditors can and do add interest and attorney fees.  Out of time and out of options, people turn to bankruptcy to stop the garnishment.

A bankruptcy is a federal court order that requires bill collectors to stop trying to collect most debts.  That includes stopping a wage garnishment from a collection agency like Rash Curtis, CACH, Midland Credit Management or Portfolio Recovery Services.  Once a bankruptcy is filed, a court order called the “automatic stay” goes into effect to protect the downtrodden consumer from his or her creditors.   The clerk of the court will notify all creditors by mail but a savvy lawyer will expedite noticing by calling and/or faxing the order to all “hot” creditors including a garnishing creditor.  At the Law Office of Michael Primus we go the extra mile to make sure a garnishment stops immediately upon filing of a bankruptcy.

Bankruptcy offers little or no protection when the debt being collected is for child support or alimony, or involves a criminal conviction.  Note: collection agencies often make false threats about having people contacted by the sheriff or even arrested.  Owing money is not a crime and failure to pay is not a criminal act.

This is a general discussion of the law and should not be relied upon.  Any person considering bankruptcy should consult a lawyer for a detailed discussion of his or her rights and options.

At the Law Office of Michael Primus, we have helped hundreds of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy.  If you live in Contra Costa County and have debt problems, contact us for a free in-office consultation.  We have offices in Walnut Creek, Antioch and Hercules.

 

Most of the time I carry some level of stress, and I bet you do too.  I feel useful and important when I am dealing with serious matters.  Of course, with serious matters come tension and concern which are friendly synonyms for stress.  My stress level goes down when I know how to deal with a situation even if it involves difficult tasks or short deadlines.  The converse is also true: when I am confronted with serious matters I am unable to properly address, my stress level skyrockets.  I think most people are similar to me in this respect.

Today I agreed to represent a man with serious financial problems.  He had always paid his bills until he became disabled a couple years ago.  Since that time he applied for Social Security Disability, and his claim is pending.  Most people do not realize it but the Social Security Disability approval process routinely drags on one to two years before the claimant gets a dime!  For this man, he exhausted his savings and incurred credit card and other debts to cover basic living expenses while pursuing his Disability claim.  As the months went by he went further and further in debt.  Then came the day he was unable to make the required minimum payments and his debts became delinquent.  Unfortunately for him, the stakes went up when he was sued by one of his creditors for failing to make monthly payments.  Very serious, very stressful.  The lawsuit was the last straw.  Does he need to go to court?  What should he tell the judge?  Something needs to happen, but what?  In additional to his financial problems he realized the months of waiting for Social Security Disability combined with mounting debts were causing him to shut down emotionally.

He and I agreed that knowledge is power.  I assured him I had the knowledge and we could work together to deal with his situation.  I explained the judge’s role in the collection lawsuit is to determine if  he owed the money, and inability to pay is not a defense.  The lawsuit is a civil action so he was not being accused of a crime and had no reason to fear going to jail.  As I explained the law to him I saw him start to relax.  We had not begun to fix his problems but already things were improving.

I explained that the bankruptcy laws provide debt forgiveness to people that can demonstrate a financial hardship.  To obtain that forgiveness requires quite a bit of paperwork and several appointments.  We put together a plan to get the papers together and scheduled his next appointment.  He told me that having a plan to deal with his finances eliminated the uncertainty and gave him a sense of control he had not had for many months.

Many people think my job must be depressing because I hear about people’s problems day after day.  In fact, my job is very satisfying because I solve people’s problems every day.

At the Law Office of Michael Primus we have helped thousands of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy.  If you live in Contra Costa, Alameda or Solano counties and have debt problems, contact us for a free in-office consultation.  We have offices in Walnut Creek, Antioch, and Hercules.