What to know if you’ve used one credit card to the max and then stopped paying

And it continues :

“Please provide your written responses, signed under penalty of perjury, sending a copy to my office within the time limit set by the Massachusetts Rules of Civil Procedure.” “

That’s it.

I went to law school (please don’t hate me). Just reading the words “Rules of Civil Procedure” made me shiver. There are hundreds of rules of court procedure, grouped into categories, subcategories and subcategories. It is taught as a grinding course, throughout the year. The online version of the “rules” is 258 pages long. Learning it appeals to a very narrow segment of the human population.

I came across the letter while standing at the counter of a local courthouse researching the practices of debt collectors and their attorneys. I lingered there.

Why would the lawyer refer to the “prescribed” time limit in the rules of civil procedure when he meant “You must respond within 45 days”? (I looked up the rule.) Why “interrogations” when “questions” would have been enough? Why emblazon the letter with an eight-digit law firm file number (123XY345) at the top and bottom of the page?

I’m going to assume the lawyer was trying to intimidate the woman into cutting off all correspondence by agreeing to make monthly payments. This is what she did.

Did the system work?

Only if you are a debt collector.

The woman told me that she opened a credit card account years earlier, racked up thousands of dollars in debt, and stopped paying. It was wrong, and she regrets it. At first, the credit card company harassed her, but then passed out. She moved on. She is now employed by a non-profit organization (in fact two of them work seven days a week). She pays her rent, utilities and medical bills and is doing well.

Then “The Law” came knocking on the door. Not the credit card company – something perhaps more threatening: a law firm willing to use the law as a club. Today there are more lawsuits in Massachusetts courts over credit card claims than any other dispute – tens of thousands of them. Someone in your family, neighborhood, church, or workplace is likely named after one of them. Maybe you are.

The thing to know and convey is that you don’t have to be bullied.

If you are poor – earn less than $ 550 a week – or depend on Social Security, Veteran’s Benefits, or Disability Benefits, you may not be required to pay off certain debts.

No one can be forced to pay without the collector showing proof of the debt, such as the original agreement or payment history. And you can’t be forced to pay debt that’s been going on for more than six years without any activity on the account.

Debt collectors cannot call you home more than twice in a seven-day period, or more than twice in a 30-day period at a location other than your home, such as your home. workplace. But they can’t call you at work if you’ve asked them not to call you there.

They can’t call before 8:00 a.m. or after 9:00 p.m., and they can’t come to your house outside of normal waking hours, and then only once a month. (www.mass.gov/ago).

So there are protections for the indebted, but bad payers pay a high price in ruined credit. Don’t expect to get a mortgage or car loan with bad credit. And bad credit can haunt you when you’re trying to find a new job or a new apartment.

The road to good credit is all about paying off debt, but it’s hard to do when no one is going to lend you money in the first place. (You are entitled to one free credit report from each of the three credit bureaus per year; go to www.annualcreditreport.com).

Few credit card debtors end up in bankruptcy court. For one thing, it’s hard to navigate without a lawyer, which means it’s expensive. Additionally, many credit card debtors owe a few thousand dollars and have no real estate, bank accounts, or other assets to protect.

The advantage of bankruptcy is that it puts an end to attempts to garnish your wages or damage your assets. But for credit card debtors, creditors often don’t have much to do.

For those who go bankrupt, some debts can be discharged. This is about enabling debtors to get back on their feet, which necessitates “the needs of modern living” such as a motor vehicle, clothing, appliances and property. These are generally exempt (assuming they have not been pledged as collateral for a loan). But child support, alimony, and tax debts usually can’t be cleared by the court. Student loan debt can only be discharged when the debtor is facing the most serious financial situation.

Bankruptcy stays on your credit report for at least seven years in most cases.

The pace of credit card debt collection has accelerated in recent years due to a change in the “possible” of your debt.

Previously, credit card companies hired a collection agency. Not so much more. Now they are writing it off as a loss. Then they “sell” the debt for pennies on the dollar to buyers of corporate debt.

A debt buyer can spend $ 50 on $ 1,000 debt. This basically means that anything he collects above $ 50 – up to $ 950 – is profit. It is a strong motivation. Often times, they hire law firms like Waltham’s Lustig, Glaser & Wilson.

Lustig is a debt collection machine. In a recent five-year span, she filed 100,000 lawsuits in Massachusetts and raised $ 100 million, said state attorney general Maura Healey.

Healey pursues Lustig. In his documents, Healey portrays the company as pushing people who ignore their rights to make bad deals to get rid of dogs.

Lustig denies any wrongdoing.

The halls of some district courts are crowded with people waiting to appear in court for credit card debt. At Boston City Court one recent afternoon, about 50 cases were called. Lustig represented the creditor in about 80 percent of them.

No one seemed particularly happy to be there, except for a handful of volunteer lawyers, mostly retirees, offering free legal assistance to debtors (www.vlpnet.org).

Healey’s office usually sends a letter to debtors before their due date in court to inform them of available help. The letter stands out for its simple English approach. Here’s how the letter begins:

“It’s the Massachusetts attorney general’s office writing. Don’t worry, you’re not in trouble. We would love to help you! ”


Sean P. Murphy can be reached at [email protected] Follow him on twitter @spmurphyboston.