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Being Sued by Bank of America?

Credit Card Debt discussions & tips

Being Sued by Bank of America?

Postby casimiro » Tue Apr 05, 2011 8:50 am

O.k., so my roommate is being sued by BoA. He had a credit card that came with his bank account when he first opened it 4 years ago. He used the credit card, but he also kept up with the payments and finally decided to pay it off and close his account. The last statement he received 4 years ago said he owed around $25. He paid that and closed everything down.

Now he's being sued because the bank is trying to convince him that the last statement he received was outdated and he had additional charges on the account that he never paid off. Thanks to his high interest rate, the amount he owed was allowed to sky-rocket for all that time, and BoA is claiming he owes them around $1400 plus legal fees which takes his bill to over 2 grand. He has a minimum wage job and can barely afford to pay his half of the rent as well as feed himself. Whoever spoke to him about payment plans he can use to pay off this debt said that he could make an initial payment of $500 and monthly payments of $250 until the debt is payed off.

He can't pay his half of the rent, all of his bills, and these monthly payments all at the same time, and I don't know what to do. I've been trying to help him contact legal aid, but apparently it's more complicated than it has to be because he lives in a different county than he used to bank in.

Does anyone have any advice? This whole thing sprang from a tiny mistake, and now the bank is letting him have it.

Thanks
casimiro
 
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Being Sued by Bank of America?

Postby jonam » Tue Apr 05, 2011 8:57 am

Is it actually BoA or is it a collection agency? My guess is that it's a collection agency.

Was this an actual credit card or was this a debit card attached to his bank account? Did he receive additional statements showing money due? How did he close the account? Was he smart enough to get written confirmation that the account was closed and 0 balance? Does he at least have the last statement that showed a balance?

If he actually has some written proof that the account was closed and 0 balance, he can just send a certified, return receipt letter to the collection agency telling them that the account was paid and closed. Request that they provide proof of any additional charges.

If the collection agency does come back with some proof of additiona charges, not just accumulated interest and fees, then you may want to negotiate a settlement. You should be able to settle for less than 25% in a lump sum payment. Forget about payment plans. Better to save up for a lump sum offer. Get any settlement agreement in writing and do not give the collector direct access to your bank account.

Before you send any letters to the collection agency, check your state's Statute of Limitations (SOL), the timeframe to bring lawsuit:http://www.bcsalliance.com/y_debt_sol.html. Typically the SOL starts from the date of last activity or last payment. If this debt is beyond the SOL, you can tell the collection agency to go pound sand. If they continue to bother your, send a certified, return receipt letter telling them to cease all contact. They have to stop but may sell the debt to another collection agency. You would have to send another cease letter to the next collector.
jonam
 
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Being Sued by Bank of America?

Postby bardulph » Tue Apr 05, 2011 9:04 am

Careful.....the SOL is 4 years from date of last activity, NOT account opening. I also find it really hard to believe $25 could mushroom into 1400.
bardulph
 
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Being Sued by Bank of America?

Postby hennessy » Tue Apr 05, 2011 9:11 am

He is being taken to the cleaners if what you are saying about his balance is true. While it is common for someone to get additional interest after they pay their balance, there is NO way in heck he should owe $1400 ! That's just stupid! (and probably illegal!)

Tell your friend NOT to accept any offers to pay $500 now and some more every month.

You say he is being sued...did he actually get a summons? Or, is he just being called or written by a collection agency that says they "may take action against him..." LOL

Sounds like a zombie debt collector who is hoping to scare the little change your friend does have, out of his pockets! haha
hennessy
 
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