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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I live in Alabama. Due to serious health problems, I have been

Resolved Question:

I live in Alabama. Due to serious health problems, I have been on disability for 6 years and I have no other income. About 6 months ago, a creditor appeared and began aggressively trying to collect a 7 year old business debt for $26,000 which I believed to have been already paid. Also to my more recent surprise, I am about to inherit about $9,000 from a deceased relative. I do not have a car and would very much like to buy a car, which I very much need. If I do buy a car, can't the creditor get a judgment and attach a lien which would force the sale of the car with the proceeds going to the creditor. To avoid that, my first thought was to file bankruptcy but my understanding is that Alabama law would only allow me to protect a total of $3,000 in personal property if I filed. I have nothing of value at present. If I don't buy a car, I will have $9,000 show up in my bank account. While the creditor can't touch my disability income, any inherited income could be taken. My basic question concerns whether there is any way I could purchase a car and protect it. If not, is it legal to deposit the inherited amount in my sister's account. She is very well to do and I trust her implicitly. Do I understand my situation correctly and what is the best course of action to follow.
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

cfortunato :

Hi JACustomer,

Customer:

Hello

cfortunato :

The Statute of Limitations for this type of debt is 6 years in Alabama. This means it is too late for the creditor to get a judgment for the debt.

cfortunato :

It also means the creditor cannot touch your assets.

cfortunato :

This means the creditor would not be able to touch your inheritance or any car you purchase with the inheritance.

cfortunato :

However, you should be mindful of the fact that the Statute of Limitations will start to run all over again if you voluntarily make any payment to the collection agency for this debt.

Customer:

OK, I understand that.

Customer:

I have not received an answer.

Customer:

Or, I can't find it if you have sent it.

cfortunato :

I explained that it is too late for the collection agency to get a judgment for this debt since it is older than 6 years, which is the Statute of Limitations for debt collection in Alabama.

Customer:

Where is my answer, please?

cfortunato :

Do you see anything I wrote?

Customer:

I have to check on the exact date of the debt and when the statute would have begun to run.

Customer:

Nothing except on the SOL.

cfortunato :

The SOL starts to run from the date of default - which is 30 days after your last payment.

cfortunato :

However, if the creditor is still able to get a judgment, putting the money in your sister's account will not help, as this can be viewed as a "fraudulent transfer", and the money can then be taken from your sister's account.

Customer:

What about the purchase of a car?

cfortunato :

Just a second - I will check the statute for motor vehicles.

Customer:

When I click on "Get Your Answer," it says that it is loading but nothing loads on the page.

cfortunato :

The motor vehicle exemption for Alabama is $3,000. This means if your car is worth more than $3,000, a judgment creditor can sell your car, give you $3,000, and keep the rest.

Customer:

Yes, I explained that in my question as I already understood that.

cfortunato :

Those are the only questions I see.

cfortunato :

Is there anything else you would like to know?

Customer:

Did you get my original question?

cfortunato :

Yes.

Customer:

How do I find the answer to that?

cfortunato :

You asked if you could put the money in your sister's account, and also if you can purchase a car.

cfortunato :

The only other asset that is protected in Alabama is one's homested - with a $5,000 exemption applicable to one's homestead. I know you don't own a home, so this does not affect you.

Customer:

I just would like to read the original answer, please. I am not trying to be disrespectful.

cfortunato :

You also asked what is the best course to follow. There are no other options for debtors in Alabama.

cfortunato :

Here is my original answer:

cfortunato :

The Statute of Limitations for this type of debt is 6 years in Alabama. This means it is too late for the creditor to get a judgment for the debt.





5:48 PM



It also means the creditor cannot touch your assets.






5:48 PM



This means the creditor would not be able to touch your inheritance or any car you purchase with the inheritance.






5:51 PM



However, you should be mindful of the fact that the Statute of Limitations will start to run all over again if you voluntarily make any payment to the collection agency for this debt.



Customer:

Should I write the creditor a letter stating that the statute of limitations has run and I do not wish to be contacted further?

Customer:

Or should I just ignore them as best I can?

cfortunato :

Yes - if you notify them in writing to stop contacting you, they must stop or you can sue them in Small Claims court every time they contact you after you tell them to stop. So,. it is a good idea to send the letter Certified Mail Return Receipt Requested.

cfortunato :

You can also explain that you know that the SOL has expired for this debt, so you know they cannot legally collect it.

cfortunato :

You can sue them for $1,000 for every time they contact you after they receive your letter.

Customer:

OK, thank you very much for your information and advice. It is very helpful.

Customer:

I apologize for my confusion when I could not find the answer.

cfortunato :

You're welcome. Please don't forget to hit the ACCEPT button. Thank you!

cfortunato and 3 other Bankruptcy Law Specialists are ready to help you

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