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Barrister
Barrister, Attorney
Category: Bankruptcy Law
Satisfied Customers: 34813
Experience:  16 years practicing law. Landlord 26 years
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I live in Texas. I have a lien showing on my house from 2006

Customer Question

I live in Texas. I have a lien showing on my house from 2006 that was not released after the lien holder reduced my balance to 0 in 2012. Because of my own fault of misplacing the letter that the judgment reduced to $0 and that it is still showing in the courthouse records as open; When I was contacted by a law firm about a different lien and thought it was the one that was released (that I forgot about) I contacted them to pay the money owed. What happened is a paid them money for an old debt that the legal limitation had expired. Have I just learned a horrible lesson about not managing my life responsibly or can I get that money back and use it to settle the open lien? The same company took over both debts.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Barrister replied 1 year ago.

Hello and welcome! My name is ***** ***** I am a licensed attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply, but rest assured, I am working on your question.

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Have I just learned a horrible lesson about not managing my life responsibly or can I get that money back and use it to settle the open lien?

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Did you file bankruptcy and have the lien discharged?

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Or did the lender just voluntarily forgive the balance on the loan?

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Did they ever notify you that your balance was showing up as zero owed to them when you contacted them?

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Did they send you a 1099-C for cancellation of debt income when they forgave the debt?

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How much are we talking about here?

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thanks

Barrister

Customer: replied 1 year ago.
I did not file bankruptcy nor did I receive a 1099. I was advised by a lawyer that it was best to just take my chances than to file for bankruptcy at that time it was all credit card debit. I received a letter in 2012 stating that an adjusted balance was applied to the balance which reduced my balance to $0. I didn't do anything with the letter I put it in a file and forgot about it. This the original creditor was Citibank. The judgment was for around $3,500,I just paid them a settlement payment of $698. it was $20% of the balance owed.
I was sent a letter by a collection law firm referring the lien I had on the house was coming up for the 10 year judgment renewal. That I needed to settle it before that time or they may file an abstract of judgment, wage garnishing or start an investigation against me. I called them but thought it was some bogus claim because I thought the judgment that I had was from Citibank. I have several unpaid credit card bills which had been written off by the companies and were removed from my credit report 7 later. The debts were sold off to companies and they have continued to send me letters past the 7 years. I thought it was some of the same tactics.
It made me start thinking that I needed to take care of the liens and try to get settlements so they would not be renewed.
I remembered that I was sent a letter in 2015 offering me a settlement of one of the debt for Citibank. The lien was not mentioned in that letter. I looked for the letter and I contacted the company asking if I could still work out a settlement. They no longer had the paperwork in their office but said they would contact the client and see if they could get it back.
Which of course they did.. And I paid $698 to settle the debt. Then called back several days later asking how I would go about getting a release of the lien. They said there was no lien .. and I said it was showing on the court records.. So I searched further found the letter about the release and also went on line to the courthouse records and found no release for that lien.
At that time I realized that the law firm that originally contacted me was correct and they do have a lien on my house..
I called the company checking on the status of the balance owed on the judgment and they said it had been adjusted but by an error the release was not sent to the courthouse.
The company that does have the lien on my house has a judgment of about $5000.
I don't have the money.. I need to try to negotiate a settlement with them.. of course, since I paid my money to the one that didn't have the lien on my house..
I know that I morally do owe the money. But if the judgment was satisfied to $0 does that mean they were collecting a debt that was settled and I legally can get the money back to pay the actually lien?.I did initiate contact with them. I don't want to pursue this if it is pointless.
Thanks you for your help ..
Expert:  Barrister replied 1 year ago.
I think that if they zeroed out the debt that you would have grounds to file suit against them for the return of the money based on the legal doctrine of "mistake" and "unjust enrichment ". When they forgave the debt, it is gone. They can't reinstate it once it is gone. So your account should show a credit balance since it would have been at zero to start with. The question is whether it is worth the effort and time to sue them over $700.Thanks
Barrister
Customer: replied 1 year ago.
I imagine the fees for hiring a lawyer would take away anything I would win in a settlement. I just wanted to know where I stood legally. I will call them and see what happens. Thanks so much for your help! Have a good night! I feel better having talked with you. :)
Expert:  Barrister replied 1 year ago.

That is correct. No attorney would even consider this for under $1500-2,000 and there is no guarantee of getting your attorney fees since this is not a malicious action on the part of the creditor.

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So I think you are taking the right path....talk to them, see if you have a credit balance and request a refund. If they don't show a credit, explain the situation and state that you will have to file suit if you can't get this cleared up since they were paid in error.. But if that still doesn't work, then you have to make the decision about whether you want to try and sue them in small claims court on your own or not..

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thanks

Barrister