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I have had an account with american express and paid the balance

in full each month for...
I have had an account with american express and paid the balance in full each month for about 7 years. My husband had major heath issues, and in 2007 he was placed on disability. We lost all of our income except for his disability check which is $1,900. a month. We got 3 month behind on our account with AX, which was then turned over to American Recovery Services. I agreed to pay $300. a month, about 2 years ago, which was taken out of my checking account.I never missed a payment during that time. My husband now is suffering with heart problems and we moved from one city to another to be close to his doctors all staying within the state of Louisiana. I closed my checking account in which the AX payment was being made as a debt each month. Not intentional. When I realized i was 3 months behind i promptly sent a check to the collection agency, explaining the situation. I sent them a check for $1,000. in which they promptly cashed. At the time the check was cashed, in April, I received a letter from The Edward Bukaty Law Firm saying they had taken over the account, I needed to get in touch with them & I owed them the past due amount of $954. I ignored this letter, knowing the collection company received the payment, cashed the check & assumed my account was still with them, now in good standing. I believed the Law Firm letter crossed in the mail about the time the collection agency received my payment & cashed the check. On Friday, I received a Citation from a sheriff from the law firm stating I need to reply to them and the debt must be paid in 30 days. Clearly, I do not have the funds. I do want to continue making the payments of $300. until paid in full. Because of a financial hardship, and records of medical history along with hospital reports, should i hire an attorney to represent us?? Also, because the collection agency took the $1,000. check, when it was suppose to be turned over to the law firm, can i dispute that my account was paid and was brought up to current status with the collection agency, therefore the law firm can not take over the account?? As of today, when the citation was served, my account with the collection agency was paid in full. My next payment is due with the agency on May 15th. I owe AX about $22,000. The law firm has added on $8,000. to handle my account which now puts me at $30,000. What is my legal options?? Since the collection agency took my money, can I claim they still own my account??? I want to pay my bill each month. I do not have $30,000. sitting around. I do have documents of my husbands illness, and medical condition and confirmation he is on disability. I do not want a fight, I do not want out of paying my bill in full. I want to be responsible, but need advice on who owns the account, can it be transferd in mid stream, & if then law firm is involved, can I ask to continue my $300.00 payment to them??? Please advise me on how to handle this in a responsible way and one in which all involved will feel satisfied. Do I have any legal grounds with the collection agency since they cashed the check & my account is current, if so I would hire an attorney to represent me and make that request to keep it out of the Law Firms hands and save me $8,000. in their legal fees. That is what I would like to do if Louisiana law allows??? Your help is greatly appreciated. I feel I have been thrown in to the lion's den. Thank you Terri
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Answered in 14 minutes by:
5/5/2013
Legalease
Legalease, Attorney
Category: Business Law
Satisfied Customers: 16,385
Experience: 14 years experience corps, LLC's and partnerships; preparation, negotiation of complex contracts and business agreements
Verified

Hello there Teri -

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Once an account is in default it is completely up to the creditor whether or not they want to permit you to make payments or if they want to turn it over to a law firm to try to place a lien on any property that you have and/or take the matter to court to see if the court can assist them to recover any assets that they believe you may have. There are no laws in LA or any other state that force the creditor to leave the case with the collection agency no matter how much you pay to them or when you pay it to them/ However, if your only income is disability payments each month and they come from social security or VA benefits, then even a court cannot attach those benefits and make you and your husband pay anything towards the bill. Under your circumstances it will not really give you any advantage to hire an attorney and will most likely just add to your expenses at this time. While a court can order you to make payments, if you receive SS or VA benefits the court cannot order any attachments and the most that the court can do is to order you to make a small payment every month within your means. Unfortunately, by the time it is finished because you agreed to pay court and attorney fees in your original agreement and the creditor chose that route of collection, the court will have no choice but to add that amount to the overall bill. My overall suggestion to you is to speak to a bankruptcy attorney in your area as soon as possible -- if your income is low enough (and it sounds to me like it is low enough) and you do not have significant assets, the bankruptcy court can completely wipe out all of your unsecured debts (which are generally credit card debts) and any outstanding medical bills that you may have. To locate a bankruptcy attorney you should contact your local Parish bar association -- they all have referral services and they will put you in contact with a few bankruptcy lawyers in your area and then you can speak to a few of them and go from there.

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Please let me know if you have further questions.

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MARY

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Customer reply replied 4 years ago

It is true our monthly income is $1,900 in SS disability. However, we own our home in full and still own shares of Regions Financial. The shares are worth about $195,000. at $8.00 a share. Currently they pay .1c a dividend. Can the law firm take that money from us?? That is all we have if we needed to cash it out for emergency medical bills?? Would I have to disclose that?? Do I have to show that money, or can I request monthly payments??

Hello again Terri -

-

A bankruptcy court would make you cash it out and pay all of your creditors. The only way you will get a chance at monthly payments is if you negotiate with the law firm and try not to disclose all of the assets -- so under those circumstances you may want to speak with a general practice attorney who handles creditors claims and see if the attorney can get them to agree to monthly payments without going to court. The assets in your case make all of the difference and in a regular court proceeding (if they sue you) or in a bankruptcy proceeding either court will make you disclose the assets and the regular court may make you cash it out to pay the creditor or at least a downpayment to the creditor -- but the bankruptcy court will definitely make you cash it out to pay all of your creditors. In your case, hiring an attorney may avoid all of this if you are able to keep it out of court. I wish I had better news for you on that and I do understand that it is unfair to make you cash these things out when you are willing to make payments -- but if they get any knowledge that you have any assets at all they can pursue the matter into court and make you cash out the assets to pay them before the assets are gone.

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Please let me know if you have further questions

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MARY

-

Please press the 3rd, 4th or 5th smile face below so I will be paid for my time. I am paid NOTHING unless you press the 3rd, 4th or 5th smile face below. Pressing a positive rating below will NOT cost you any additional money -- it simply acts as a trigger to Just Answer to pay me for my time. THANK YOU VERY MUCH !!!

Legalease
Legalease, Attorney
Category: Business Law
Satisfied Customers: 16,385
Experience: 14 years experience corps, LLC's and partnerships; preparation, negotiation of complex contracts and business agreements
Verified
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Legalease
Legalease
Legalease, Attorney
Category: Business Law
Satisfied Customers: 16,385
16,385 Satisfied Customers
Experience: 14 years experience corps, LLC's and partnerships; preparation, negotiation of complex contracts and business agreements

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