Michigan has a statute of limitations on debt collection of six years (with certain, limited exceptions).  Say you have a balance on a credit card, fall on hard times, and six years goes by without a) you making a payment on the account, or b) the creditor filing a lawsuit against you.  Under Michigan law, you now have a defense to any future debt collection lawsuits they might be thinking of filing!  If you're sued, and you timely and appropriately assert that the statute of limitations has passed (the "this debt is time-barred" defense) in your answer, you just may well win your case!

But there's a catch ...

If the creditor can convince you to pay something - anything - on that old debt, the six-year period starts all over again!  They know this, and they count on the fact that you probably don't.  So, they try to trick you.  All of the sudden they're nice to you. They play on your emotions.  And, they pander to your sense of right and wrong. 

This is how they do it ...

Check out the notice one of our clients recently received in the mail, below.  Did y u forg t somethi g?  Cute, right? 

This client lost her job in 2009, and has suffered from major medical issues since.  Because she hasn't been able to, she hasn't made a payment on this debt since November 2009. She lost her house, and although things are starting to look up, she's struggled every day since then. Isn't it great that they agree that our client deserves a second chance?  That might be one thing Savage Legal Group, PC and Midland Credit Management, Inc. agree on.

But as to this client, this debt is time-barred. MCM can't sue her, and they can no longer report this on her credit report. Note the "charge-off" date on page 2.

So, what happens if our unwitting client calls them up and accepts one of these "generous" options so that she can "put this debt burden behind her"?  After all, she does want to regain her financial freedom! 

We won't hold you in suspense. If our client pays these debt buyers anything in response to this "offer," she'll be back on the hook for the full $9068.58 balance!  If she signs up for Option 2 or Option 3, and then misses a payment, they can and likely will sue her.  And that doesn't sound much like "putting this debt burden behind her" or "regaining her financial freedom."

Unless your financial situation has dramatically improved AND your conscience is really bothering you (because you never paid Citibank), don't fall for this dirty, rotten debt-buyer trick!  Put this "offer" in the circular file, where it belongs!

One final note: we added the highlighting to the CFPB-required notice.  We are quite confident that MCM would never deliberately draw your attention to that language!

If you've recently filed a Chapter 7 or Chapter 13 bankruptcy case, you're probably wondering what to expect at your upcoming Meeting of Creditors (also called a "341 Meeting," or a "Section 341 Meeting").   So long as you've completely and accurately disclosed your assets and liabilities, this meeting with your assigned Trustee should be brief and cordial. 

Here's what to expect ... and how to prepare.

Where is My Meeting?

First, make sure you know where you're going.  Depending on where you live, your meeting will be held in Lansing, Kalamazoo, Grand Rapids, Traverse City, Marquette, Flint, Ann Arbor, Detroit or Bay City.  We've provided specific instructions, details and directions to many of the Michigan meeting locations here.  

How Should I Dress?

The Section 341 Meeting is truly a meeting - although it is recorded, it is not a court hearing.  For that reason, professional attire is not required.  We prefer that our clients come to the meeting in "business casual" clothing, if possible.  That being said, a number of our medical professional clients have appeared in scrubs (because they've come over on a break from work), and that is just fine.  Bottom line - dress comfortably and respectably, but don't dress up.  Keep in mind, too, that you'll have to go through a metal detector - you might want to leave belts, heavy jewelry, shoes containing metal, etc., at home.

What Do I Need to Bring With Me?

You must bring a government-issued photo ID, as well as acceptable third-party proof of your Social Security number.  In English, that means, you should bring your driver's license and Social Security card.  You will need the photo ID for two purposes - to get through security, and the Trustee will verify your identity with it.  Once your meeting starts, the Trustee will use your Social Security card to verify the Social Security number on your filed bankruptcy petition.  NOTE: The Trustee cannot hold your meeting without acceptable proof of your Social Security number!  If you can't find your Social Security card, let your attorney know as far in advance as possible!

You must also bring copies of any paperwork or documents that the Trustee or your attorney has specifically asked you to bring to the meeting.  Your attorney (at least in our office) will bring your file, including your copies of your filed documents.  You should also be able to expect that your attorney has provided the Trustee with a number of documents in advance of the meeting.

What Should I NOT Bring With Me?

Leave your cell phone(s) and electronic devices in the car.  Non-attorneys are not permitted to bring these items into many of the federal buildings.  If possible, leave your children with a sitter. Don't drive an uninsured vehicle to the meeting, and again, don't dress up!

What Should I Do When I Get There?

Review our "Where is My 341 Meeting?" bankruptcy FAQ for building-specific information. Chances  are, we'll be there waiting for you when you get there.  If not, peak inside the meeting room to see if the Trustee has set out any paperwork.  If so, grab copies, and start filling out any questionnaire.  Have a seat outside the meeting room (if seating is available), or sit in the meeting room itself.  If we're not there when you get there, we'll be there and will find you shortly.  If you're early, feel free to listen in on meetings scheduled before yours.

What Happens When It's My Turn?

There will likely be several parties waiting for meetings with the same Trustee.  The Trustee will call each case, one-by-one, usually in case number order.  Often, there is a schedule posted outside the meeting room, if you're curious about where you fall in the order (understanding that the posted order isn't always strictly followed).

When your case is called, approach the Trustee with your attorney, and take a seat where the Trustee (or your attorney) indicates.  Hand over your photo ID and Social Security card, along with your completed questionnaire (if applicable).  Prepare to speak audibly - remember, the meeting is recorded - and remember to answer all questions with a yes, no, or narrative answer. Try not to shake your head in response, and avoid "uh-huh" and responses like that.

What Will the Trustee Ask Me?

The Trustee's job is to carefully review your bankruptcy petition and schedules, and to ask you questions about anything they might feel requires confirmation or clarification.  They will also ask you a list of required questions.

A typical meeting goes like this:

• The Trustee will review your identification and then record a statement similar to this: "I have reviewed a Michigan driver's license and the name on the license matches that on the petition.  Further, the photo appears to be that of the person seated in front of me.  I have also compared the number on a Social Security card, and it matches the number on the petition."
• The Trustee will then ask you to raise your right hand, and swear to tell the truth under penalty of perjury.  The Trustee will likely ask you to state your full name and address.
• Then, the typical meeting proceeds as follows:

  • Trustee:  "At some point in time, you met with Ms. Savage, and discussed the filing of a bankruptcy petition.  Isn't that right?"

  • You: "Yes"

  • Trustee: "Did Ms. Savage explain the various chapters of bankruptcy to you?

  • You: "Yes"

  • Trustee: "And you and Ms. Savage decided to file a Chapter 7 bankruptcy petition?"

  • You: "Yes"

  • Trustee: "Did you provide Ms. Savage with all the documents and other information that she needed to prepare your petition and schedules?"

  • You: "Yes"

  • Trustee: "And when your paperwork was ready, you met with Ms. Savage and signed that paperwork in a number of places?"

  • You: "Yes"

  • Trustee: "Did you carefully review the paperwork before you signed it?"

  • You: "Yes"

  • Trustee: "And when you signed the paperwork, was it true, complete and accurate?"

  • You: "Yes"

[The Trustee will typically show you several pages of your petition at this point, and ask you to verify your signature on each of those pages.]

Then, depending on your individual circumstances, the Trustee will ask you a series of additional questions, for example:

• Have you ever filed a bankruptcy case before?  If so, when?
• Other than the property you've listed on Main Street, have you owned any other real estate in the past six (6) years?
• How did you determine that XXX asset was worth $XX?  (NOTE: Your attorney will likely assist with the response to this question.)
• Do you have a family support obligation?  (NOTE: The Trustee is asking if you owe anyone spousal or child support.)
• Does anyone owe you any money?
• Could you sue anyone for anything?
• Do you stand to inherit any money?  
• Has anyone ever put your name on any property for estate planning purposes?
• Have you transferred any property to family or friends, or sold anything for less than what it's worth?
• Within the past two years, have you repaid any money you've borrowed from family or friends?
• Is your home/car currently insured?
• Have you been involved in the operation of a business in the past XX years?

How Does the Meeting End?

If the Trustee is satisfied with the questioning, the Trustee will likely tell you, then and there, that the meeting is closed.  If the Trustee still has questions, or if the Trustee determines that additional documentation is necessary, the Trustee may "Continue" the meeting.  If the meeting is continued, a follow-up date is set.  The Trustee will let you know if the follow-up date is set for control purposes, or if he/she will ask you to return for additional questioning. 

How Long Does the Meeting Take?

Your total wait time will depend on where you fall in the order.  Once you're called to the table, the meeting typically lasts no longer than 10 minutes.  Plan on being at the meeting for approximately an hour - then you won't be disappointed if you're first in line, and out of there in 15 minutes!

Will my creditors be there?

They might be.  They get notice, can appear if they want to. If they do appear, they can ask you questions while you're under oath.  In our experience, creditors come on occasion, but most of the time they don't.  We tend to see credit unions appear more often than any other type of creditor. Most of the time, they are interested in knowing what you plan to do with a financed vehicle. We've never seen a credit card company at a Section 341 meeting.  If your creditors come, answer their questions truthfully.  If their questions are inappropriate, your attorney (or the Trustee) will object.

No one likes to receive a call or letter from a debt collector.  But if they're calling you, or worse yet, they're calling your family, your neighbors, your employer, here's what you do. 

First, understand that you have rights under both state and federal laws.  

Second, follow the advice of the Consumer Federal Protection Bureau, and take all of these steps if and when contacted:

1. Don't divulge any information!  Again, DON'T DIVULGE ANY INFORMATION!  If the caller is legitimate, he/she shouldn't need any additional information from you, including your phone number (they called you, right?), your address, your employer, where you bank, etc. Divulging information will only assist the creditor in suing you, or if they've already done that, in garnishing your wages, your state tax refund or your bank account.

2. Get identifying information from caller, and if he/she refuse(s) to give it to you, hang up! There are many, many scammers out there, just fishing for information! But even the legitimate collectors can be (and usually are) rude and pushy, and we know you might feel a bit guilty. Understand that they're trained to play on that. But also understand that employees of legitimate collection agencies have no problem divulging their own names, along with the name of the agency they work for. Get a mailing address, too, and a return phone number.  If they're being rude or pushy, politely tell them that you're not going to respond to their questions unless and until they give you all of this information.  DON'T BE INTIMIDATED!  

3. Make them tell you what they're calling about.  Say, "I'm willing to discuss this with you, but I need some information from you first." Then, demand to know, a) The name of the original creditor; and b) the amount they believe you owe them.  REMEMBER, you're in listening mode right now.  DON"T DIVULGE INFORMATION!

4. Thank them for their call, but tell them you're not about to make an immediate payment. Tell them you need to check your records first. Then, terminate the call. If you have to, simply hang up.

5. While it's fresh in your mind, make detailed notes about everything that is said.  Also, before it gets overwritten, note what is displayed on your caller ID, as well as the date, time  and duration of the call. 

6. Devise a strategy.  If the debt is legitimate, understand that you're likely going to have to deal with it, one way or the other. Worst case, you might be sued.  But even in that event, you have options. Understand, too, that you might have defenses, that if not asserted, you might inadvertently and unwittingly lose.  For example, making a payment on time-barred debt restarts the running of the statute of limitations.  All that being said, if the debt is legitimate, and you have no defenses, a proactive approach is probably best.  For example, if you have other debts, and you know that you won't be able to dig out within the next couple of years, then filing for bankruptcy can afford you the fresh start you need. Investigate that option - it might prove to be better for your credit score, and your personal bottom line, in the long run.  On the other hand, if this is the the only debt you're concerned with, then perhaps you can work out an affordable payment arrangement with the creditor before they resort to litigation.  

Finally, understand that regardless of which route you take, you don't have to suffer the constant collection calls and you can insist that they stop.  Let us know if we might be of assistance, whatever your strategy might be.

Lady giving her credit card number to a collections scammer calling on the phone.

A former bankruptcy client called the other day - a single mom, struggling to work and raise her young kids.  She sounded scared, but she told a story I've heard so many times before.  She'd just hung up with a bill collector, who told her that she owed money on a loan from 2010, and that if she didn't immediately pay, she would be arrested later that day.  Fortunately, my client remembered me telling her that she should not pay any debt that was owed prior to the date she filed her Chapter 7 case. Instead of giving the guy her debit card number, she wrote down his name and number, and called me.

There is a whole lot wrong with this phone call:  1) a creditor cannot threaten to have you arrested if you don't pay a debt, and in fact, it's illegal if they do; 2) a creditor can't refuse to validate a debt, as this one did; 3) a creditor cannot mislead you in any way; 4) even if this debt was valid, it was time-barred (so it was improper for the caller to threaten to sue my client, when he should have known he couldn't); 5) my client received a Chapter 7 bankruptcy discharge in 2015, so even if the debt was originally valid, it was a violation of the bankruptcy discharge injunction to attempt to collect it now.  The list goes on.

At any rate, I told my client to take a deep breath, and to trust me that this was a scam. I implored her not to worry, and not to pay this company anything!  To further ease her mind, I called the number back, and to my surprise, someone answered the phone.  However, when I identified myself as an attorney and simply asked for the agency's mailing address, the representative ("Diane Lane?") said that she wasn't authorized to release that information, and hung up on me!  

Reputable collection agencies do not act this way. Collection agencies that do act this way are subject to sanctions, and can be held liable for your attorney fees if you challenge them on their illegal behavior. If you receive a call like this, make careful notes on the details of the call - date, time, number, name given, and exactly what the caller said.  Then, call us to discuss what you can do about this inappropriate and unlawful creditor behavior.  

On behalf of this client, we're looking for you, Pittman, White & Associates, at (515) 309-2177.  If you actually exist, and we manage to find you, we'll be addressing the way you harassed our client!