The other day Ronnie asked judgment he received on his credit report a couple of months ago. Even worse, this creditor (Capital One...one of the more vicious creditors out there) had taken money out of his bank account to collect on this new judgment.
This was a judgment and a credit account that I was completely unaware of. (We live separate lives so there's a lot of things I don't know.) Apparently he had been fighting with Capital One for years, unbeknownst to myself. He asked about how he could start the process of negotiating with Capital One to have this judgment removed.
I told him, "Don't negotiate anything. Not yet anyway!"
The first thing I asked him was if he was ever given legal notice of the impending judgement. By law, all creditors must give you notice that there is an impending judgement 30 days before they file a judgement against you. If they fail to do this, they are in violation of federal law, Rule 77; Notice of an Order or Judgment.
The second thing I asked was how much the judgment was and how much they took out of the bank account to use to satisfy the judgment. It turned out that they had hit a personal savings account that he was in the process of closing that barely had any money in it and it didn't satisfy even 10% of the amount they claimed he owed on the judgment.
Here are the facts:
1) He was never notified about the impending judgment as required by law.
2) Being that they took some money to satisfy his debt, this would not immediately reflect on his credit report as a payment being made, therefore the information being reported on his credit report would be inaccurate and thus ripe for removal.
How should he deal with this situation?
Unfortunately, calling their legal department right away to resolve the issue is the last thing he should be doing at this point.
The first thing he needs to do is dispute this judgment on his credit reports with all 3 credit reporting bureaus. This dispute will be based on their reporting inaccurate information due to the fact that the amount Capital One states he owes isn't the same as what he truly owes due to their taking money out of his account.
In about 4 weeks after sending off the dispute letters to the credit bureaus, the next course of action for Ronnie would be to send a certified letter to Capital One demanding proof of his receipt of the impending judgment 30 days before the judgment was entered, as per Rule 77. Furthermore, he would ask for proof that this credit account actually belongs to him including a signed credit application as well as other supporting documentation including credit card slips with his signature, etc.
Why not wait until after the investigative results come back from the credit bureaus?
Judgments rarely ever just fall off because vicious companies like Capital One will be "on it" the second they get the investigation request from each credit reporting bureau. If they have departments full of lawyers willing to not only waste court resources to file a judgment against you for a couple thousand dollars and take the time to painstakingly research where you do your banking just to end up with a paltry couple hundred dollars, they're certainly not going to suddenly drop the ball on the process by refusing to respond to an investigation request by any (and all) of the 3 credit reporting bureaus.
In fact, if you're in more of a hurry to get this crap off your credit report, you won't even wait the entire 4 weeks to send Capital One a letter. You'll wait only 2 weeks because by this point, Capital One will have already been notified of your dispute and they're already in the process of responding to the credit bureaus (if they haven't already by this time).
To be clear, it's important that you send Capital One (or whatever lame creditor put the judgment on you) a letter via certified mail. This means you are getting their wet signature on a little green card that will be mailed back to you once they sign off on receiving your letter.
So...what happens when Capital One sends you their bullsh** from their legal department giving you all of your requested documents and their "proof" of your account?
By this time you'll have received some type of response from the credit bureaus about how they've completed the investigation, blah, blah, blah...and that the crap will stay on your credit report for the time being.
By now hopefully the initial 30 days have passed because now you can file another dispute with the credit bureaus on this same account.
This time, when you send a letter to the credit bureaus, you'll be sending them a copy of the the certified signed card (and not the original) with a letter stating that the creditor refused to give you the information you requested in your letter to them. (Make sure you send a copy of that letter that you sent to the creditor.)
Here's the deal:
Even if the creditor did send you any one thing you asked for in the letter, it's unlikely that they sent you everything you asked for.
To be clear, here's what you're asking for:
1) Proof of your notification of impending judgment, as per the legal requirements of Rule 77.
2) Proof that you had an account with them in the form of a signed credit application and signed credit slips/receipts.
3) Proof of the exact amount they are claiming you owe including proof that they have given credit(s) of any amounts they've garnished or seized (if they have, in fact, done this); you also want proof that they've applied these payments to the amount they claim you owe.
Like I said, it's completely unlikely that they'll give you 100% of what you're asking for because it's impossible for them to drum up all this information in the very limited time frame they have. So, when you communicate with the credit bureaus in reference to not receiving what you asked for, you're not going to indicate that you received anything from them at all in response to your request. (You won't lie and say you received nothing but you won't indicate that they sent anything either; you'll indicate that "the creditor failed to provide the information as outlined" in the letter to them.)
Once this letter goes out to the credit bureaus (after the 30-day investigative period expires with the creditor; this will be 30 days from the date that they signed for your letter), you have to wait 30 days for the second investigation to occur and be completed.
Hopefully you will have a favorable response which will be that they will remove the judgment off your credit report.
In a couple of days, I'm going to tell you how to get this judgment off your credit report if you're unable to get a favorable removal after this second investigative period is completed.
By the way, now is the time to get all of your disputes out in the mail. Dispute every delinquency on your credit reports with the credit bureaus. The holidays are the best times to dispute because the bureaus are more lax in getting the investigations done on time, especially since creditors tend to drop the ball during this period due to having fewer employees on staff, more days off because of the holidays, etc. And federal law states that the credit bureaus must do the investigation in 30 days regardless of holidays, weekends, etc.
See you at the top!