having been written off by mbna my friend thinks he is going to be sued for the amount.?

Question

i told him if it was a write off it means an insurance claim was placed on the account. i think he has no need to fear litigation. true or false?

Answer 1

MBNA actually listed his account as a "charge off", which means they feel there's no chance of getting this money back. It's an accounting technique that allows them to treat his loan as a business loss, and they are now free to use the amount of his loan in making other loans.

The debt has been sold to a collection agency, who will do whatever they can to collect on this debt. Just tell your friend to send a "do not contact me" letter to the collection agency. It will make his life easier.

Litigation is probably not in his future, unless he owed a very large amount and he has assets they can sue for.

Each state has its own statute of limitations concerning debts, and after a certain amount of time (3-6 years) the debt is no longer legally enforceable, although it will be listed on his credit report for the next 7 years.

Answer 2

Wrong for a different reason. MBNA had already written off the amount he owed so they no longer have a claim against him. Whether they had insurance to cover that I doubt but it will not effect what happens next. However there are companies called Zombie Debt Collectors who will buy the bad debt from MBNA for pennies on the dollar. Then they try to collect the money that the bank gave up on. They will do that even if the debt is very old and legally worthless. They try to bully the debtor into giving them money. They will go to small claims court and lie by saying it is a current debt. When they get the judgment there they will hire a bailiff to deliver a warrant and attempt to put the debtor in jail to force him to pay. If you send them any money they will have reopened the debt and it becomes a valid new debt that they can legally pursue for the full amount.

If you get a call or a letter from someone asking for the money that was already written off do not even have a conversation or an exchange of letters with them because that will bring the zombie debt back to life.