Bizarre Collections Problem

Hi and thanks for any potential help – I’ll try and make a long story short. This starts in WA state.
- Divorced guy (me) dates separated woman in process of divorce from man with no conscience who throws her out in street with nothing (she didn’t know her rights, legal immigrant with green card – citizenship in process)
- ex hires expensive law firm for the obvious reasons
- Woman, having nothing, borrows money from friend of friend, “who is a really nice Christian old man” for her lawyer’s retainer.
- After divorce, woman, now engaged and living together with me, shows me bill from “really nice Christian old man” (hereinafter referred to as loan shark). I tell her after viewing the obvious in the invoice, that she’s getting ripped by a “loan shark”.
- Woman tells me not to worry about it - she will take care of it.
Brief interruption to describe woman – Asian, well-educated, very intelligent, compassionate and a huge weakness compounded with gullibility- totally freezes at any confrontation. Ex-husband, in 1999, uses this vulnerability to settle divorce leaving her with $11,000.00 (on more than 250,000 dollars of net worth gained together during their marriage). Woman, understandably scared to trust anyone, refuses my offers of help and makes a big mistake causing her to be responsible for more than 20,000 dollars in credit card debts. (talk about a bad lawyer). Consequently, she filed for bankruptcy in 1999. Kind old loan shark assures her that he will work with her. She feels obligated to kind old loan shark, takes him at his word and does not include him as a creditor on the bankruptcy. (Unbelievable, but all true. I’m kicking myself for not being more forceful)
- woman, now called wife (of 7 years), and I move to FL. in June of 2002. Prior to moving, wife calls loan shark about remaining balance, unbeknownst to me, in February of 2002. She tells loan shark she’s moving to Florida. She also tells loan shark of financial difficulty. At the same time she paid the loan shark some but not all additional funds owed to the balance. Loan shark, “nice old man”, verbally tells her balance is forgiven. Trusting, gullible wife neither asked for, nor received written verification.
- When we moved to Florida, we left a forwarding address with the post office. Wife also stayed in contact with friend who referred her to loan shark and our phone number and address is listed. The point is she thought it was settled and we have never hidden from anybody.
- Fast forward to November, 2007. She gets a collections notice. The original loan was for $2,500.00. She has written proof of paying $1,700.00 and is looking for additional eight plus year old documentation that would show she has paid more than 3000 dollars. The collection bill is for more than $16,000.00!! She finally broke down and told me all of this Monday, January 05, 2008.
- She did write them on November 12, 2007 disputing the debt and requesting documentation of the debt assignment as well as itemization of all additional charges. Their only response was to send another bill with accumulated additional charges, which we assume to be interest, with no explanations. Yesterday, January 6th, we faxed and sent certified mail renewing our intention to dispute, a second request for an explanation of ALL the charges and assignment of the debt as well as indicated all future communication had to be in writing.

<<I swear I’m trying to make this short.>>

My questions so far are:
- didn’t the loan shark have an obligation to make a reasonable effort to find my wife during all this time of accumulating, compounding interest?
- the original promissory note was signed on November 7, 1995. I am not a lawyer and I have a very difficult time reading and understanding legal text. However, I did find the following:

Washington Statutes of Limitation
Written contracts and accounts receivable: 6 years, (RCW 4.16.040).
Oral contract: 3 years (RCW 4.16.080).
Recovery of property and judgments: 10 years, (RCW 4.16.020).

Am I understanding this correct? When does the statute of limitations start? Is this all moot and we’re scared to death about nothing?

I’m very sorry about the length of this. We appreciate any input you can offer. We have always been hardworking, law abiding, honest and helping people. My wife and I have never been unemployed, but now, being in the mortgage industry, we have both been unemployed since April 2007. Even though neither one of us had any involvement with subprime mortgages or bad loans, we have been heavily impacted. We cannot afford a lawyer and we have no means to travel back to Washington. We are not behind on our bills, but we are really, really scraping.

We would be so grateful for any guidance you might be able to offer. Thank you for your time and attention.
:wallbang:

The statute of limitations begins to run upon the date of the default - UNLESS another payment is made or the debt is acknowledged as valid. that resets the clock.

The clock started ticking again in February of 2002, when your wife made contact with the loan shark again - six years ago. Unless Washington law provides for tolling (pausing) the statute of limitations when the debtor moves out of state, it would appear the statute of limitations has expired. (Check this with an attorney. Many will give a free 15 minute consultation.)

If it has expired and did not merely pause?

Gather up your documentation (hopefully your wife has found the other receipts?), pull your wife's credit report, and dispute the debt with all three credit bureaus.

Then inform the collector that the statute of limitations has expired.