Collected research

I get to give all sorts of advice out here in Frederick, and usually have to do a bit of research to confirm what I think I remember about some of the issues presented. Here's some research on some of these topics, just so we all don't have to reinvent the wheel.

Minors and contracts:
We were horrified, in our office, by the result in Schmidt v. Prince George's Hospital, 366 Md. 535, 784 A.2d 1112 (2001). The holding in that case was that minors can be held liable for "necessaries" contracted for on their behalf. However, it did not apply to contracts for other than necessaries. Therefore, contracts entered into with minors are still voidable, and can be disaffirmed by the minor within a "reasonable time" after she attains the age of 21.  Upon such disaffirmance, the contract becomes null and void ab initio, and the vendor is bound to repay all money that he has received under the contract from the minor. The issues that have not been thoroughly determined in MD are what is a "reasonable time" after turning 21, and how is a contract disaffirmed by the minor. See Garay v. Overholtzer, 332 Md. 339, 631 A.2d 429 (1993), McBriety v. Spear, 191 Md. 221, 60 A.2d 528 (1948), Amey v. Cockey, 73 Md. 297, 20 A. 1071 (1891). And, of course, what the appellate courts would do with these issues on appeal is just frightening given Schmidt.

Procedures in District Court for wage garnishments:
Maryland Rule 3-646(j)(2)
(2) Within 15 days after the end of each month in which one or more payments are received from any source by the creditor for the account of the debtor, the creditor shall mail to the garnishee and to the debtor a statement disclosing the payments and the manner in which they were credited. The statement shall not be filed in court, but
the creditor shall retain a copy of each statement until 90 days after the termination of the garnishment proceeding and make it available for inspection upon request by any party or by the court. (3) If the creditor fails to comply with the provisions of this section, the court upon motion may dismiss the garnishment proceeding and order the creditor to pay reasonable attorney's fees and costs to the party filing the motion.

It appears that some creditors, like Ford Motor Credit Co. in one of my cases, don't bother to file the reports. If your client does get garnished, watch for this. I would argue that the garnishment would not be allowed to be reinstituted, though that is hardly a settled proposition.

Credit Reporting Agencies and debts discharged in bankruptcy:
There are only two cases dealing with whether or not a credit reporting agency can continue to list debts that have been discharged in bankruptcy. In re Vogt, 257 B.R. 65, 37 Bankr. Ct. Dec. 42, 5 Colo. Bankr. Ct. Rep. 57 (Bankr.D.Colo. 2000), and Learn v. Credit Bureau of Lancaster County, Inc., 664 F.Supp. 962 (E.D.Pa. 1987).
Both hold that the bankruptcy and the individual debts can all be listed for the 10 years following the bankruptcy discharge. This is because reporting the debt status accurately does not violate the bankruptcy code because it is not in any way an "act" to effect collection of the debt. 11 U.S.C.A. § 524(a)(2). Unfortunately, the same analysis probably applies to debts that have not been acted on within the statute of limitations, an argument I really like to
make, and that has convinced some credit collection agents to remove some debts from reports.

Originally posted 3/27/02

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