Tag Archive | defense

Statute of Limitations for Credit Cards

What is the Statute of Limitations for Credit Cards in Pennsylvania?  We get calls asking this question every day.  In most instances, the statute of limitations on a collection claim in PA is 4 years.  There are a few exceptions, namely for Discover and Capital One accounts, which may be only 3 years.  Discover and Capital One may have different (and lesser) statutes of limitation due to the contract that they include with their accounts.  Not every contract has the same language, but some of them do.

When does the Statute of Limitations start?  The SOL starts when the account or claim goes into default.  Default occurs when you fail to make a payment, in most instances.  As an example, you make a payment December 31, 2009.  The next payment presumably is due on January 30, 2010.  If you fail to make that payment, then the statute clock starts to click.  If there is a four year SOL at work here, then the claim against you would have to be filed by January 30, 2014.  If the claim is filed after that date, then the claim may be “time-barred”.  Time barred simply means that a claim is too late, it does not mean that the collector cannot sue you.  What I mean is that time barred lawsuits are filed every day.  You cannot simply call up the collector and say “this is too late, drop it”.  That phone call is rarely going to work.  Instead, you are going to have to assert your defenses to the lawsuit by filing a responsive pleading.  Then, you may have to go to a hearing or have a motion for summary judgment scheduled.  The point being made here is that many people believe that if the lawsuit is too late, they can either ignore it or they can simply call the court or opposing attorney and ask them to withdraw the case.  I can say that rarely is an effective maneuver.

If a credit card collection action is filed against you and you think that the SOL has run, you should consult with a consumer attorney right away.  The action of filing a claim after the SOL has run is illegal and is contrary to the Fair Debt Collection Practices Act (FDCPA).  This can result in you filing a claim against the debt collector who sued you.  Such a lawsuit would entitle you to up to $1000 in statutory damages, plus any actual damages, plus recovery of reasonable attorney fees.

Posted in Lawsuits

Go It Alone? Bad Move on a Credit Card Lawsuit

I had a conversation with a gentleman yesterday that I have had numerous times with other potential clients.  The caller asks for a case review, which we are always glad to offer.  He was being sued by Portfolio Recovery Associates for about $7000, which is alot of money.  I discussed the claim in detail, explaining what needed to be done and what we could do for him.  Based upon what we discussed, I was nearly certain that I would win the case if hired.

At the end of the phone call, the man said that he was going to file his own answer. Even though I hear this all the time, I am still very shocked each time it happens. I explained to him that filing an answer was the wrong move, that he was making a very large, possibly fatal mistake, and he said that was still what he was going to do.  I explained to him that filing objections on his case would be the proper move, and he said that he would add the objections to his answer and that he was confident that the court would honor them.

The first question that I have, that remains unanswered, is why did you call an attorney if you are going to ignore their advice?  The second question that I have is why would you risk so much money when you have a guaranteed winner if you hire a consumer attorney?  The third question that I have is why do you think that you can learn what I know by spending an hour or two on google?  Obviously, I will never receive answers to my questions…. This gentleman kept insisting that he was making the right move, that he knew all about “standing” and other legal concepts.  I did ask him why he called my office if he had no intentions of hiring an attorney and he clearly felt that he knew more about the law than I did, and his response was that he just wanted to see what an expert would say.  Well, the expert spoke and the expert says that he is going to lose, GUARANTEED.  It is inevitable that in 3-4 months this gentleman will call me up and ask me how much it costs to file an appeal because he got crushed at the arbitration hearing.  Well, sir, the fee is much higher to handle an appeal than it would be to handle the original case, because now I have to try to correct the mistakes that you made, and that will require extra court appearances…

Look, I know my job and I know credit card law. I know every case and I know how most counties handle these matters.  I know the proper response and the proper defenses.  I know how to defend you  and protect your rights and interests.  You may be smarter than me, obviously there are many people who are smarter than me, but there are very very few, if any, who know Pennsylvania Credit Card Law better than me.  You cannot go onto google for an hour or two and think that you are prepared to defend your case, especially when its for $7000.

You don’t want to represent yourself on these cases for many reasons.  You don’t know the proper response to the lawsuit.  Even if you did know what it was called, you don’t know how to draft and present it.  You don’t know how each collection agency or attorney handles things, what their procedures and tendencies are.  We craft defenses based in part on what is in the complaint and on which law firm is representing the debt buyer.  Each debt buyer has different attachments that they place in the lawsuit, that require different responses.  Most importantly, you should not personally be involved in the defense of the lawsuit, at least at the onset, because you are a liability.  That’s right, you are a danger to your own case.  You can be cross examined and your testimony can be used against you.  Bet they didn’t tell you that in the internet chat room that you visited when drafting your own answer…

If you call my office, I am glad to give a consultation, even if you are not going to hire me or my firm.  That being said, if you don’t hire us, and you don’t hire someone else who does what we do, you are setting yourself up to lose a case that you would almost otherwise be guaranteed to win.

Posted in Lawsuits

Debt Collection Letters on Out of Statute Debts

Are you getting debt collection letters on very old debts?  All states have a statute of limitations on the collection of debts.  A statue of limitation is the time period within which you must be sued on a given claim. It is also called a time-barred debt. It is an affirmative defense, in other words, you must raise the defense in your answer to the collection complaint.  If you fail to raise the defense, then you are deemed to waive it. What is the statute of limitations in Pennsylvania? For a typical credit card case it is four (4) years, but maybe as short as three (3) years for Discover Bank and Capital One cards.

So, you get a collection letter on an account that you know is over the statute of limitations. What do you do?  You should keep both the letter and the envelope that it came in.  If the debt collector failed to tell you that it was out of statute or failed to tell you when the last payment was on the account, you may have a violation of the Fair Debt Collection Practices Act (“FDCPA”).

The FDCPA is a law that governs the behavior of debt collectors. It is only applicable to consumer debts, not debts that you would have incurred in a business or for a business purpose. It is a remedial statute and will be construed broadly in order to give it the full effect. The Courts interpret the FDCPA not from your individual perspective, but from a much lower standard, the “least sophisticated consumer”. The law states that if the debt collector violates the FDCPA it must pay your reasonable attorney fees and costs and you are entitled to your actual damages and statutory damages.  The FDCPA was written to provide for attorney fees so that it would be enforced by private attorneys.  Without the fee shifting, the FDCPA would only be worth the paper it’s written upon.

A recent court decision helps to clarify that it is a violation of the FDCPA when a debt collector is collecting on a time-barred debt and used the word “settlement” in the letter.  The Court in McMahon v LVNV Funding, LLC, et al. held that even in the absence of a threat of litigation, the use of the word “settlement” would lead the least sophisticated consumer to believe that the debt was legally enforceable or collection litigation might still occur on the time-barred debt.

So, you if you have any collection letters on a debt you know is out of statute within the past one (1) year you should contact our office for a review of the letter.  You may email or fax a copy of the letter to us for a free no obligation review, making sure you have a cover sheet with your contact information.  Attorney Clay Morrow from our office will be glad to review your letter and advise as to the proper course of action.

Posted in Illegal Threats

The Worst Credit Card Lawsuit Defenses Ever

I have encountered many people who have tried to defend credit card cases themselves in the past few months and am very surprised at some of the defenses that they think will work. The following are a few of the worst defenses that I have seen, and an explanation as to why they are such bad defenses.

I’ve never had an account with you.

This means absolutely nothing in a court of law. The right to sue someone is a legal interest. A legal interest can be sold, at any time, at any price, to anyone.  While it may be true that you did not have an account with the collection agency, that doesn’t mean that they cannot sue you on a delinquent account. (Whether they can prove that they bought the account is another story and is the basis for much of our success in defending collection agency lawsuits).

I tried to pay, but they wouldn’t work with me.

This may be the worst defense ever.   “I tried to pay…”  this is called an admission. Who pays on something that they do not owe?  No one.  The admission here is that you did have an account with someone and that you are in default on that account.  In a nutshell, it means that you lose your lawsuit. To be clear, once you are in default the creditor or collection agency does not have to accept any payment other than payment in full.  You do not get to set the terms of repayment.  Its not up to you to decide how much you can or are willing to pay. In addition, a court typically does not determine payment arrangements. Instead, a court determines if you owe anything and then how much. Repayment afterwards is up to the parties to handle.

My divorce decree says that I don’t have to pay.

This is mixing apples and doritos. A divorce decree or order is issued by a family court. While it has a binding effect between the spouses (ex spouse’s I should say) it does not bind other parties. The credit card company (or collection agency) is not bound by this divorce decree or order because its case is in civil court, which is different. The credit card company can sue the named cardholder only, not anyone else, and the divorce decree will not prevent that. What may happen is that the credit card company sues the cardholder and wins its case. The cardholder could then go to family court and have the other person found in contempt for not handling the account.

I hired a debt settlement company.

Perhaps the second worst defense, and, the absolute worst move that you could make, period. (This author firmly believes that debt settlement companies are useless and clearly not worth the outrageous fees that you pay them). As stated above, a credit card company or collection agency does not have to accept any payment other than payment in full, once you are in default. Debt settlement companies cannot stop lawsuits from occurring and are not equipped to help you respond to a credit card lawsuit. DO NOT TAKE LEGAL ADVICE FROM A DEBT SETTLEMENT COMPANY.  Again, don’t hire them to begin with and you won’t have to worry about heeding their legal advice.

Posted in CC Companies, Lawsuits


Credit Card Lawsuits

If you are faced with a credit card lawsuit, whether its an original creditor or a junk debt buyer, contact my office at 412-823-8003 right away. We offer a free, no obligation review of any credit card based lawsuit that is filed in PA.

FDCPA Attorneys

Many Debt Collectors threaten people, that's a fact. Threats of wage garnishment, jail, fraud charges and contacting employers, friends and relatives happens every day to people just like you. The truth is that most of these threats are illegal. If a debt collector is threatening you, contact our office at 412-823-8003 for a free initial consultation.