Served for Small Claims - PLEASE Help!

[distressed]

Okay, this is all very new to me and I've learned a lot quickly thanks to this site but need to get my thoughts straight. FYI - I'm in Massachusetts.

I originally received a letter (regular mail) from an attorney that went like:

9/16/2002

RE: NCO Assignee of Novus

File #: xxx

Balance: $1,628.86

Dear xx:

This office has written to you previously regarding the above-captioned matter. There is a balance abo

uve captioned. It seems a shame that we should have to enter this matter in suit to effect payment which will necessitate the addition of court costs and constable fees, which will be added to your balance.

May we suggest that you contact our office immediately upon receipt of its letter to avoid this action. YOu will find us most cooperative in attempting to arrive at reasonable payment program with you. However, if we do not hear f rom you, we will commence suit automatically within seven days.

Sincerely,

xxxx

THIS IS AN ATTEMPT TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.

- end letter -

FYI: The lawyers is http://www.kreamandkream.com/

This was dated 9/16/02. I called the guy (October) to ask him what it's about, can he provide any info? He says he gets it by email/electronically, and tells me it's from April 1990 and the last payment was 11/97. He tells me he's reading this off my credit report and tells me that I should get a copy of my report.

I get a copy of my report (Transunion) and there's no such thing on it, so I let it slide. (I know, bad mistake!)

Anyway, I get served (by first class mail) for small claims court in my city in January (I can't remember the date) for court 2/27/03. The only information on it is the claim that I owe $2000.00 plus $19.00 for court costs and the details provided are "May 30, 2002" and "Balance due for oustanding credit card balance." The lawyer filled the form out on 12/24/02 (Merry Christmas!) but it looks like it's stamped from the court on 12/31/02.

Now, I get the form and call the attorney and ask if we can reschedule so I can research this. He says no, of course. I tell him that it didn't turn up on the credit report I got. He tells me he's looking at my report right now (Experian) and it's on there, plus another old debt from the same time frame. He tells me that the only info he has is name, address, balance, 12/31/99 payment, April 1990 opened, sold to Creditrust which he says is his client. He says that he's got 65,000 cases. He told me that the company is NCO and that I can't get in touch with them, I have to deal with him. He tells me that he tried getting in touch with me on 5/30/02 (the date on the summons!) but it was at an address where I haven't lived for about 4-5 years. I ask him if he'll be the one in court and he says no. Needless to say he was pretty much a jerk.

So now I'm scared and start doing some research and find this site! Tomorrow I will mail validation letters to him and to NCO (certified,RRR.) I called Discover and they gave me the number for the credit Department. I called NCO and they gave me the number for this attorney. I did pull my other two credit reports and Experian does show Discover sold to Creditrust (NCO) and lists Date of Status as 11-96 and Last Reported 9-98 and Liability Amount $1,000. Equifax lists Discover Fiancial, Date of Last Activity 12/96 and "charged off account" "Account Transferred or Sold." It lists high credit as $1000.

Now I remember having a Discover Card in college, but that was 13 years ago and I couldn't even begin to tell you when I got rid of it. I feel like an @ss for not getting my credit reports sooner. I won't ever make this mistake again. But I've got to deal with this immediately. What I have learned from this site is that:

1. the lawyer (CA, right?) needs to prove the debt is valid

2. the laywer needs to prove that the debt should legally be paid to him

3. It looks like the lawyer has misrepresented the amount owed. The credit report says $1000, his letter of 9/16/02 says $1628.86 and the summons says $2,000 (the max for small claims?)

4. The lawyer has to be bonded and licensed.

Questions:

1. Now what do I do?

2. I've read about sending an "Answer." Is it too late? Is it better to send an Answer or just wait for court?

3. How do I find out if the lawyer is bonded and licensed. Is he operating illegally if he isn't?

4. How else do I prepare? What should I bring?

Please know that your response would be very VERY much appreciated. I wish I found you all sooner!

[IronMan]

You need to poke around the other forums here. I've got some stuff on Small Claims Results you should check out and under Collections.

Time now is of the essence, so your validation is fruitless now.

We'll deal with that later. We need to focus on making sure you answer this and get ready to appear.

1. Now what do I do? + 2. I've read about sending an "Answer." Is it too late? Is it better to send an Answer or just wait for court?

YOU ANSWER WITH AFFIRMATIVE DEFENSES. If you let this thing go to default you're on your own. You have time to prep something. But you're going to have to dig in and do some heavy web-surfing in the next 5 days. If you have no experience or representation in these matters, prepping for your first one is very time-consuming.

Research your state's code of civil procedure and rules of court. Can be done on-line I hope. Go to findlaw.com and start there.

See if the CA or even their attorney (aka "Assignees") have any standing in the court. Probably not because they are not the Orig Creditor (OC) / real party of interest in the matter anyway. The OC sat on their rights....too bad.

Most states won't allow assignees to stand on their own. The OC must join with them in the suit. You file with your answer a Motion to Dismiss based on what ever law you find (aka "authority") that bars their cause of action.

Type it all up and bring to court. Get to court early and give your answer directly to the court clerk to have it taken to the judge or inserted in the file since the file will be in-chambers if your case is on the calendar for that day. Also give a copy to opposing party.

3. How do I find out if the lawyer is bonded and licensed. Is he operating illegally if he isn't?

IT DEPENDS ON YOUR STATE. SOME STATES REQUIRE LICENSURE OTHERS DON'T (California is a no license req'd state). Try to look up on-line for your state.

4. How else do I prepare? What should I bring?

WHAT YOU WANT TO DO IS TYPE UP A CONCISE DECLARATION OR ANSWER BRIEF TO SUBMIT TO THE COURT. Go to the Small Claims Results Forum to get an idea. You state your affirmative defenses in this answer. You can submit on the day of court

Things you need to research now:

1) Does the CA/Atty (Assignee) have standing in the court?

2) Is the ALLEGED DEBT stale? (Past the Statute of Limitions for your state)

If 1 is NO and 2 is YES, then you're home free. Kinda sounds like it to me based on what you've posted.

If these defenses don't work (small claims sucks for these cases), you can move for a continuance since you have not had opportunity to exercise your rights under the FDCPA in verifying this debt or any opportunity to dispute it outside of court. Further, you'll need to ensure through validation that the CA/Atty is not misrepresenting the character, status, or amount of alleged debt.

Your assigments are : CA/Atty's standing in court to bring forth the action, and if this alleged debt is stale.

My guess is that this debt is stale and uneforcable. However, since this is a Small Claims matter, you'll probably get a 6-week trained 'Commissioner' who will either not hear it, or rule against you. If that happens, don't worry, you'll appeal this. However, you will change the venue if the action was not filed in the same county in which you live or where the duty to perform took place.

Your next action would be to file a suit against them for FDCPA violations, but that's later.

When you appear, be even-headed (You'll be nervous as hell), and use your brief to keep on the issues. You can talk to the CA/Atty at the hearing. Be polite, do not be emotional. Save any arguments or discussions for the bench. If you talk too much the judge will get pist. It may very well be some Joe Schmucko attorney just appearing for the actual CA/Atty. I wouldn't be surprised if this guy gets his arguments via fax papers.

Good Luck!

[Edit by IronMan on Thursday, February 20, 2003 @ 12:39 AM]

[bingo]

What state do you live in and when did you last pay the orginal creditor?

[distressed]

I'm in Massachusetts. I haven't paid in years! this is all news to me. I haven't had the card in so long I guess I just assumed that it was closed.

I called Discover this morning and they told me that they had my DOB as 12/06 (!) and they had 2 incorrect addresses. Had the original address from my college which was in 1990. Said that the account was sold to Creditrust in 5/99.

[distressed]

What I've learned:

The SOL is 6 years in Massachusetts.

It looks like the attorney might not be currently licensed -I've got to double check with the licensing authority later today (their database was down.)

I'm having trouble finding where to read up on whether the attorney/CA has "standing" in small claims court in Mass. There are some small claims court non-profit services here that I might try to call.

Question: I asked the attorney for additional info when we spoke - not in writing - and he said that he told me all that he had. Creditrust (now NCO) says I have to mail something. Am I to understand that it is better NOT to do that before the court date so that my lack of opportunity to validate this information is part of my defense?

Thanks again to all who reply - what a huge help!

[bingo]

I'm going to suggest your best defense is the SOL. A credit card is an open account and is specifically defined that way under Reg Z of The Truth In Lending Act.

Others may have a much better idea but I'd suggest responding as having no recollection of the account and in any event, it is well beyond the SOL. Whatever you do, don't say it is yours. Just keep hammering on the SOL issue and demand that the lawyer furnish you and the court the last time a payment was made to the orginal creditor.

[Capepuffin]

Kream and Kream are the same attorneys that I am dealing with. I just filed a class action suit against them. The first letter they sent you is a 'form' letter. I received the EXACT same letter. They send this letter to any one and everyone that they are trying to collect a debt from. How many letters have they sent to you and what are the dates of these letters? Many of their letters have violations of the FDCPA in them. If my class action lawsuit is accepted by the federal court in Boston, you will be able to be part of the class. Which means you can be part of the suit and collect any damages that the court awards. In the meantime, make sure that you answer the complaint and file a copy with the courthouse in your county as well. Make sure that you send everything to the CA's attorney certified. I asked Kream and Kream over 4 months ago to validate and they still haven't. This attorneys office specializes in debt collection so this makes them also fall under the FDCPA guidelines. If they violate the FDCPA they can be sued and that is what I am doing. I have all of their letters to prove their violations and they have 3.

[Capepuffin]

oh yea, if the amount of the debt is going up on the letters that they are sending to you, that means that they are adding on attorneys fees. They can't do that! The only way to add their fees on is to go to court with you and the court says that they can. Or if they win. It is illegal for them to add fees onto the original debt before any court action! That is 1 of the violations that I am suing them for.

[distressed]

So if the last status on my account (on both credit reports showing this

alleged debt) is 11/96 and 12/96, then the SOL is my best defense?

What is the best way to present that in court?

By the way, capepuffin - I checked with the state banking office (forget the

official name) that manages licenses for collection agencies and it looks like

Kream and Kream aren't even on the list on the web site. I called this

morning to verify, and the gentleman said the web site list was current, but he

couldn't check his database because the system was down. I'm calling later

or tomorrow to check. It could be possible that Kream and Kream let their

license expire. (I was told that it has to be renewed annually.) Wouldn't that

be fun?

[Capepuffin]

Kream and Kream is an attorneys office. Would they be listed under liscensed collection agencies for the state?

[bingo]

I would suggest SOL is the best defense. Forget about charge off date. The important date is when you LAST paid the OC. CC accounts must be charged off within 180 days of first default. SO, the last time you paid Discover would be about 6 months PRIOR to either 11/96 or 12/96. You beat the SOL clock if I'm thinking correctly. ANyone else with an idea?

[distressed]

From what I've read, I believe that if they are in the business of collecting in

the state of Mass., then they must be licensed as a collection agency in

Mass.

Can someone cofirm this?

[IronMan]

An attorney(s) that regularly engage in debt collection is considered a debt collector for purposes of FDCPA purposes. Case law, but I don't remember which case(s) support this.

Cheers!

[calawyer]

Here are some links that will help you:

Mass small claims info:

http://www.state.ma.us/consumer/Pubs/smclaim.htm

Harvard site with a free hotline:

http://www.hcs.harvard.edu/~scas/

Samall claims messageboard:

http://www.prairielaw.com/messageboards/board.asp?channelId=30&mbId=70

Good luck.

[Swede]

<blockquote>Originally posted by IronMan

An attorney(s) that regularly engage in debt collection is considered a debt collector for purposes of FDCPA purposes. Case law, but I don't remember which case(s) support this.

</blockquote>

Yep, Supreme Court decision in the case of Heintz v. Jenkins

[Edit by Swede on Thursday, February 20, 2003 @ 12:14 PM]

[ghacorp]

SOL's typically run from the date of last payment activity.

[distressed]

Okay, so it looks like the attorney needs to be licensed in Mass. and

might not be. It looks like the debt is stale / past the SOL. What I can't

find is any Massachusetts law pertaining to whether an assignee has

standing in court without the OC present.

Am I correct in understanding that small claims falls under district court and

that's where I would find any laws, statutes, cases? This is what I'm

having trouble with. Help?

In addition, I found a great paper online "Strategies for Representing the

Louisiana Consumer" that lays out a lot of the federal credit/debt law very

clearly. Here's the site:

http://law.loyno.edu/~gwlong/bookconsumer.pdf

There's a great section (page 16) on how attorneys must

represent/conduct themselves and also outlines all of their most

commonly made mistakes which includes failing to provide timely

validation as well as filing "time barred" suits.

I know this stuff is a pain in the @ss, but it's also kind of fun. Think maybe

I should look into a career as a paralegal.

[Capepuffin]

You said:

By the way, capepuffin - I checked with the state banking office (forget the

official name) that manages licenses for collection agencies and it looks like

Kream and Kream aren't even on the list on the web site. I called this

morning to verify, and the gentleman said the web site list was current, but he

couldn't check his database because the system was down. I'm calling later

or tomorrow to check. It could be possible that Kream and Kream let their

license expire. (I was told that it has to be renewed annually.) Wouldn't that

be fun?

</blockquote>

Did you ever find out any info. as to if Kream & Kreams debt collection license is valid or was renewed? Who did you call? I called about 10 people and got nowhere. Please let me know when you find out. Thanks!

[IronMan]

In your answer you could state in your affirmative defenses that the complaint is barred by laches (SOL has expired) if the expiration of SOL is true.

You could also use the doctrine of unclean hands as another if you can prove that they are unlicensed to engage in such a business.

That's just my 2 cents.

Cheers!

[calawyer]

Actually, this is technical legal stuff, but laches and the SOL are two diffrerent defenses. SOL is usually statutory--if it's up, then your affirmative defense is something like "the complaint, and each cause of action therein is barred by the applicable statute of limitations including, but not limited to ....[cite the statute]".

Laches is an "equitable defense" that does not have a specific time period but may "borrow" from the applicable statute of limitations. The application of laches will vary with state law, but it often applies when there has been some prejudice to the defendant beacause of a delay in bringing the claim. Usually, lawyers will allege both the SOL and laches as affirmative defenses when applicable.