Negotiating with Sherman Acquisitions

[bndfishing]

I have a 2 old Sears accounts that has been sold to SHERMAN ACQUISITION,LP. The total of the 2 was 12k and Sherman has inflated it to 20K. They are very delinquent and haven’t been paid on for at least 4 years but maybe 5. I want to get this cleaned off my credit history and move on. I was thinking about offering them a settlement for 10K. Do you think they would accept this? I have never been contacted by them so if I initiate contact I want it to be quick. What kind of settlement should I work toward?

[DocDon]

Sherman buys bad debts. They paid pennies on the dollar and are now extorting MORE money than you owed the original creditor.

When you say "old" accounts, check your state SOL. It could be the reason you haven't heard from them is because the SOL expired.

Also, you can ask to see what they actually paid for the account:

Coppola v. Arrow Financial Services, 302CV577, 2002 WL 32173704(D.Conn., Oct. 29, 2002) – Information relating to the purchase of a bad debt is not proprietary or burdensome. Debtor must phrase their request clearly to obtain: The source of a debt and the amount a bad debt buyer paid for plaintiff’s debt, how amount sought was calculated, where in issue a list of reports to credit bureaus, and documents conferring authority on defendant to collect debt.

[bndfishing]

I am in Oregon but the debt originated in Idaho (SOL 4 years). In oregon the SOL is 6 years on all debt. I haven't paid sears in 5, I don't know when it was sold. What should I do as a first step?

[tucsondave]

Sherman isn't extorting more money than they paid, Sherman is a bonafide purchaser, a purchaser for value, in good faith, and without notice of any defenses.

The fact that Sherman paid anything less that 100 cents on the dollar for the debt is irrelevant to the fact that you may or may not owe the debt.

Statute of Limitations is not necessarily based on the last time you paid. In the case of credit card debt, SOL is generally measured by the charge off date of the account, so look at when the account was charged off. Because, prior to charge off, you potentially could have paid the account to zero, and some creditors leave your account open if you pay prior to charge-off. The right to pursue legally will generally accrue to the creditor at charge-off.

The constitution prohibits states from impairing the obligations of contracts. It doesn't matter what Sherman paid for the debt as far as their ability to pursue you legally and enforce the contract according to its terms, including the contract rate of interest. Think of a situation like a mortgage, they are bought and sold all the time. You don't get out of paying your house payment just because the bank sold the mortgage to someone else. Also, you don't get to inquire about whether the purchaser of your loan paid less. See the UCC, article 3 for commercial paper.

The case cited by DocDon is an unpublished opinion and would not be good authority to cite for the proposition that DocDon is trying to make, and besides, the case does not say what DocDon notes what the case stands for. The case he cites, deals with a company that did not want to respond to interrogatories, it says nothing about how much someone paid for a debt. I doubt a court will order a company to disclose how much it paid for a debt. Its really irrelevant to the underlying debts enforcement. The key issue will be, did you use the account? If so, do you have any defenses?

The bottom line is that if you owe the debt, figure out some way to pay it. You should either offer a settlement, generally companies will settle for about 85% of the balance, or possibly less, or you should enter into a repayment plan with the creditor. Chances are that Sherman will be forwarding your file to an attorney in your state. If you own your home or have a good job, don't be surprised if they try to obtain a judgment against you and garnish your job and/or place a lien on your property.

[divemedic]

You are most incorrect, in fact, you sound like you work for Sherman or some other JDB.

First, SOL is not dependant on when the account was placed as a CO. If that were true, SOL would never run. SOL begins running when the final element of a cause of action occurs. If the card agreement states that you will pay every month and you stop paying, the final element of the CofA was when you missed that first payment. The SOL would run from that date.

If an entity buys a debt after it is in default, and only pays pennies on the dollar, they are no longer an innocent purchaser of value. The amount the company paid for the account is relevant and should at the very least be admissable as a part of discovery.

[DocPC]

Typical convoluted collector language....

[tucsondave]

You can spread all the disinformation you want. We have case law on our side.

Keep misquoting cases or cite unreported cases all day long. It just makes my life that much easier when you tell consumers the wrong information.

If nothing else, it gives me a good laugh to read this nonsense.

[ghacorp]

Welcome to the forum tucsondave! As is obvious here, most forum posters are debtors who typically hold jobs and can afford to repay at least something. The underlying mission may also be to use or misuse FDCPA provisions to escape obligations owed to someone typically a big corporate lender or low-life junk debt buyer.

While I agree with your position on Sherman and some of your statements, you have made some misstatements with regard to SOL calculations which are actually calculated from the date the original account first became delinuent. For most revolving accounts that is 30 days from the date of last payment. So in Delaware that would mean 30 days plus the 3 year statute period. The analogy given with respect to mortgaging is also not correct as Sherman acquires [unsecured] debt as junk and NOT as a holder in due course when banks typically sell or transfer portfolios to another. Any attempt to reage or represent to a consumer they have purchased the debt in good standing as a holder in due course is fraudulent! (You are aware of that, correct?) Further, when a consumer requests validation they must reasonably validate prior to filing a lawsuit. This does not mean they are required to answer all of the questions consumers want answers to or jump through an obstacle course. Validation is not merely furnishing copies of statements because in court it can be challenged on hearsay when they do not produce a representative of the OC in court.

Lastly, upon profit and loss writeoff at day 181 the credit card contract in effect becomes null and void. Again, welcome to the forum!

[divemedic]

and I have statutory law on my side from the Florida Statute of limitations:

95.031 Computation of time.--Except as provided in subsection (2) and in s. 95.051 and elsewhere in these statutes, the time within which an action shall be begun under any statute of limitations runs from the time the cause of action accrues.

(1) A cause of action accrues when the last element constituting the cause of action occurs. For the purposes of this chapter, the last element constituting a cause of action on an obligation or liability founded on a negotiable or nonnegotiable note payable on demand or after date with no specific maturity date specified in the note, and the last element constituting a cause of action against any endorser, guarantor, or other person secondarily liable on any such obligation or liability founded on any such note, is the first written demand for payment, notwithstanding that the endorser, guarantor, or other person secondarily liable has executed a separate writing evidencing such liability.

There are times when the statute is tolled, but that is for things like concealment or fraud. Nothing in there about when the OC charges off the account.

[tucsondave]

Thanks for the info GHACORP.

I don't know that the date you use as the delinquency date is correct. As an example, assume the debtor takes the account up to charge off, pays it off right before charge off and/or the creditor re-ages the account, leaving the line of credit intact.

Further, lets assume the debtor starts using the account again, which is entirely possible. Then, the debtor goes past due again. This is a revolving open-ended line of credit. Are you asserting that the date of the delinquency carries back to the previous delinquency date? I don't think a court would hold that.

I believe that Sherman is a holder in due course. I have never seen any court opinions that stand for the proposition that a charged off contract is considered "junk." First off, I'm not here to defend Sherman. There are a lot of problems with these charged off credit card accounts, namely, being able to provide validation of the debt, however this is easy to obtain for the most part.

I also use the word generally because there is never an absolute. What is wrong with forums like this is when people like DocDon post uncited cases and try to bolster their points with supposed quotes from the case that don't exist, or argue that a case stands for a particular legal opinion, when the case cited by DocDon says no such thing.

I have done a lot of case research in this area and if you have some cases that stand for the proposition that "SOL calculations are actually calculated from the date the original account first became delinuent." I would love to see a courts interpretation of that. (every court opinion I have read has used the charge off date as a date certain as opposed to the date the account became delinquent. This is the problem with a revolving account as opposed to say, an auto loan where you know the date certain where payment is due.

The difference between the layman and the people that know what they are talking about is when people don't like what you tell them and they can only respond with statements such as "typical collector response" or you're wrong, without any support for their assertions beyond my being wrong.

I'll be the first to admit when I'm wrong, but I have never seen a court opinion that says a credit card debt is "null and void" simply by the fact that it is written off. If that was the case, there would be no one out there buying up all this charged off debt, like Sherman and the other debt buyers out there.

Finally, I never asserted that a company such as Sherman re-ages or should try to re-age the debt and start a new SOL period. There have been companies (CAMCO comes to mind) that tried that, and found out to their detriment how that was a bad move. We always use the charge off date, never change it, and somehow we are able to stay within the provisions of the FDCPA, validate our debts and collect on behalf of our clients in a respectful manner.

Again, please reply with some valid authority for your assertions and if they are more than unpublished opinions or lower court cases that carry no weight, then I would love to correct my understanding.

[tucsondave]

divemedic, that's great, you cite a florida statute. Unfortunately for you, most banks that issue credit cards are covered by the National Bank Act. The state statutes are superceded by that.

Otherwise, you could argue that banks shouldn't be able to charge usurious interest rates, but somehow, they are. Its called the Marquette decision. Look into it.

[divemedic]

In the hypothetical case above that you talked about, you are correct the SOL would begin when the account went delinquent and stayed that way. Not because the SOL begins when the OC charges off the debt, but because the consumer paid the debt up to date and then went delinquent AGAIN, thereby creating a NEW CofA. The suit would be based on the second cause of action, not the first.

What is this hangup so many people who come here have with case law? Case law is fine if you are arguing a matter of fact or an ambiguity of the law, but when you have a statute that says in a pretty clear manner what it means, there isn't going to be case law because no attorney is foolish enough to try and argue that point. Case law is intended to clear up points that are not clear or are not addressed in the law.

The statute is pretty clear here.

[divemedic]

There are quite a few cases that I found dealing with the name Marquette. Do you have a more specific cite?

[tucsondave]

The problem, Divemedic is when you cite a state statute, when really, federal law controls.

Case law is used to interpret what the statutes mean. If we didn't have case law, then our constitution would be as big as the tax laws. The statutes aren't intended to cover ever conceivable situation. The legislatures of the states and congress leave it up to the courts to interpret the intent.

Our laws would otherwise have to cover every possible scenario. How would people lead their lives if we had to look to a statute to interpret what it means? The statutes would have to be mulitple pages.

Many statutes are a few sentences long. Would you prefer them to be thousands of sentences to cover every scenario you can think of?

The statutes are NEVER perfectly clear, nothing really is ever perfectly clear, otherwise we wouldn't need the courts to interpret them, would we?

[tucsondave]

439 U.S. 299 (1978) Marquette Nat’l Bank v. First Omaha Serv. Corp.,

[divemedic]

That case is about a suit brought because a bank did not want to obtain a state license of a subsidiary of a national bank. The basis for this decision was that the law

"authorizes national banks to “conduct in an operating subsidiary activities that are permissible for a national bank to engage in directly either as part of, or incidental to, the business of banking, as determined by the OCC or otherwise under statutory authority.”

The general powers granted to a national bank are delineated in 12 U.S.C. § 24(Seventh). Section 24(Seventh) gives national banks the power to exercise “all such incidental powers as shall be necessary to carry on the business of banking.”

However, the decision also went on to say:

States may regulate “where . . . doing so does not prevent or significantly interfere with the national bank’s exercise of its powers.” Barnett Bank of

Marion County, N.A., v. Nelson, 517 U.S. 25, 33 (1996)

However, no where does this case state that a Statute of Limitations is preempted by the federal act. There are, however, many cases where consumers prevailed over national banks using the SOL defense. If the above cite in any way affested that, these cases would have been overturned.

The above cite had everything to do with federal preemption in licensing of banks and nothing to do about whether state SOL applies to credit cards.

[DocDon]

Nice try, Dave. Here's the cites. I'm sure you know how to look them up, since you're an attorney.

Among the areas that have been held discoverable in FDCPA cases:

_ The source of a debt and the amount a bad debt buyer paid for plaintiff’s

debt. 213 (D.Conn. 1998); Coppola v. Arrow Financial Services, 302CV577, 2002 WL 32173704

(D.Conn., Oct. 29, 2002) (must phrase request clearly); Kimbro v. IC System, 301CV1676, 2002

WL 1816820 (D.Conn. July 22, 2002).

_

_ How amount sought was calculated. Coppola v. Arrow Financial Services,

302CV577, 2002 WL 32173704 (D.Conn., Oct. 29, 2002); Kimbro v. IC System, 301CV1676,

2002 WL 1816820 (D.Conn. July 22, 2002).

_

_ Where in issue, list of reports to credit bureaus. Coppola v. Arrow Financial

Services, 302CV577, 2002 WL 32173704 (D.Conn., Oct. 29, 2002).

_

_ Documents conferring authority on defendant to collect debt. Coppola v.

Arrow Financial Services, 302CV577, 2002 WL 32173704 (D.Conn., Oct. 29, 2002); Kimbro v. IC

System, 301CV1676, 2002 WL 1816820 (D.Conn. July 22, 2002); Yancey v. Hooten, 180 F.R.D.

203 (D.Conn. 1998).

Did I mention

[FNDM]

The information below was taken word for word from the Fair Trade Commission website. It proves several violations of the FDCPA based on statements you posted on this site. In ne of such statements you admitted to working for Sherman Acquisitions you said and I quote “We always use the charge off date, never change it, and somehow we are able to stay within the provisions of the FDCPA, validate our debts and collect on behalf of our clients in a respectful manner”, also “The bottom line is that if you owe the debt, figure out some way to pay it. You should either offer a settlement, generally companies will settle for about 85% of the balance, or possibly less, or you should enter into a repayment plan with the creditor. Chances are that Sherman will be forwarding your file to an attorney in your state. If you own your home or have a good job, don't be surprised if they try to obtain a judgment against you and garnish your job and/or place a lien on your property”

False statements. Debt collectors may not use any false or misleading statements when collecting a debt. For example, debt collectors may not:

· falsely imply that they are attorneys or government representatives;

· falsely imply that you have committed a crime;

· falsely represent that they operate or work for a credit bureau;

· misrepresent the amount of your debt;

· indicate that papers being sent to you are legal forms when they are not; or

· indicate that papers being sent to you are not legal forms when they are.

Debt collectors also may not state that:

· you will be arrested if you do not pay your debt;

· they will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so; or

· actions, such as a lawsuit, will be taken against you, when such action legally may not be taken, or when they do not intend to take such action.

Debt collectors may not:

· give false credit information about you to anyone, including a credit bureau;

· send you anything that looks like an official document from a court or government agency when it is not; or

· use a false name.

Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, collectors may not:

· collect any amount greater than your debt, unless your state law permits such a charge;

· deposit a post-dated check prematurely;

· use deception to make you accept collect calls or pay for telegrams;

· take or threaten to take your property unless this can be done legally; or

· contact you by postcard.

“Debt collectors may not give false credit information about you to anyone, including a credit bureau”. By not reporting the correct date of delinquency or correct date the original account was opened to the CRAs you are re-aging the account and restarting the statute of limitation and that is an unfair practice because it causes a persons credit score to be lower than it should be and may cause them to be denied credit or pay a higher interest rate.

[reno2360]

Going back to an earlier post...

"Sherman isn't extorting more money than they paid, Sherman is a bonafide purchaser, a purchaser for value, in good faith, and without notice of any defenses."

Explain to me why Sherman would buy a debt for the same amount that they are attempting to collect? That makes no sense and has no benefit for Sherman. Of course they buy these debt for pennies on the dollar in order to turn a huge and quick profit.

[DocDon]

It's common knowledge that this is exactly what JDB's do.

Our poster is a CA. A search of the AZ State Bar also shows he was just admitted to practice law (February 2, 2005). Golly.

It only made sense for him to attack me directly to try to ruin my credibility - it's much easier to try to discredit me than it is to discredit attorneys with more than 30 years experience (which is where I got that information from) - especially if you're a brand new attorney looking to cut your teeth...

[divemedic]

Thanks for the info GHACORP.

I don't know that the date you use as the delinquency date is correct. As an example, assume the debtor takes the account up to charge off, pays it off right before charge off and/or the creditor re-ages the account, leaving the line of credit intact.

Further, lets assume the debtor starts using the account again, which is entirely possible. Then, the debtor goes past due again. This is a revolving open-ended line of credit. Are you asserting that the date of the delinquency carries back to the previous delinquency date? I don't think a court would hold that.

A member of the bar, yet I had to explain cause of action to him? The above clearly constitute 2 seperate CofA's, yet he didn't see that. Either he is very obtuse, or he thinks that I am stupid and wouldn't see that.

As for the SOL is federal arguement, I beat Wells Fargo Bank in court for a claimed amount of over $11K. I beat them down to $7500 through DV and then sued for multiple violations in the amount of $3K. The attorney in a pre-trial settlement conference threatened to sue for the entire $11K+ and attny fees if I didn't drop the suit. I told him the debt was out of Florida's SOL. He said my actions reset the SOL under some obscure banking law. I threatened to add his firm to the suit. He backed down, no suit was ever filed.

Now, don't you think that if the Florida SOL was that easily beaten, that Wells Fargo would have sued me, rather than settle my case for deletion (they also paid me cash!!) AND lose the $11K?

You may want to go back and read the law again, sonny. The SOL has been used to win too many cases on this board for us to believe your lies and intimidation.