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Preparing my small claims case need help.

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I am preparing to sue a CA in small claims. They are barred from collecting a debt from me yet my two requests for validation and removal from my report have been ignored.

This is my question...... In filing with small claims do I include the statute which bars collection along with my letters and credit reports or do I wait and produce those at trial?

When I do provide the documents is it permissable to use a highlighter on particular sections or is that a no, no?

Thank you in advance!

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Here is what I have so far:



Old Canal Financial Inc



COME NOW Me Moore, who does hereby file this complaint for damages of $4,000 based upon defendant’s violation of the Fair Credit Reporting Act and the Fair Debt Collection Practices Act and states as follows:

1) Plaintiff, Me is a resident of My County, Idaho.

2) Defendant, Old Canal Financial Inc is a collection agency doing business in the state of North Carolina.

3) In December of 2004 Plaintiff received credit reports which contained an alleged debt owed to Defendant.

4) Defendant is barred by Idaho Statute 45-1512 (Exhibit A) from collecting such alleged debt. This further violates FDCPA 807 and 808 (Exhibit B)

5) As is Plaintiff’s right in accordance with the Fair Debt Collection Practices Act (FDCPA), Plaintiff sent via United States Postal Service Certified Return Receipt, a letter requesting formal debt validation and informing Defendant of their violation of Idaho Statute. This letter was sent on December 13, 2004 and signed for by Defendant’s office on December 29, 2004. (Exhibit C)

6) Defendant failed to respond with any type of requested validation, FDCPA 809(B) (Exhibit D) Defendant further failed to notify credit reporting agencies as required by FDCPA 807(8). (Exhibit B)

7) In December of 2004, Plaintiff filed a dispute with credit reporting agencies regarding Defendants reporting of alleged debt.

8) On January 17, 2005 Plaintiff received notice that defendant had verified the debt with the credit reporting agencies (Exhibit E) in violation of FDCPA 809 (B) (Exhibit D), FTC letter (Exhibit F)

9) On January 26, 2004, in a good faith effort to allow Defendant ample opportunity to validate the alleged debt, Plaintiff sent a second letter via Certified mail with return receipt requested. (Exhibit G)

10) Defendant again failed to respond.

11) Between the dates of January 7, 2005 and March 5, 2005 Plaintiff received credit reports in which Defendant failed to properly report the alleged debt as required by the FDCPA.

Wherefore PLAINTIFF prays for the following relief:

- Statutory damages of $1,000 per violation of FDCPA as provided in FDCPA 813(2)(a)

PLAINTIFF further prays for the following relief:

- For award of court costs incurred herein.

- For Prejudgment and Post Judgment interest

- For order to delete all entries to credit files of defendant regarding the alleged debt.

- For such other and further relief deemed just by the court

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I'm in McCall. The CA is Old Canal Financial.

I would LOVE some help.

Not sure where McCall is.....

If you were in Kootenai Co., I could give you some help.

A few of us advocate have "educated" some of the lower court Judges on FCRA and FDCPA law. It was tough, believe me...

Make sure you have the proper sections of the law printed and highlighted for the Judge and the opposing counsel.

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McCall is in Valley County. 90 miles north of Boise.

I am VERY concerned that the judge will not be "edducated" on FDCPA law. So it is permissible to highlight stuff? As you can see from my statements of fact above I plan to provide the FDCPA, credit reports, and letters as exhibits when I file. Is this a good idea?

The CA is in North Carolina. I will be suprised if they show up. I feel quite confident that I have sufficient evidence if the judge understands the FDCPA.

Even thought he CA is barred by statute from collecting (based on time and equity in real estate) is there anything else I should be concerned about? To me it seems simple..... The are barred from collecting, they ignored everyone of my letters, failed to show it as disputed for 2 months and continue to verify it with the CRAs to this day.

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We give the Judges and opposing counsel high-lighted documents almost every time we go. It depends on the Court.

You need to be prepared to produce evidence to the effect that they cannot collect.

If they don't show up, you can file a motion for default judgement.

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This is the applicable statute: http://www3.state.id.us/cgi-bin/newidst?sctid=450150012.K

The "sale" happend 20 months ago. The OC in this case had a second loan on the property and failed to show up for the sale. Also there was ample "market value" above and beyond the amount of the debt.

The one thing I am missing that I need to get is proof of when the sale was.

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That should all be in court records and you should be able to find it in your local courthouse.

Now as to the FDCPA violations.. it is only 1000 per ACTION.. which means 1000 total PER LAWSUIT.

SO you need to go after the FCRA violations which are 1000 PER VIOLATION>

Remember that folks... FDCPA PER ACTION... FCRA PER VIOLATION !!!

Other than that I think it lookse pretty good and you should make SURE to take highlighted copies of everything for judge nad opposing counsel

If they ask can this be placed in thise court.. make sure you show them the "any compitent court of jurisdiction"

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Can I ask for a little help? I looked into the penalty parts of the two acts. Which are 813 for FDCPA and 616,617, & 618 for the FCRA. To me both could be inturpereted as $1,000 per action. Is there anywhere to find an opinion letter or case law that reflects each violation is $1,000?


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§ 616. Civil liability for willful noncompliance [15 U.S.C. § 1681n]

(a) In general. Any person who willfully fails to comply with any requirement imposed under this title with respect to any consumer is liable to that consumer in an amount equal to the sum of

(1) (A) any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000; or

(B) in the case of liability of a natural person for obtaining a consumer report under false pretenses or knowingly without a permissible purpose, actual damages sustained by the consumer as a result of the failure or $1,000, whichever is greater;

(2) such amount of punitive damages as the court may allow; and

(3) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court.

(B) Civil liability for knowing noncompliance. Any person who obtains a consumer report from a consumer reporting agency under false pretenses or knowingly without a permissible purpose shall be liable to the consumer reporting agency for actual damages sustained by the consumer reporting agency or $1,000, whichever is greater.

© Attorney's fees. Upon a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney's fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper.

Now if you note in the bold it says that they are liable to the consumer for any damages that this noncompliance caused OR 1000 whichever is greater.

If you read the FDCPA it reads to the affect that any successful action shall get actual damages or 100-1000 dollars whichever is greater.

Its all a matter of wording but the FCRA gives much more leverage and there is very little room in the bona fide error defense.

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  • 1 month later...

Well I thought I would give a quick update. My local court prefers to serve out of state companies via certified mail. They do not request return receipts. Instead they track the delivery via the internet. Old Canal had 20 days to resond. That 20 days was up on 3/18. Unfortunately it took until today to learn that the post office did not report it as delivered on the internet so I have to have them reserved!! AAAGGHHHHH!!!

The service will go out tomorrow and I have to wait 20 days after they receive it to get a default judgement.

I think I will get the default as this company has not responded to any letter I have sent them nor did they respond to being sued. They just simply got lucky that it was not done right at the post office.

The really crappy thing is that I am trying to buy a new house and this is really messing up my financing. I have waited over a month, I basically have another month to wait and then after I get a judgement it will take lord knows how long to get the CRA's to remove it.

Has anyone else gotten a judgement for removal? How long did it take for the CRA's to remove the item?

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  • 3 weeks later...

Well here is the latest.........

I received a letter from an attorney today. It appears that the case is being moved from my local district court's small claims division to US district court. It also appears from reading the filings he has done with the courts that I do not even get a chance to object. Now I have to scramble to try and find an attorney to represent me. This really sucks. I can't help but feel like this is a stall tactic. I have plenty of evidence to clearly and without a doubt that they are trying to collect on something that is time barred by state law.

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Well this is a good thing. The federal judges are going to be more knowledgable in the FDCPA and FCRA. They are more likely to rule on the facts than He said, she said type of stuff. One of the better things is full discovery where you can bury them in paperwork.

Why do you need to scramble to find a lawyer? Some cases you do but in most you can argue the case just as well yourself. In most of these cases they are all argued on paper and there is minimal contact with the Judge.

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Yeah, I am hoping a federal judge is more in tune with the FCRA and FDCPA.

I am certain they will counter sue for the original note. Because of the size of it I would feel better being represented by an attorney. I feel I have done my homework and will win, but if I was to lose I would be financialy devistated.

I have been doing more homework and have found some more good info. I don't feel comfortable sharing it here until I meet with an attorney though.

I do have a couple of questions that some of the great minds here can probably answer...... 1. If I have discovered additional violations can I add them to my claim, or am I out of luck because I did not raise them originally? 2. If I have encurred additional damages since my original filing (like being turned down for credit and/or getting less favorable rates) can I add those to my claim? I only asked for $4,000 because that is the limit for small claims, but since I am forced to federal court I would like get all the damages possible.

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In reading your Mar. 18th post, it seems the CA is a 2nd TD lien holder whose position was wiped out to a senior foreclosure sale. If there were any surplus funds at time of sale, junior lien holders receive those funds, which get applied to balance owed on second. If there remains a balance, 2nd TD holder has right to collect those funds, subject to SOL, which is still in effect in your state (presuming sale was 20 months ago, as stated). FCRA and FDCPA regulations still apply, of course.

Additionally, and this is SCARY, if the 2nd TD was not "purchase money," that is, not used to buy the home, then you are subject to income tax on the amount borrowed, yet unpaid. Most real estate CA's use this tactic to collect deficiency balances: they often 1099 the borrower the amount of debt unpaid. But forget about the CA for a second... if you filed your taxes and didn't claim the "income" realized, you have a far greater beast on your hands to deal with: the IRS. Of course, you may have write-offs associated with the borrowed funds. Consult your accountant.

There is a legal way out of your precarious situation: file BK 7 and have the debt wiped out permanantly. The IRS allows this in this particular situation.

The other way out is to work out a payoff with the CA. They will more than likely accept a steep discount. Be sure you negotiate a "payment in full" entry onto your credit report.

Hope this helps! Good luck!!

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There was more than enough equity in the home to cover the second. In Idaho they are required to participate in the trustee's sale to protect their interest in the home as long as the value of the home supports them being able to sell it for enough to cover a reasonable amount of the money they are owed. In this case it would have covered 100% of the loan and fees. That is their first problem. Their second problem is that they only have 90 days to pursue action after the trustee's sale. Further that action can only be for any diference in appraised value and what they were owed. Again in this case the appraised value exceeds the loan amount.

When presented with this information the original creditor went away. It would seem, however, that this CA has purchease old debts and is attempting to pursue them.

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I am not aware of any statute in any state that requires a junior lien holder to attend a Trustee's Sale in order to protect their position. It would be interesting to see that regulation.

My question is, why would the CA hire counsel if they didn't believe they could recover funds (using your assumption they will counter-sue)? I think an atty would be negligent in taking on a case they know stands no chance of winning (well, on second thought...lol)

Also, I'm 99.9% certain the 90 day rule you quote pertains to the foreclosing beneficiaries right in pursuing a deficiency judgement should it end up "short-selling" the property at its own Trustee's Sale. For example, if the first TD total debt was $100k, and the beneficiary decided to open the bidding at $70k, and it sold for $75k, there still exists a deficiency balance of $25k. In Idaho (going from memory here), the foreclosing bene has 90 days to file suit to collect a deficiency judgement. Thats what the 90 day rule pertains to, not to junior beneficiaries interests'.

For your sake, I hope I'm wrong. I'm simply supplying information in the hope to assist you. Again, your atty will have all the correct answers. In the next couple of days, I'll dig up some info and post what I find.

By the way, was your second used to purchase the property, or did you take it out after purchase?

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I'll let you know how it goes as it unfolds. I don't really want to say anything further untill I have gotten the ok from my attorney. I know you mean well, however, there is a lot to this case and I don't want to completely tip my hand yet.

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There is Federal Case law that prevents them from couter sueing for the debt. You can find it by searching this forum or the case law post in the resources section. Your suit is about their actions in collecting a debt and does not depend on the validity of the debt.

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Here you go:

An FDCPA claim "has nothing to do with whether the underlying debt is valid. An FDCPA claim concerns the method of collecting the debt. It does not arise out of the transaction creating the debt[.]" Azar v. Hayter, 874 F. Supp. 1314, 1318 (N.D. Fla. 1995) (refusing to find waiver of FDCPA claim as compulsory counterclaim to state court action on the debt because claim "does not arise out of the transaction creating the debt, and thus was not a compulsory counterclaim under state law in the action to collect the debt."), affirmed, 66 F.3d 342 (11th Cir. 1995), cert. denied, 516 U.S. 1048, 133 L. Ed. 2d 666, 116 S. Ct. 712 (1996)
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