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At what point does the OC lose the ability to sue?


bigboy27
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At what point does the OC lose the ability to sue?

When they charge off the acount as profit/loss?

When it goes to a CA?

They can sue forever, however, if it's past the SOL (statute of limitation) then you can use an absolute defense of "time-barred" debt.

OUCH. I just looked up the SOL for your state, not good (if this is correct)

STATE: RHODE ISLAND

Interest Rate

* Legal: 12%

* Judgment: 12%

STATUTE OF LIMITATIONS (IN YEARS)

* Open Account: 10

* Written Contract: 15

* Domestic Judgment: 20

* Foreign Judgment: 20

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So basically, once a CA sends something the OC can't do anything legally?

That's what I thought. So if a CA says something like:

"This office has been retained to collect on this account..........if you don't pay or make arrangements we will advise our client legal action is needed....."

They're using it as a scare tatic since the OC won't be able to do anything (although the CA could always).

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Umm no. They only lose the RIGHT to sue if they no longer are the real party in interest. IE if they assign their rights to the debt to someone else.

There are two meanings to assign for our purposes.

The first is just assigning a 3rd party a debt for collection. The CA is just working the file. They can't do anything but call or write letters basically and maybe are authorized to approve settlements. The OC still retains full ownership of the debt and makes all decisions, they are just having another party do the work of collecting. Only the OC can sue on the debt. An example would be telling your buddy to go put gas in your car. It's still your car, he's just doing some work for you.

The second is assigning ownership to a 3rd party. The 3rd party is now the owner and can sue. The OC can no longer do anything with it. This would be you selling your car to your buddy. He is the owner of the car now and can do with it as he pleases.

So to answer your question bigboy... no, it is not just a scare tactic. That language suggests that the first definition of assignment is in play.

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So basically, once a CA sends something the OC can't do anything legally?

That's what I thought. So if a CA says something like:

"This office has been retained to collect on this account..........if you don't pay or make arrangements we will advise our client legal action is needed....."

They're using it as a scare tatic since the OC won't be able to do anything (although the CA could always).

Nope...fraid not. What the CA is telling you is that they are working under contract for the OC. If the CA can't get any money out of you, they'll stop trying and recommend to the OC that the OC takes legal action. (Yes, its a scare tactic, but it might happen)

The magic word is "SELL". Once an OC lists "sold to another lender" and a $0 balance on your credit reports, then the debt has been sold and the OC no longer has any interest in it.

Up until that point, the OC still owns the debt and can still try to collect (perhaps using a CA) and can even sue.

On the other hand, a CA cannot sue you unless they are a lawyer acting on behalf of the OC.

A junk debt buyer (JDB) can sue AFTER they've bought the debt from the OC. A JDB may even get a CA involved.

And...just to further confuse things...CAs are sometimes "assigned" (as in contracted to hassle you) a debt...and debts are sometimes "assigned" to JDB's (as in, the right to collect has been sold to).

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