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Original Creditor Defenses


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It is fully understood, at least by me at this point, that STANDING and SOL are the only two reasonable defenses against a JDB.

It is fully understood that all other affirmative defenses that are suggested,

even if they are mentioned in your states rules regarding such, should not be mentioned because you will not be able to prove them.

It is fully understood that even though your state rules specify that you must answer with whatever affirmative defenses you can, because if you do not specify such in your answer they can never be brought up, you should not do it.

BUT.........

What do you do about the OC?

If one had 12 accounts that were defaulted on in 2008 that are almost a year

away from SOL...

And these accounts were NEVER SOLD..... Still with the OC.

What do you use for defense?

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There's a difference between a defense and and affirmative defense. SOL is still an affirmative defense against an OC, and IMO probably the only one a pro se is going to be able to win.

My OC suit was dismissed without prejudice. Even being the OC they could only come up with one statement that didn't even show a payment. They didn't even provide a generic card agreement. Now, an OC with a ream of statements back to zero, payment information, a competent witness, etc would be a tough cookie to beat.

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There's a difference between a defense and and affirmative defense. SOL is still an affirmative defense against an OC, and IMO probably the only one a pro se is going to be able to win.

My OC suit was dismissed without prejudice. Even being the OC they could only come up with one statement that didn't even show a payment. They didn't even provide a generic card agreement. Now, an OC with a ream of statements back to zero, payment information, a competent witness, etc would be a tough cookie to beat.

This.

The biggest defense against an OC, say, Crappybank for example, is convincing the courts that Crappybank's records are crappy. You are not proving that you are not liable here, you are acting as a roadblock for when Crappybank tries to prove that you are liable.

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There are several factors to consider. First, how good is the law firm opposing you? OCs use the same law firms as JDBs, and they are generally not that good. They don't expect opposition, and when faced with an experienced pro se, they don't know what to do. It's a business decision they have to make; it it worth fighting somebody who knows how to make you bleed money, only to wind up with an uncollectible judgment if you win? Often it is not. They'll put up token resistance, but if they don't have the documentation to win, they will sometimes give up. The only reason they sued in the first place is because you appear to be a good prospect for collection if they win.

If you think you may be sued next year, get everything out of your name. You want them to see a blank screen when they go after your info. Wage garnishment is tough, there are only a couple of states that don't allow it. Be sure to read the exemptions.

Discovery is your best chance to win. Hit them with everything you can, provided you know what to ask for and how to ask for it. Very often the atty will make a stupid mistake that may cause them to lose their case. Even so, you have to know what documents they have before you can formulate a defense.

If they don't produce winning evidence the first time, stop asking and don't compel them to produce stuff that will beat you. Another tactic is to serve admissions right after production of documents and get them to admit they don't have enough to win. Often they will contradict themselves.

Be prepared to have their evidence stricken if they try to sneak it in at the last minute.

Make it clear that you want a jury trial if allowed in your rules. More expense for them.

Be prepared for the standard SOP.....discovery, then a quick motion for summary judgment. Study MSJ and download "Opposition to MSJ" from your state.

Have case law to support your theories. Case law works both ways. If they can't produce the application, but they produced one in ten other cases, that makes your position stronger. If they can't prove you applied, the card is unsolicited in violation fo Reg Z 226.12. Unsolicited cards are sent with no cardholder agreement as a rule. Therefore, how could you agree to terms you never received? They can NEVER prove you received an agreement.

Read the interest law for the OC's home state. There are some good things in some of these codes, they'll never expect you to hit them with this stuff, as a rule they don't even know these laws themselves. More study for them, more money for them.

See if "use and acquiescence" is a law in your state and if so, under what department; state banking, etc. State banking commissions have zero authority over national banks.

Request oral argument when you can. Make them send a lawyer to court.

the OC rarely misses the SOL, but if they do, be ready. If they try to invoke yours because it is longer, argue that they insisted on their choice of law, you agreed, and there is no reason for any court to change that. If they don't like their own choice of law, attack the idiotic interest rate that choice of law allows them to charge and watch them squeal.

If, after a long period of time, they do not pursue the case and have no evidence, file your own MSJ. Hard to win these, but they MUST respond or they lose the case. These are argued in court. Again, more expense for them. Sometimes they are only allowed a certain amount for atty fees in these agreements. Sometimes this is right in the complaint. No OC is going to pay 10,000 in legal fees to chase a credit card bill for that amount of less.

Demand that they produce a day one accounting fom zero. They'll probably refuse unless the card is two or three years old. Dispute the starting balance and provide instances of hacking, security breach, overbilling, and other complaints. There are hundreds of consumer complaints against these lenders, just Google it. One woman received a billing statement for 286 million dollars. These companies are not infallible. Their systems crash, they absorb records from other companies, etc. All kinds of mistakes are made.

Know your local judges! See how they rule in these cases and be prepared for a bad one. Object to everythng to preserve it for appeal. No JDB attorney is going to go through this, unless there is a possibility of a bad precedent.

Study similar cases from your state to see how victories were achieved.

Study the Rules of Evidence to see what your state accepts. Some robo-signed junk affidavit won't fly. Often, that's all they have, and these people are easy to tear apart if they appear to testify.

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Exactly. Make them bleed money the more they spend the less likely they will be willing to pursue your case. Think about it from the other side, one of those lawyers might have many cases in your state, and could even live some hundred miles away, just by answering and making them lose time is enough to at least get a good settlement. They don't want to fight they want fast money. They are more interested in trying to collect those default judgments than your case. I got for example a settlement offer of 50% off the amount with no interest just by answering. I counter offer for an additional 50% off, so 25% of the actual bill of 2009 and they are considering it, the lawyer is not authorize to do it but he is waiting for the answer from the OC, and I bet you they will agree since even if they win, they won't collect crap I owe nothing and my wages are exempt. And they might do a procedural mistake in the process and lose the case. Remember it cost money to have your case in court and they are not guarantee to collect anything after a judgment if you are exempt.

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Exactly. Make them bleed money the more they spend the less likely they will be willing to pursue your case. Think about it from the other side, one of those lawyers might have many cases in your state, and could even live some hundred miles away, just by answering and making them lose time is enough to at least get a good settlement. They don't want to fight they want fast money. They are more interested in trying to collect those default judgments than your case. I got for example a settlement offer of 50% off the amount with no interest just by answering. I counter offer for an additional 50% off, so 25% of the actual bill of 2009 and they are considering it, the lawyer is not authorize to do it but he is waiting for the answer from the OC, and I bet you they will agree since even if they win, they won't collect crap I owe nothing and my wages are exempt. And they might do a procedural mistake in the process and lose the case. Remember it cost money to have your case in court and they are not guarantee to collect anything after a judgment if you are exempt.

Thank you both.

I actually posted this not just for me but others that have this to contend with so it will help.

I had one OC sue me using WWand . I answered, and they went for judgment on the pleadings... Before the hearing on that, even armed with an opposition that an attorney, from here, helped me with I panicked.

I elected private arb. which was permissible in my state even at that

late date in the process, and got a dismissal with prejudice for dropping

my claims in JAMS.

I would continue along that vein as long as JAMS is available.

If AAA, I probably would also.

And the reason is that there really seems to be little defense against an OC.

One question though...

If an account opened way back under one owner.... Lets say for the sake of argument, B of A and then FIA comes on the scene and your suit now is with FIA and not B of A... How viable is standing on this?

Or Lets say Monogram Bank of Georgia who was the original servicing bank transferred/sold to GEMB, who is a servicing bank, sells/transfers an account to

World Financial Capital Bank as a new servicing account for a retail creditor.

If you were sued by the later, yet had originally signed on with Monogram

would standing come into play.

Legaleagle, what you posted along with Coltfan1972's standing thread about great explanation of standing on here is outstanding and perfectly understandable.

I wish we had for each affirmative defense that we have been told to use...

an in depth explanation of why not to use them.

And what we should answer a summons with if we are told in our state rules,

that we need to bring it up in our answers or they can never be used.

It has been suggested to use it all and see what sticks. I now know better.

But some of the affirmative defenses seem to make sense to me and an

in depth reason why not would help many.

Anyway, thank for you replies...

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If an account opened way back under one owner.... Lets say for the sake of argument, B of A and then FIA comes on the scene and your suit now is with FIA and not B of A... How viable is standing on this?

Does not apply. FIA card services is BofA's credit card division. You are dealing with the OC when you are sued by FIA. Every lender has a credit card division, some of them are under different names.

I wish we had for each affirmative defense that we have been told to use...

an in depth explanation of why not to use them.

We do. Coltfan made an excellent post for affirmative defenses. Most of them simply do not apply to a collections case. In rare cases they do, then you use them.

Or Lets say Monogram Bank of Georgia who was the original servicing bank transferred/sold to GEMB, who is a servicing bank, sells/transfers an account to

World Financial Capital Bank as a new servicing account for a retail creditor.

Banks absorb / buy each other, which means they are still the original creditor by law. It just makes it harder for them to sue because they have to prove the chain of custody of the account. Records I buy from you and sell to someone else get fuzzier as they go along. Imagine subpoenaing three different affiants who all claim to have personal knowledge of your account. What you want to hope for is that they sell the account to a junk debt buyer.

And what we should answer a summons with if we are told in our state rules,

that we need to bring it up in our answers or they can never be used.

Why would you want to preserve a useless defense? It will just be stricken by the other side. Like pleading insanity to a speeding ticket. Think it will work?

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