Midland Funding

[LarkBea]

Hello and thank you in advance for any help.  I'm afraid I am a bit at sea with all of this.

I live in Iowa and am a social security recipient.  I own no property or land.  Apparently, Midland Funding feels I am a good target for a lawsuit as I received a letter with notice to cure from a law firm on their behalf.  I did respond asking for validation as I am fairly certain the debt they are attempting to collect on is outside the statute of limitations in the state where the contract was entered (Indiana).  I am uncertain as to Iowa's law.  Some sources quote 10 years while others quote 5 years.

The debt in question is Barclay's Bank, amount is less than $1000.

Could someone be so kind as to inform me how I proceed from here?

[BV80]

19 minutes ago, LarkBea said:

Hello and thank you in advance for any help.  I'm afraid I am a bit at sea with all of this.

I live in Iowa and am a social security recipient.  I own no property or land.  Apparently, Midland Funding feels I am a good target for a lawsuit as I received a letter with notice to cure from a law firm on their behalf.  I did respond asking for validation as I am fairly certain the debt they are attempting to collect on is outside the statute of limitations in the state where the contract was entered (Indiana).  I am uncertain as to Iowa's law.  Some sources quote 10 years while others quote 5 years.

The debt in question is Barclay's Bank, amount is less than $1000.

Could someone be so kind as to inform me how I proceed from here?

According to the Iowa Court of Appeals, a generic cardholder agreement is not a "written contract".  Therefore, the 10-year SOL would not apply.  Read Gemini Capital Group v. New.

https://scholar.google.com/scholar_case?case=11383887001819432978&q="GEMINI+CAPITAL+GROUP+v.+New"&hl=en&as_sdt=4,16

In what year and in which state did you default?

[LarkBea]

Thank you for your reply.

I defaulted in Indiana.  I am not positive of the year I defaulted however I believe it was in 2010 or 2011 (accident in 2010, disabled for SS purposes in 2011).

In the debt validation letter I sent, I did request information on last payment received.  I understand if there is a question on whether or not the debt is time barred, a creditor or their attorney should provide that information.  Whether or not that is true, I don't know.

[BV80]

13 minutes ago, LarkBea said:

Thank you for your reply.

I defaulted in Indiana.  I am not positive of the year I defaulted however I believe it was in 2010 or 2011 (accident in 2010, disabled for SS purposes in 2011).

In the debt validation letter I sent, I did request information on last payment received.  I understand if there is a question on whether or not the debt is time barred, a creditor or their attorney should provide that information.  Whether or not that is true, I don't know.

If you left IN before the SOL passed, then the SOL is tolled (on hold) in that state.   If you were to move back there 10 years from now, they could sue you.

When did you move to Iowa?

 

[LarkBea]

I moved to Iowa in 2013.

[BV80]

12 minutes ago, LarkBea said:

I moved to Iowa in 2013.

Okay, the SOL is definitely tolled in IN.   Iowa Code 614.7 says that if a cause of action that arose in another state has been barred that state (the SOL has passed), then it's also barred in Iowa.

The problem is that the SOL in IN has not passed because it was tolled when you moved.   Speak to consumer attorney to see how moving to Iowa affected the SOL.   If you need to do so, contact legal aid.

If you were to be sued, they can't garnish you SS income.  However, if you own a home, it's possible they could place a lien on it in the event of a judgment.   BUT, judgment would not be guaranteed because if the cardmember agreement allows for arbitration, you could MTC arbitration and Midland would probably dismiss and disappear into the woodwork.

If you don't mind, you could please post or upload the letter (your personal identifying information redacted)?

[LarkBea]

Thank you again for your help.  I do not own a home nor do I own any personal property that would be non-exempt under the laws of both Indiana and Iowa.  Again, I have read that debt collectors are not shy about attempting to levy funds even from exempt sources such as social security, so I am concerned about that.  The letter is from a legitimate law firm in Iowa.

I'm not sure how to upload the letter, but I will post the body of it and references.

--------------------------------------------------------------------------------------------------

June 24, 2016

Creditor:  Midland Funding LLC

Consumer:

Assignee of Barclay's Bank, Delaware, Juniper

Amount due:  $866.91

Cure amount: $266.04

Notice to cure

Please be advised we have been retained to represent the creditor and their interest as they relate to an account balance that this creditor claims is owned by you. The account is noted above.

You are now in default of this credit transaction.  You have a right to correct this default until July 23, 2016.  Your default consists of a failure to pay on the above account where credit was extended.

On or before July 23, 2016, pay the same of $266.04 which is lesser than the amount of all unpaid installments due at the time of tender, without acceleration, plus any delinquency or deferral charges which may have accrued.  Please make your payment to (law firm name here).

If you do not correct your default by the date stated above, we may exercise rights against you under the law.  If you default again in the next year, we may exercise our rights without sending you another notice like this one.  If you have questions, write or telephone promptly.  To set up payment arrangements, please visit our website.

NOTICE REQUIRED BY FEDERAL LAW

If you dispute the validity of this debt, or any portion thereof, you should notify this office within 30 days after you receive this notice or the debt will be assumed valid by the debt collector.  If we are notified of a dispute in writing within 30 days after you receive this notice, we will obtain verification of the debt and a copy of such verification will be mailed to you; if a judgement already exists, we will obtain a copy of the judgement and mail it to you.  This office will also provide you with the name and address of the original creditor, if different from the current creditor, provided you make such a request in writing within 30 days after receiving this notice.

Sincerely

 

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

 

 

 

[BV80]

@LarkBea

I would contact a consumer attorney because the letter is possibly in violation of the FDCPA.

The date on the letter is June 24, 2016.   You have 30 days from receipt of the letter to demand validation.   However, this is stated:

On or before July 23, 2016, pay the same of $266.04 which is lesser than the amount of all unpaid installments due at the time of tender, without acceleration, plus any delinquency or deferral charges which may have accrued.

That's less than 30 days, and it says "pay".   It does not say "you may pay".    In my opinion, "pay" with nothing else such as "may" constitutes a demand.  They are demanding payment in less than 30 days.   That demand overshadows (contradicts) the 30-day validation notice.  In other words, it would confuse you.   Considering the 30-day validation period would go beyond July 23, you would be confused as to whether you could send a debt validation request on July 23 or do you need to go ahead and pay by July 23.

While neither Iowa federal courts or the 8th Circuit Court of Appeals have ruled on the issue, other courts, including the 4th Circuit Court of Appeals (Miller v. Payco) and the 7th Circuit (Chauncey v. JDR Recovery) have ruled that a demand for payment in less than the 30-day right to validate is a violation of the Act.

Contact NACA (National Association of Consumer Advocates) for a consumer attorney in your area.  Here's the website:

http://www.consumeradvocates.org/find-an-attorney

I would also suggest posing to the attorney that Midland is vicariously liable for the actions of its attorneys.  Therefore, the law firm and Midland would be included in a lawsuit.  In a successful lawsuit, each defendant could end up owing you up to $1000 for a total of $2000.

[CCRP626]

Midland under its own advertising should leave you alone if you only have Social Security and own no property.

We cease collection activities when we receive documentation indicating that the consumer’s only source of income is from exempt sources, such as Social Security or Supplemental Security Income benefits, and that the consumer has access to no other assets.

https://www.midlandcreditonline.com/who-is-mcm/our-pledge/

[LarkBea]

BV80, thank you so much for your help and bless you.  I will certainly take your excellent advice.

CCRP626 if it were only that easy.  I have read (again, only from what I have read) that they will cease but the onus is on the defendant to prove under discovery that SS is the only source of income and that personal assets do not exceed state indicated exemptions.  I had hoped to halt this before it became a lawsuit but it appears that won't be possible.  Thank you for taking the time to read my post and for your reply.

[CCRP626]

They say cease collection activities, that to me is any of these letters prior to a lawsuit as well. Send them a letter stating you meet the highlighted terms of their pledge and see what they do. No real loss except a stamp. If they bother you again, file a complaint with the BBB, your state atty general and CFPB. Contacting your local legal aid for a consult to see about free/low cost representation if needed would be good as well while you have plenty of time.

You may want to send a copy of the letter to this collection agency as well as Midland's San Diego HQ.

any discovery is court is unlikely for this amount since the court rules usually don't allow discovery without permission in small claims and is burdensome for you along with revealing private and personal info.

[LarkBea]

Thank you for your suggestions.  I will do as you indicated.

If discovery isn't allowed in small claims court, does the judge simply take the defendant's word for it that the only source of income is SS and there are no attachable assets?  Not to be argumentative, simply curious.

[BV80]

@LarkBea

If an attorney accepts your case and files an FDCPA action against Midland, you won't have to provide any evidence of your source of income.

[LarkBea]

Thank you very much.

[CCRP626]

48 minutes ago, LarkBea said:

If discovery isn't allowed in small claims court, does the judge simply take the defendant's word for it that the only source of income is SS and there are no attachable assets? 

First, I'd follow everything @BV80 says but I think sending that Midland Consumer Pledge letter can only help by revealing more activities an attorney can add to the fire against them. They've already got a CFPB order against them for trying to shift the burden onto the consumer when it really all remains on Midland. I'm sure Barclays has a private arb clause to take advantage of as often as it's mentioned in threads here that will remove this from court if they sue. It will cost them more than your case just to participate, so they'll not.

Collection Proof is collection proof. The only time you'd have to provide any proof of exempt income would be if this got all the way to Midland winning a judgment and the court at that point requiring it to be disclosed. If the only funds being sent to your bank are Social Security checks, your bank is required to not allow freezing on the funds (see state/federal law on that). All that and they still don't get a cent out of you.

Also, if this ever gets to court, Iowa rules on small claims may or may not even require an answer. Appearance only required, all claims by Plaintiff considered denied. At that point, tell the Judge we shouldn't even be here (due to Midland's own policies) or if a formal answer is required, list it as an affirmative defense and print their own webpage out. OR just arb per the cardmember agreement.

 

[LarkBea]

Thank you for your good advice.  I appreciate the help I have received here.