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Being sued by portfolio recovery


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Hello,

last year midland funding attempted to serve me over a Citibank card for $6000. They were never able to do so and apparently sold this debt to portfolio recovery and they have now succesfully served me on what appears to be the same debt. I filed my answer that I didn't owe them any money and SOL had expired. 

Honestly, I do recall having a Citibank credit card or a few but don't recall this one specifically. We had some unfortunate things hit us and decided to turn all of our debt over to a debt counseling place. We must have given them 18 credit cards. I do know that a few of them didn't want to play and wouldn't lower the interest rate so we walked away from them because we simply couldn't afford to pay the ones with high interest rates. 

I just yesterday received a disclosure statement from them which has and affidavit stating this said credit card was sold to portfolio recovery and what appears to be a 3 page file with account numbers a bill of sale assignment and 3 months of statements showing the last payment in October. 

 

I understand I need to be giving them the same statement of disclosure but am not sure as to how to tackle this. 

 

Any my feedback or help would be greatly appreciated.

 

 

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3 hours ago, First rodeo said:

I understand I need to be giving them the same statement of disclosure but am not sure as to how to tackle this. 

Any my feedback or help would be greatly appreciated.

The court documents probably have a bunch of scary language about the penalties for not filing a disclosure statement.  But you should consider carefully whether you really have anything to disclose.  You might not.

A motion to compel arbitration is really the only chance you have to prevail in this case.  You'll want to study up as much as you can and get the motion filed before your first pre-trial conference, if not sooner.

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Also, did you get a letter from citibank when they sold the account to midland?  Since about 2013, citibank usually sends a letter when they sell an account, and that letter usually contains language that the assignee may not resell the account.  The forward flow agreements I've seen since 2013 also contain this language.

This is not important for the court case, where all you'll want to do is file a motion to compel arbitration.  But it could be useful against portfolio if they pursue the case once in arbitration.

4 hours ago, First rodeo said:
last year midland funding attempted to serve me over a Citibank card for $6000. They were never able to do so and apparently sold this debt to portfolio recovery.
 
 
 
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2 hours ago, CCRP626 said:

Citibank, Portfolio and Midland all have CFPB orders against them to research but get your MTC Arb done first to get this out of court.

Yes, that is all correct and I agree completely.  Citibank did adopt the no-resale language even before the CFPB consent orders though.

Edit: OP also stated "I do recall having a Citibank credit card or a few"

If OP had more than one citibank account, It could be that the midland account is a different account than the portfolio account.  The sale of an account directly from midland to portfolio is not at all that common. 

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Wow! Thanks for taking the time to respond.  I am a little intimidated by all the paperwork. Are you saying that I don't need to send a disclosure statement? I thought I saw somewhere that if you don't send this within 40 days they can still get a default judgement? Sound right? 

Regarding this motion for arbitration..... Is this something that is usually accepted? 

I am self employed so they would have a hard time garnishing my wages. I understand they can get a lien on my house though or even clear out an account.  How do they have a leg to stand on? 

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8 hours ago, First rodeo said:

Regarding this motion for arbitration..... Is this something that is usually accepted? 

I am wondering if I  should just try and settle?

Get the MTC Arb in as mentioned above and they'll be coming to you with a settlement offer. The template is in that strategy and steps of arb thread linked to earlier. You'll see in your cardmember agreement it's covered by the FAA (Federal Arbitration Act). It's already been settled from the U.S. Supreme Court on down you get to arb by the agreement. It's a federal law Arizona can't rule against, if they do, you get an appeal right away. Follow your rules of civil procedure and local rules for filing.

With an approved MTC Arb your case will be required to be stayed, so outside of coming back for a possible status hearing to see how arb is progressing, the case will halt in court. You'll have a court order to arb, you'll do your part by initiating with JAMS or AAA (see your agreement) then the Plaintiff will have to pay well over $1,000 to start. It will be either pay or be in violation of a court order, so they'll be prone to settle with you which leads to dismissal.

There's a few things you can do that will show you waive your right to arbitrate, such as not initiating arb after the MTC is approved. That's about all the Plaintiff will have to keep this in court.

 

8 hours ago, First rodeo said:

Are you saying that I don't need to send a disclosure statement? I thought I saw somewhere that if you don't send this within 40 days they can still get a default judgement? Sound right? 

For the disclosure statement you mention, is this the one under Rule 121? That's not even due until 40 days after your answer is in. Your case will be stayed by that time if you've done the arb filing, so Rule 121 won't apply. The idea is the court is done with your case, it's off to private contractual arb (not to be confused with court ran arb) where your agreement and the arbitration firm's rules are what you go by.

Rule 121 is discovery related. Participating in discovery can also waive your right to arbitrate so if discovery or Rule 121 is something the Plaintiff is pushing for to get you to waive your right to arb, you'd make sure to point out discovery/Rule 121 should be stayed but this should only come up if you delay filing for arb.

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@First rodeo Those are the two arbitration administrators usually found in cardmember agreements. You'll want to make sure you have the cardmember agreement for your account when it was last active or the argument that can be used against you is there isn't a valid agreement to arbitrate. Using the one from the correct time period from the CFPB archives is probably fine but if challenged an option is to get it from Citi. If you call them they'll say no longer our account, can't help you but they will provide the one for your account if you do a CFPB complaint against Citi for failure to provide your cardmember agreement.

https://www.jamsadr.com/

https://www.adr.org/

http://www.consumerfinance.gov/complaint/

 

 

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Failing to make disclosure cannot legality result in default judgment against you. Unless you have some documentation proving you paid this debt or otherwise don't owe it, forget about disclosure for now. The only other reason you'd want to make disclosure is if you have some novel defense strategy.

As others have said, I'm also 100% in favor of arbitration for cases like yours. The only time I've seen it not work is when people don't do it right away or the judge is asleep at the wheel. You have control over exactly one of those scenarios so focus your energy there. 

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13 hours ago, First rodeo said:

Thanks so much CCRP626! This is great info! I will do this right away. Quick question.... what does "JAMS and AAA" Stand for?

First rodeo,

If you want this to succeed,   please do exactly what others  have advised you to do and start right away.    The members here who advise on arbitration are extremely knowledgeable,  and Harry Seaward knows AZ arbitration as well or better than most AZ lawyers.   We have had a number of AZ posters like you who have had their cases dismissed by using the arbitration strategy.    But they had to take the advice that was given and work at it.

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I absolutely plan on getting this Doc filed with the courthouse tomorrow afternoon. Can you pls clarify the verbiage on the MTC-ARB? When I pulled the form from the justice court website it's just a fill in the blank form and the example you posted here is much different looking.  Does the verbiage need give filled in exactly like the example on the 8'th post? 

Again, I really appreciate your feedback and assistance!! It has been so helpful! 

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Most card agreements say you have to notify 'them' in writing if you want to elect arbitration, so I would send a letter to Portfolio's attorneys notifying them that you are electing arbitration to settle the claims they have made against you.  You send this letter at the same time you file the MTC, but be sure to attach the letter AND the card agreement to your motion.

Your motion should cite A.R.S. 12-1502.  Because AZ has crystal clear arbitration statutes, your motion doesn't have to be flowery or get into a bunch of case law.  You simply ask the court to order the parties into arbitration pursuant to A.R.S. 12-1502(A), the attached agreement and demand letter.  You can also ask the court to dismiss Portfolio's claims on the grounds that the court no longer has jurisdiction, but don't hold your breath.  A.R.S. 12-1502(D) incorporates an automatic stay of proceedings the second you file your MTC, so that should theoretically stop the court from granting an MSJ, although as I stated in my previous post, courts don't always follow the rules and we have seen them grant summary judgment in the face of a pending, and even granted, MTC.  Be prepared for this possibility, and the possibility that the court could deny your MTC, and the fact that you will have to appeal to get it reversed.

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Uh-oh... I just pulled the citi agreement and while it does state 'Either you or we may, without the others consent, elect mandatory, binding arbitration for any claim, disputer, or controversy between you and us ( called claims).  

However, there is a small paragraph below that states "claims filed in a small claims court are not subject to arbitration, so long as the matter remains in such court and advances only an individual claim"

From my extremely limited knowledge it sounds like this may not work for me as this is filed in the Justice Court.

Is this correct?

Arbitration clause.pdf

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14 minutes ago, First rodeo said:

Uh-oh... I just pulled the home depot citi agreement for 2014 and while it does state 'Either you or we may, without the others consent, elect mandatory, binding arbitration for any claim, disputer, or controversy between you and us ( called claims).  

However, there is a small paragraph below that states "claims filed in a small claims court are not subject to arbitration, so long as the matter remains in such court and advances only an individual claim"

From my extremely limited knowledge it sounds like this may not work for me as this is filed in the Justice Court.

Is this correct?

Arbitration clause.pdf

Justice Court is not small claims court. You're good to go.

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Mr. Harry Seaward- I can't thank you enough. I have everything ready to go but also just received a call back from an attorney that handles these things. I know that he doesn't make any money if I go with this plan but he says arbitration could cost me $$$ thousands?? I don't want to waste any budget. He charges a flat $1500 but only has a 70% success rate. This would be the path of least resistance but may also cost $$$. Do you concur that the arbitration route could cost $$. The idea is simply to get them to dismiss or settle correct? 

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Your initial fees are capped. I think Jams is $250 to get the case going.  The only way you could get stuck paying more is if Portfolio follows you into arbitration, they win and as part of their award you are ordered to pay their costs. The attorney you spoke with is operating on the premise they will follow.  JDB's have reportedly walked away from $30k debts when the court ordered the parties into arbitration. Assuming that's true, it would seem unlikely they will chase after an $8k debt. 

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The problem with court is JPs here tend to allow the plaintiff's evidence to be admitted over all objections. Evidence admission is discretionary upon the trial court, meaning an appellate court is only looking for an abuse of discretion or error of law, and not whether they themselves would have allowed the evidence or not. You would have to show the admission overstepped the judge's discretion or violated some law. Let me tell you from personal experience that neither of these are easy. This is why I've gone full tilt in favor of arbitration. It's the most effective deterrent to having the JDB pursue their claims. 

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