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In 2008, I was in the market for some furniture and wanted to build up my credit. I decided to go to Rooms-to-Go. After picking out a set I liked, I sat down with the salesman to negotiate the terms of the loan. I explained that my current budget wouldn't allow me to go over $80.00 per month and he said he understood. I signed my name and the furniture was promptly delivered to my home. A few weeks later, I received my first bill. It was about three times as much as I could reasonably afford. I immediately called Rooms-to-Go and requested to speak to a manager. I explained the situation, what the salesman and I had spoke about and figured there must have been a mistake. The manager was less-than-helpful. I then decided to reach out to the company that my loan was actually through; TD Financial. I explained to them I was unable to make this payment and asked the payment to be reduced. They told me the terms were set and could not be renegotiated for six months of on time payments. My pleas fell on deaf ears, they didn't care about my financial situation or my credit score. I paid the first payment, to avoid being charged with credit fraud and didn't give another dime.

Rooms-to-Go and TD Financial screwed me. They lied to my face, ignored my objections and refused to help me. The furniture itself began deteriorating nearly as soon as I got to use it. The seams split, the springs poked out and the recliners gave up on working without a hard jolt. Eventually, I ended up having to wire the recliner in the closed position, as it started popping open intermittently.

So, for 6 years and 6 months I've dealt with this stain on my credit. As you may know, at 7 years it drops off. I've steadily built my credit up with cards and a better financial situation but this blemish was about to drop off. Then I got a letter in the mail. A very conveniently timed letter from Velocity Investments, LLC, saying that I was being sued for the debt.

I was livid. How dare they try to come BACK to screw me, when I have just a few weeks before this whole issue would be forever behind me. I read articles and watched videos and researched as much as I could.

It turns out that buying debt is a multi-faceted (and very scammy) business. Companies that write off loans sell the debt for pennies to collection agencies. The collection agencies will attempt to collect for a time and, when it goes uncollected, it will be resold. Over and over, changing hands until it reaches one of the bottom-of-the-barrel collectors. Velocity Investments, LLC is one of these bottom feeders.

i love clark howard. www.clarkhoward.com

Their entire business model is as follows:
Buy old debts that are nearing their 7-year drop off.
File lawsuits against every name on their spreadsheet.
Try your damndest to get a default judgment against people.

How do they accomplish getting a default judgment? Easy. The first summons is basically formalities. Nothing will be done, unless either party doesn't show. I went to my first summons and Velocity Investments, LLC was not there. The Judge asked me if I wanted to throw out the lawsuit, I said yes and that was that.

Why didn't Velocity Investments, LLC have representation then? Because, they aren't interested in litigation or fighting for the money. They let everyone who's going to show up to the meeting, throw it out of court. Anyone who missed their first summons will likely miss the second and Velocity Investments will get a default judgment against all these individuals, garnishing wages and securing money from almost-seven-years-old debt.

Below I've added a few links that back up my claims and tells others' stories.


http://www.creditinfocenter.com/community/topic/324059-i-won-against-velocity-investments-llc/#comment-1299215
http://www.clark.com/know-your-rights-when-dealing-debt-collectors

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I know consumer attorneys are supposed to be compassionate.   That is why it took me a while to post this response.

I do not think you were screwed.   I think you were an uninformed consumer.    I think forms were shoved in your face and you trusted they said what you told them you could afford and you maybe did not read them as closely as you could or you did not read them at all.  

What was the actual cost of the furniture you picked out and how long would it have taken to pay off at $80/month?   Sometimes that should have been your first clue your payment was not going to be $80/month (you know if it's going to take you 10 years to pay off a sofa at that rate).

 I took out a "furniture loan" when I was in college and not only was the dollar amount of the payment disclosed but the number of payments, and annual percentage rate was also disclosed.   These are called TILA disclosures and only reckless fly by night finance companies do not give them.  I have seen some TILA disclosure violations so it's certainly possibly in your case but I have never seen a situation where a finance company such as TD Financial handed over a check before getting a signature on TILA disclosures (even faulty ones) and that document would have told you that your payment was a lot more than $80/month.

My personal experience was that I was brought into a separate office where they took down my personal and income information on a credit application.   The person then called the "main office" and ran my credit and I was approved up to $x.    My furniture was below that amount so they drew up the promissory notes and TILA disclosures in the office and handed them over for me to sign.   I do not think they went through the forms with a fine tooth comb with me but frankly even at age 19 I understood it was my responsibility to read them before I signed them.

What documents were attached to the summons, if any?   In some states, they have to attach the promissory note to the complaint.   

if I were to consult with 100 people with similar complaints, I would find that 99 signed a promissory note with proper TILA disclosures and they were so happy to take home their new furniture they did not bother to read what they signed.   In the other case, I would find they probably signed blank forms but good luck proving it.

No finance companies do not care about you or your financial circumstances.   They care about making you pay back what you agreed to pay.   In some circumstances they take advantage of consumers and violate consumer protection laws and that's when you call a lawyer.    

There is actually nothing illegal about buying old debts for pennies on the dollar and then collecting the full amount of the original debt.   The problem I have with this business model is that they normally cannot prove the balance or ownership.   

Promissory notes tend to be a different animal.   They usually have the note, the note is drawn out to (payable to) whoever has that note in their hand (if you find a promissory note payable to holder then you are literally entitled to collect it), and they usually have your signature on it.   

 

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I should also point out you might want to answer that first summons if you have been served.   The second summons is normally a judgment debtor rule.

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Hold your horses there. Some interesting things in this story:

1) As neweuquol said, did you read the paperwork. The salesperson can say whatever they want but the paperwork defines the terms of the loan and that is what you needed to read, if not at the office, then certainly during the cooling down period

2) Once you got the first bill, did you even offer to return said furniture to the store?  Did you also call the store and complain once you noticed the furniture was failing too early or at an accelerated rate

3) Your managing to get a debt buyer does not has so much to do with the fact that they do not have the paperwork but that you got lucky and the legal statute of limitation has passed (time to sue on court). In Georgia, that is 6 years from the first default. You probably noted that in your answer and that is why they backed off. SOL is an affirmative defense which means the defendant must bring it up in order for it to the considered.

So, you got and kept the furniture, made one payment and no more, did not offer to return the furniture, and now cannot be sued on the debt. I say you made out good and should just walk away. Yes, the banks can sell debts to collectors for pennies on the dollar and those collectors in turn can use whatever legal mean necessary to collect up to 100% of that debt. There is nothing wrong with that as long as they stay within the bounds of the law.

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Thanks for bringing up something I forgot to mention.   The SOL on a promissory note is usually much longer than an open account so I assumed it would not be passed SOL.   It may very well be past SOL.

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added they also filed the lawsuit past the statute of limitations. dont get me wrong i dont ripping people off. i do pay my debts. i would have better paid the original holder of the note, but they charged it off so quick and wouldnt accept payment after that point. my main point was that ROOMS TO GO sells cheap furniture and is not worried about the risk in lending. they have outside finance companies carry the notes and they get their money in a few days. 

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Just now, mrwilliam1157@yahoo.com said:

added they also filed the lawsuit past the statute of limitations. dont get me wrong i dont ripping people off. i do pay my debts. i would have better paid the original holder of the note, but they charged it off so quick and wouldnt accept payment after that point. my main point was that ROOMS TO GO sells cheap furniture and is not worried about the risk in lending. they have outside finance companies carry the notes and they get their money in a few days. 

Every single furniture store uses outside finance companies to move merchandise.   Maybe it is beyond SOL and that would be great for you in this case.   As far the rest of it, I did not need to purchase furniture from Rooms to Go to know it's probably garbage :)

 

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Most stores use finance companies anymore for credit. That does not relieve you of the responsibility to read over the contract and note before you sign it. I am shocked however that Rooms to Go did not try to repo the sofa and they might still be able to (although it is worthless at this point) as you probably signed it as collateral in the contract.

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@mrwilliam1157@yahoo.com The SOL might be 4 years instead of the typical 6 in Georgia. Here's the caselaw you can use to see if your situation applies.

http://www.creditinfocenter.com/community/topic/327780-being-sued-in-georgia-magistrate-by-midland-on-former-dellwebbank-account/#comment-1344132

 

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5 minutes ago, CCRP626 said:

The SOL might be 4 years instead of the typical 6 in Georgia.

It will be 6 years.  Those contracts are not written with the furniture as collateral.  They are typical revolving door credit accounts.  The only contract for furniture that would fall under a shorter SOL if written in another state would be rent to own furniture where the creditor specifically has stated they will repossess the furniture in the event of default.  In this case Rooms 2 Go didn't under write the purchase a third party did.  The third party doesn't want the furniture and clearly made no attempt to take it as collateral for the default.

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But either way, the SOL is gone now, so it really does not matter to the OP if it's 4 or 6 years.  OP said that the purchase was in 2008, and he only made the first month's payment.  That means that even if that first month's payment was in January 2009, and the next month was first delinquency, then SOL would have run in early 2015.  Even if you try to argue charge-off as the start of the SOL clock, and add 6 months for charge-off time, which I know is not set in stone(could be shorter or longer), this account's SOL would still have run in 2015.  Velocity took a crack at the OP, and when they did not show, case dismissed.  Even if they or someone else were to try again, SOL should be gone on this one.

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It is really moot which SOL applies in this case because the creditor, whoever it is, has allowed it to expire regardless of whether it is 4 years or 6 years. They knew it but tried to sue anyways and when the OP answered, they knew to back off because sooner or later, the OP would have realized what the legal SOL (not to be confused with reporting SOL which is still 7 years) was passed and raised that as a defense which would have cost the creditor a ton of money for nothing.

I usually do not purchase new furniture and I never purchase anything on credit so I have no clue how furniture store credit works. I would have assumed that they would put the furniture put as collateral but I guess not. Learned something new.

I just commented because the OP seemed to think it was wrong for a company to purchase a debt for pennies on the dollar and then sue them when the OP thought he was wronged at the store. Whether this is moral or not is something I do not want to discuss but the financial company and/or the JDB did not really do anything illegal. It sounded like the OP did not take the responsibility to read the paperwork before signing and understanding the terms and then did not offer to return the merchandise when they found out the terms were not what they expected. The OP is not as much of a victim here as they claim to be either.

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Outside of the OP's situation with furniture quality and all that, if Velocity is commencing lawsuits well after the longest possible SOL expired they should forward the lawsuit detail to their state atty general/CFPB. If they're done with it because their case got tossed that isn't really helping the other people getting default judgments for time barred debt. @mrwilliam1157@yahoo.com if you were livid about having to spend time to show for this did you ever look into an FDCPA counterclaim when answering or give your info to a consumer attorney?

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I will admit this, he still has a chance to file a counterclaim since the SOL on FDCPA claims is 1 year. A complaint to the CFPB and or State Attorney General might help although GA is generally a creditor friendly state in the courts so I doubt the state AG will help on one complaint.

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I did not know if I could file a grevience for attempting to sue past the sol.  Is it possible?  I wouldn't really care about myself, but I'm thinking about all the ones that are getting default judgments against them beyond the sol. I understand they have right to collect on purchased bad debts, but the law is the law. If you don't fight back then who is governing the legal right to collect.  No one unless you have an attorney.  The way I see it is if you can afford an attorney, then you can afford to pay for your bad debts. 

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5 hours ago, WhoCares1000 said:

They knew it but tried to sue anyways and when the OP answered, they knew to back off because sooner or later, the OP would have realized what the legal SOL (not to be confused with reporting SOL which is still 7 years) was passed and raised that as a defense which would have cost the creditor a ton of money for nothing.

 

1 hour ago, CCRP626 said:

Outside of the OP's situation with furniture quality and all that, if Velocity is commencing lawsuits well after the longest possible SOL expired they should forward the lawsuit detail to their state atty general/CFPB. If they're done with it because their case got tossed that isn't really helping the other people getting default judgments for time barred debt.

 

29 minutes ago, mrwilliam1157@yahoo.com said:

I did not know if I could file a grevience for attempting to sue past the sol.  Is it possible?  I wouldn't really care about myself, but I'm thinking about all the ones that are getting default judgments against them beyond the sol. I understand they have right to collect on purchased bad debts, but the law is the law.

The law does not state that they cannot file a lawsuit after the SOL expires.  Even the FDCPA states "taking an action they cannot legally take is a violation"  however, filing after the SOL expires is only an FDCPA violation IF the consumer pursues it.  What the SOL does is give the consumer an affirmative defense IF they raise it in their answer.  Many consumers don't know there is an SOL and fail to raise that issue only to discover that fact after they lose and then it is too late.  If the case goes to verdict and the Defendant never objects that the suit is beyond the SOL then the courts deem they have waived their right to that defense.  

While an individual suit could be filed against Velocity for the violation that one alone won't stop them.  Bottom feeders like them count on the default judgment where consumers don't bother to defend and make it an easy collection.  Losing one FDCPA claim for a thousand dollars is factored into the cost of doing business.  What will make them pay attention is the CFPB.  I would file a complaint with them.  If they get enough about a JDB (Midland and PRA spring to mind) then the CFPB will sue them and slap them down.

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4 hours ago, Clydesmom said:

 

 

The law does not state that they cannot file a lawsuit after the SOL expires.  Even the FDCPA states "taking an action they cannot legally take is a violation"  however, filing after the SOL expires is only an FDCPA violation IF the consumer pursues it.  What the SOL does is give the consumer an affirmative defense IF they raise it in their answer.  Many consumers don't know there is an SOL and fail to raise that issue only to discover that fact after they lose and then it is too late.  If the case goes to verdict and the Defendant never objects that the suit is beyond the SOL then the courts deem they have waived their right to that defense.  

While an individual suit could be filed against Velocity for the violation that one alone won't stop them.  Bottom feeders like them count on the default judgment where consumers don't bother to defend and make it an easy collection.  Losing one FDCPA claim for a thousand dollars is factored into the cost of doing business.  What will make them pay attention is the CFPB.  I would file a complaint with them.  If they get enough about a JDB (Midland and PRA spring to mind) then the CFPB will sue them and slap them down.

This is correct.  If I had a dollar for every time a consumer came to see me after they waived a defense that would allow them to bring a defense of prescription (that's what we call SOL) .............

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I was recently sued by CACH, LLC a company that bought a old furniture debt from Ashley furniture. I moved from Kansas to Tennessee in the last few years. The account was originated in Kansas and was charged off before I moved. The SOL for Kansas is 3 years but for Tennessee it would 6. Does this fact matter in your suit?

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I'm not an attorney but since the DC has to file in the county you live in I would assume that it would be in the state you currently reside.  However the DC is only required to  send the summons to appear to your last known address.  You may want to periodically check with the county magistrate  courts at your last known address to be sure you don't have a  summons to appear.  If you don't appear they will get a default judgment against you and end up garnishing your wages.  

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22 minutes ago, vjack09 said:

I was recently sued by CACH, LLC a company that bought a old furniture debt from Ashley furniture. I moved from Kansas to Tennessee in the last few years. The account was originated in Kansas and was charged off before I moved. The SOL for Kansas is 3 years but for Tennessee it would 6. Does this fact matter in your suit?

If the SOL had not expired in KS prior to your moving then it was alive when you moved to TN and the TN SOL would apply.  Unfortunately TN has one of the longest SOL's in the country for suing on stuff like this.

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I was reading that the SOL for retail debt in 4 years and that the 6 years only applies to bank loans and breach of contracts.  Do you know if this is true?  If this is true then the SOL has passed on this account.

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I know it basically break down to collateralized debt.  It they have collateralized the loan then the longer sol would apply.  But if a credit card the lesser SOL apply.  They can still attempt to sue you. No one checks to see if it is within SOL other than you and your attorney.  They only have to send the lawsuit summons to your last known address. So if you never get it and don't answer it  then they will get a default judgment against you and garnish your income. 

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38 minutes ago, vjack09 said:

I was reading that the SOL for retail debt in 4 years and that the 6 years only applies to bank loans and breach of contracts.

NO.  The SOL is based upon whether it is a written or oral contract.  In KS the SOL on a written contract is 6 years (have no idea where you got 3 or 4) and in TN it is 6 years.  

Breach of contract is the REASON they sue (failure to make payments is your breach of the contract) it is not what determines the SOL that applies.  If you financed furniture then you signed a written contract to buy the furniture and make payments.  The SOL in KS on that is 6 years same as TN.

AGAIN:  WHEN did you default on the payments?

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