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DEBT COLLECTOR COUNTERSUING ON DEBT THEY NEVER VALIDATED


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I RECENTLY SUED A DEBT COLLECTOR IN JP COURT FOR CONTINUING COLLECTION ACTIVITY ON ACCOUNT THEY NEVER VALIDATED.  I SITED TEXAS FINANCE CODE STATUTE ON VALIDATION SO DEFENDANT COULD NOT HAVE OPTION OF MOVING CASE TO FEDERAL COURT.  DEFENDANT FILED AN ANSWER AND COUNTERCLAIM FOR THE DEBT.  MY NEXT MOVE IS TO HAVE THEIR COUNTERCLAIM DISMISSED BECAUSE THEY NEVER VALIDATED THE DEBT AND BY COUNTERSUING THEY ARE MAKING FURTHER COLLECTION ATTEMPTS.  MY QUESTION IS...WHAT CASE LAW DO I SITE TO SUPPORT MY MOTION TO DISMISS THEIR CASE?

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40 minutes ago, Bond Girl said:

I RECENTLY SUED A DEBT COLLECTOR IN JP COURT FOR CONTINUING COLLECTION ACTIVITY ON ACCOUNT THEY NEVER VALIDATED.  I SITED TEXAS FINANCE CODE STATUTE ON VALIDATION SO DEFENDANT COULD NOT HAVE OPTION OF MOVING CASE TO FEDERAL COURT.  DEFENDANT FILED AN ANSWER AND COUNTERCLAIM FOR THE DEBT.  MY NEXT MOVE IS TO HAVE THEIR COUNTERCLAIM DISMISSED BECAUSE THEY NEVER VALIDATED THE DEBT AND BY COUNTERSUING THEY ARE MAKING FURTHER COLLECTION ATTEMPTS.  MY QUESTION IS...WHAT CASE LAW DO I SITE TO SUPPORT MY MOTION TO DISMISS THEIR CASE?

We need more information.

How did you request validation?   They did not respond at all?

Considering you're in state court, they can counterclaim for the amount of the debt.  Even if they're found liable for violating the TX Act, you could be found liable for the debt.

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When you sue a creditor who claims you owe a debt that is still within SOL, they can and will counter sue for the debt.  You can count on it.  This is why one should always make sure either your debt is SOL or your suit is larger than the alleged debt amount.

You can try to settle with them for a mutual dismissal with prejudice.  This is still a good way to wipe out a debt, even if you get nothing out of the suit.

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18 minutes ago, Bond Girl said:

My question is... What statutes do I rely on in completing the Motion to Dismiss?  Basically the Defendant is continuing further collections by filing this countersuit.

I have sued a CA in TX court.  You are NOT going to get a dismissal on this.   In my opinion your claim is baseless because you filed against them first and they have a legal right to a counter claim to yours.  The MAJOR problem you have is they do NOT have to prove that you ever received the validation only that they sent it and producing a copy of their validation response will suffice.  

You need to do discovery first and find out what evidence they have before you go astray and paint yourself into a corner you cannot get out of.

What county and court are you in?

 

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32 minutes ago, Bond Girl said:

My question is... What statutes do I rely on in completing the Motion to Dismiss?  Basically the Defendant is continuing further collections by filing this countersuit.

It doesn't matter that the defendant is continuing collection activity.  There's no statute that says they can't file a counterclaim for the debt.  In fact, TX rule of civil procedure 97 addresses counterclaims.  The claim may compulsory.  In other words, they may be required to file the counterclaim or they might lose the right to sue you for the debt at a later time.

What is the amount of the debt?  I assume it's still within the 4-year statute of limitations?

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Guest usctrojanalum

You are going to be litigating two claims at the same time.  The fact that they did not validate will not be grounds for dismissal.  It may support your FDCPA or state law claims, and you may prevail on those claims.

However, you will need a defense as to the merits of the debt.  If you do not have a defense to owing the money; the claim will not go away.  However, the creditor may be interested in a mutual walk away which is a great way to clear that debt.

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Yes.  The debt is in fact within the SOL.  And yes they are within their rights to countersue.  However, they are attempting to sue on a debt they never validated and there is no evidence they did validate.  I sent them discovery of which they completed and no there is no evidence they responded to validation, so they cannot continue to collect on a debt they never validated right.  The lawsuit in itself is collection activity. 

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7 minutes ago, Bond Girl said:

Yes.  The debt is in fact within the SOL.  And yes they are within their rights to countersue.  However, they are attempting to sue on a debt they never validated and there is no evidence they did validate.  I sent them discovery of which they completed and no there is no evidence they responded to validation, so they cannot continue to collect on a debt they never validated right.  The lawsuit in itself is collection activity. 

Actually, they can continue to collect.   They simply pay a monetary penalty for doing so.

While they may have violated the TX Act by continuing collection, it does not mean they can't sue to collect even if the lawsuit is continued collection activity.   If they are found liable, as I stated, they will simply pay a monetary penalty for the violation.   It does not result in a dismissal of their counterclaim.

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So you agree, that if they continue to collect that is a violation of TX Act and FDCPA.  The fact that they will pay a penalty for violating should be used some how to fight this case well before it is presented in court before a jury.  If I file a Motion to Dismiss the Defendant will know that I will be using this violation against them in court.

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8 minutes ago, Bond Girl said:

So you agree, that if they continue to collect that is a violation of TX Act and FDCPA.  The fact that they will pay a penalty for violating should be used some how to fight this case well before it is presented in court before a jury.  If I file a Motion to Dismiss the Defendant will know that I will be using this violation against them in court.

I don't know if they violated the TX act or not.  You haven't given us enough details. To be honest, there's not much case law on the TX act.

Here's some questions:

1.  How much is the debt?

2.  Why did you request validation?  Was it in response to a first letter that the CA sent you?

3.  What did you say in your letter?

4.  How much might you be awarded for violations of the TX act?

5.  Did you include an FDCPA claim in your complaint?  

 

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1.  The debt is around $1300.

2.  I requested validation when I discovered the account on my credit report.

3. Essentially I said I never received any correspondence from you, so I consider discovery on my credit report to be first contact.  I also asked them to provide the money owed, how calculated, copies of agreement, copy of judgment, identify the original creditor, show that you are licensed in my state, and provide me with your license numbers and registered agent.

4. statutory damages about $100 per violation

5. I did not included FDCPA claim. 

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10 minutes ago, Bond Girl said:

1.  The debt is around $1300.

2.  I requested validation when I discovered the account on my credit report.

3. Essentially I said I never received any correspondence from you, so I consider discovery on my credit report to be first contact.  I also asked them to provide the money owed, how calculated, copies of agreement, copy of judgment, identify the original creditor, show that you are licensed in my state, and provide me with your license numbers and registered agent.

4. statutory damages about $100 per violation

5. I did not included FDCPA claim. 

According to the TX Act, you have to dispute an inaccuracy in the debt collector's reporting or it's records.  It says nothing about validation.  I don't know where in the TX act it says that a debt collector must provide what you requested, and there's no case law to support what you requested. 

You requested a copy of a judgment?  Is there a judgment against you?  Did you make your request based upon the FDCPA?

BTW, there is no violation of the FDCPA in your situation so it's good that you didn't raise that statute.

As @usctrojanalum pointed out, the debt collector might agree to a mutual walkaway considering the amount of your debt.  However, if the defendant doesn't, you will still have to prove your claims and defend against the counterclaim.

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1 hour ago, Bond Girl said:

2.  I requested validation when I discovered the account on my credit report.

That is NOT first contact with you so they were free to ignore the DV letter under the FDCPA and continue collection activity.

1 hour ago, Bond Girl said:

3. Essentially I said I never received any correspondence from you, so I consider discovery on my credit report to be first contact.  I also asked them to provide the money owed, how calculated, copies of agreement, copy of judgment, identify the original creditor, show that you are licensed in my state, and provide me with your license numbers and registered agent.

UGH.  That list.  MOST of that is not required under the FDCPA and therefore not required under the TX Finance Code either.  The problem you have is the TX Finance Code allows you to DV at any time if you invoke it correctly but they do not have to stop collection activity as their first contact with you was your suing.  In my opinion their counter suit is not a violation of either TX FC 392 or the FDCPA.

2 hours ago, Bond Girl said:

The fact that they will pay a penalty for violating should be used some how to fight this case well before it is presented in court before a jury. 

Jury?  Is this in Justice Court or State Court?  If you filed in Justice Court there will be no jury only the Judge.

You are in WAY WAY over your head and I highly recommend you consult an attorney ASAP before you get steam rolled in court and end up paying not only the debt but their attorney fees for this fiasco as well.

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29 minutes ago, Clydesmom said:

 The problem you have is the TX Finance Code allows you to DV at any time if you invoke it correctly but they do not have to stop collection activity as their first contact with you was your suing.   In my opinion their counter suit is not a violation of either TX FC 392 or the FDCPA.

The TX act makes no mention of an initial communication or validation, so that's why I'm wondering if the OP's request was based upon information about the FDCPA.

There's so little case law on the TX act that it's difficult to know how a judge would rule.   Most of the case law seems to be based upon inaccurate information in credit reports.  The OP did not state that she referenced in her letter any information that she believed to be inaccurate.

If the countersuit would be considered compulsory, then it might not be deemed a continued collection activity.  

There's just a number of issues to consider.   Did the OP properly dispute as required by the TX Finance Code?   Will the defendant claim it responded to her dispute?   Was the defendant required to respond?   If the countersuit is compulsory, is that continued collection activity?  What defenses, if any, were claimed by the defendant?

I agree that the OP is in over her head.   Hopefully, considering the amount of the debt, a mutual walkaway can be agreed upon.

 

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According to TX Fin Code the Defendant is required to respond in 30 days.    The Defendant also claims they responded to the request for validation but there is no evidence they responded.  There is nothing.  The Defendant is not really claiming any defenses, they are just filed an answer with general denial, and filed a counterclaim.

 

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23 minutes ago, Bond Girl said:

According to TX Fin Code the Defendant is required to respond in 30 days.    The Defendant also claims they responded to the request for validation but there is no evidence they responded.  There is nothing.  The Defendant is not really claiming any defenses, they are just filed an answer with general denial, and filed a counterclaim.

 

I don't know about TX courts, but in federal court, proof of a response is not required if the party responding can show it has procedures in place to adequately respond.  In other words, they could claim they sent a response, and if they can show they have procedures in place to respond to disputes/requests, that may suffice.  They may not have to prove that you received a response.

Did you speak to an attorney before filing your complaint?   If you don't mind, could you provide a copy of your complaint minus your identifying information?

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1 hour ago, Bond Girl said:

According to TX Fin Code the Defendant is required to respond in 30 days.  

NO.  That is NOT what the code says.

(a) An individual who disputes the accuracy of an item that is in a third-party debt collector's or credit bureau's file on the individual and that relates to a debt being collected by the third-party debt collector may notify in writing the third-party debt collector of the inaccuracy.  The third-party debt collector shall make a written record of the dispute.  If the third-party debt collector does not report information related to the dispute to a credit bureau, the third-party debt collector shall cease collection efforts until an investigation of the dispute described by Subsections (b)-(e) determines the accurate amount of the debt, if any.  If the third-party debt collector reports information related to the dispute to a credit bureau, the reporting third-party debt collector shall initiate an investigation of the dispute described by Subsections (b)-(e) and shall cease collection efforts until the investigation determines the accurate amount of the debt, if any.  This section does not affect the application of Chapter 20, Business & Commerce Code, to a third-party debt collector subject to that chapter.

(b) Not later than the 30th day after the date a notice of inaccuracy is received, a third-party debt collector who initiates an investigation shall send a written statement to the individual:

(1) denying the inaccuracy;

(2) admitting the inaccuracy;  or

(3) stating that the third-party debt collector has not had sufficient time to complete an investigation of the inaccuracy.

- See more at: http://codes.findlaw.com/tx/finance-code/fin-sect-392-202.html#sthash.DkQ5m9j3.dpuf

Note that the section does say that they are only required to cease collection efforts during the investigation if they DO NOT report to the bureaus.  Since you found the debt on your credit report already that would not apply to your situation.  Next note it says if they DO report they are only required to investigate and determine the accuracy and within 30 days tell you the results.   NO WHERE does it say they have to prove you received it only that they did the investigation and responded.

1 hour ago, Bond Girl said:

The Defendant also claims they responded to the request for validation but there is no evidence they responded.  There is nothing.  The Defendant is not really claiming any defenses, they are just filed an answer with general denial, and filed a counterclaim.

If you want copies of all evidence they intend to introduce you have to do discovery.  Texas does NOT require it be attached in their response.  They will claim that their counter suit is proof that they believe the debt is valid and they have a right to collect.  Your next problem is that the courts have ruled that filing a lawsuit to collect a debt is a legal right under contract law and they can exercise it.  As has been pointed out to you TX is unique in that they were REQUIRED to file that counter claim to preserve their rights to sue on the debt given your suit filed.  

If you don't do discovery ASAP and find out what they intend to introduce you are going to get steam rolled at the trial.

I am going to ask one more time is this What County?  I have sued a collection agency in TX and WON.  I suggest you consult an attorney ASAP before you not only owe the $1300 but their attorney fees for this frivolous suit as well.

1 hour ago, BV80 said:

I don't know about TX courts, but in federal court, proof of a response is not required if the party responding can show it has procedures in place to adequately respond. 

TX courts will accept their letter(s) and documents as proof.

2 minutes ago, Bond Girl said:

But in JP court I can discredit the Defendant.  With their history of predatory practices, I don't think they will be able to prove to a jury they mailed a response when there's no evidence they did. 

OH BOY are you in over your head.  The rules in Justice Court are much more relaxed and I guarantee you that you will not be able to discredit this just based on your antics here.  What you call predatory they will call standard debt collection practice(s) and as long as they are not breaking the law (and reporting to the bureaus isn't) then they will prevail.

AGAIN:  Get a lawyer ASAP you are going to end up owing A LOT of money here very soon.

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1 hour ago, Bond Girl said:

They cannot simply call multiple lawsuits against them standard collection practices.  I will have in my possession case after case  lawsuits filed against them by CFPB and the Attorney General. 

 

Unfortunately, that is not evidence that the defendant violated the TX act in your situation.

1 hour ago, Bond Girl said:

In court the Defendant will have no chance.  However, it is my goal to reach a settlement outside of court. 

I hope you're right and wish you the best of luck.   Hopefully, you will reach a mutual agreement outside of court because because based upon what you've provided so far, we can't determine that you would be so lucky.   I hope you are successful.

I

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