Received Summons from PRA

[PRAasap]

Hello all - wish we were meeting under different circumstances! I received a summons from PRA - I'm not denying the debt, I owe it. Fell on some hard times and the Best Buy card was charged off. At that point I figured I'd just leave it on my credit report and deal with it for 7 years. Well until the other day...

I am hoping for advice on the best way to move forward with this. Obviously want to avoid the judgement, from what I have read PRA does not do PFD. I don't think I could get 12k by next month anyways (I have close to 10k in savings that I could use). I am willing to settle but want to do so in the best way that will minimize my financial and credit impacts. 

Please help! 

1. Who is the named plaintiff in the suit?

Portfolio Recovery Associates, LLC

2. What is the name of the law firm handling the suit? (should be listed at the top of the complaint.)

Jessica L.Reardon

Portfolio Recovery Associates, LLC

4600 South Syracuse  St Set 900

Denver CO 80237

3. How much are you being sued for?

$12,000

4. Who is the original creditor? (if not the Plaintiff)

Citibank (HSBC before them)

5. How do you know you are being sued? (You were served, right?)

Served

6. How were you served? (Mail, In person, Notice on door)

In person

7. Was the service legal as required by your state?

Yes

8. What was your correspondence (if any) with the people suing you before you think you were being sued?

Calls and letters which I chose to ignore

9. What state and county do you live in?

Colorado Jefferson County

10. When is the last time you paid on this account? (looking to establish if you are outside of the statute of limitations)

June 2016

11. When did you open the account (looking to establish what card agreement may be applicable)?

01/2008 when it was with HSBC/Cap One

12. What is the SOL on the debt? To find out:

6 years

13. What is the status of your case? Suit served? Motions filed? You can find this by a) calling the court or  looking it up online (many states have this information posted - when you find the online court site, search by case number or your name).

Served

14. Have you disputed the debt with the credit bureaus (both the original creditor and the collection agency?)

No

15. Did you request debt validation before the suit was filed? Note: if you haven't sent a debt validation request before being sued, it likely won't help create FDCPA violations, but could be useful to show the court that you dispute the debt ('account stated' vs. 'breach of contract').

No

16. How long do you have to respond to the suit? (This should be in your paperwork). If you don't respond to the lawsuit notice you will lose automatically. In 99% of the cases, they will require you to answer the summons, and each point they are claiming. We need to know what the "charges" are. Please post what they are claiming. Did you receive an interrogatory (questionnaire) regarding the lawsuit?

Respond before (or appear) 4/26.

17. What evidence did they send with the summons? An affidavit? Statements from the OC? Contract? List anything else they attached as exhibits.

Affidavit of sale of account from Citi to PRA

Bill of Sale and Assignment

Asset Schedule

Two Statements

 

[BackFromTheDebt]

I looked at some articles ca. 2016, and it appears the 2016 Citi card agreement has an arbitration agreement with AAA.

Not as good as JAMS, but probably better than court.

Read up on the AAA web site, and on this forum, how to file with AAA.

Read up on this web site how to write a MTC arbitration (Motion to Compel)

 

Why? 

This is a borderline case here.  It is not clear if PRA will spend the money it takes to arbitrate in AAA in order to collect a $12,000 debt.  They usually don't, but it is possible the amount is high enough to tempt them.  

If you get into arbitration, there are several possibilities:

1. PRA will walk away from this.

2. PRA will want to fight to the bitter end, in which case you are in the same boat as if you had stayed in court.

3. In between -- you will put them in a position where they will be willing to accept a better settlement than you could've possibly gotten in court.

 

If you get into court, these are the possibilities.  It appears they actually have the evidence, so it would be difficult to fight them on ownership of the debt.  

1.  You will lose summary judgment, and have a judgment against you for the entire amount.

2.  You can negotiate a settlement, but probably not as good a settlement.  

 

Look at this strategy.  Come back early and often with questions.  

[PRAasap]

Thanks Backfromthedebt - which card agreement applies? I believe the issuers went like this since 2008 HSBC > Cap One > Citi - would they have to prove the balance all the way back to the beginning?

I'll research AAA -

does it make sense to send them a letter to try and settle?

These answers will probably come up in my research but should I respond to the judgement now denying most everything? 

Sorry if my questions are premature but I'm terrified of this and I want to avoid a judgement at all costs. Ideal scenario is I could do a PFD but I know that's not happening lol. 

[Clydesmom]

32 minutes ago, PRAasap said:

which card agreement applies?

The one in effect when you defaulted.  For example:  you defaulted in 2016 and it was a Citi card then and the most current terms and conditions were from 2015 that would apply.

34 minutes ago, PRAasap said:

would they have to prove the balance all the way back to the beginning?

No.  Only the last 6 months before default.  

35 minutes ago, PRAasap said:

does it make sense to send them a letter to try and settle?

It can't hurt.  Settlement talks are not admissible in court.

 

[Pericles]

3 hours ago, PRAasap said:

10. When is the last time you paid on this account? (looking to establish if you are outside of the statute of limitations)

June 2016

This is almost exactly the time that Citibank removed JAMS from the arbitration agreements.  You should be able to find an agreement from the first quarter of 2016 that still contains JAMS.

 

40 minutes ago, PRAasap said:

does it make sense to send them a letter to try and settle?

Doing so could potentially save you all the time and energy of dealing with learning the Colorado rules of civil procedure, learning how to file a motion to compel and/or answer, learning all of the arbitration forum's rules and processes.

The problem is that you have minimal leverage at this point.  Since you are in a position to settle for a lump sum, you could send a settlement offer to Reardon (preferably by email if the address is available) and see how they respond.  Your initial offer should be lower than your maximum offer in order to leave room for a counteroffer from Reardon.

If Reardon's response to your initial offer (or their counteroffer) is unacceptable to you, then you could make another offer and with that offer also mention that you intend to move to compel arbitration of the court action if a settlement cannot be reached before your response to their complaint is due.

See then if their settlement offer improves.

If it doesn't then you need to do all of the learning previously mentioned if you choose to defend the court action and enforce the arbitration agreement.

If you are successful in moving the mater to arbitration, your leverage for a settlement should improve, but it may not for a claim of this size.

 

40 minutes ago, PRAasap said:

I'll research AAA

Also research the Colorado rules of civil procedure, and prior Colorado cases discussed on this forum (for example; 1, 2, 3).

[BackFromTheDebt]

If you can get an agreement from around the time of your default with JAMS, by all means file in JAMS.  That is a great way to chase off  JDB.

 

The 6 months Clydesmom referred to is not applicable to EVERY state, but MOST of them.  Also, SOME of the states where it is NOT applicable have exceptions for JDBs.

In other words, unless there is a Colorado law we don't know about, assume 6 months.  It wouldn't hurt to look up Colorado law just in case.  

[fisthardcheese]

The HSBC 2008 card agreement, I believe, had JAMS and as others said, the Citi agreement had JAMS early 2016.  I would check both of those and make sure they have a "survival clause" in the arbitration section.  If they do, then either one should be fine, but I would use the Citi agreement to avoid extra hassle in court over using the HSBC agreement.

JAMS should work to fight off PRA.

[PRAasap]

Thanks all I am going to start my battle today. First I’m going to try and find an email for the attorney if unsuccessful I’ll send a letter. 

My first attempt is going to be a lump sum payment of 35-40%and deletion from credit reports. I doubt it will be successful. 

Second attempt will be 50% and deletion. Do I say I’ll move to arbitration at this point?

lastly if my negotiations are unsuccessful at that point, I’ll respond to the summons denying all claims so they know I’m not giving in as easy and hopefully agree to a settlement offer closer to 50%

thoughts?

[BackFromTheDebt]

You could try, but I doubt they would agree to deletion.  That is extremely rare.  I even had a JDB reject 100% with deletion, a few months before SOL.  Instead, they got nothing.  I don't understand the logic, but that is how they work.  

As for the amount of settlement, I have no idea.  An MTC could get you to 0%, but again with no deletion.  

[PRAasap]

I was able to get my monies in order in the event they do want to settle in the near term. Here is the letter I am going to send to the attorney via CMRRR listed in the summons today, I pulled it off this site. Any concerns? This is my first offer, assuming they'll com back with something else...

AGREEMENT TO COMPROMISE DEBT

Portfolio Recovery Associates referred to hereafter as COLLECTION AGENCY and (Insert Your Name) referred to hereafter as CONSUMER, agree to resolve the matter of the alleged debt, originally held by Citibank, hereafter referred to hereafter as the CLIENT. CONSUMER hereby agrees to settle this alleged debt claimed by COLLECTION AGENCY on the following terms and conditions:

The COLLECTION AGENCY certifies that it is legally authorized to act in behalf of its CLIENT and that any agreement that the COLLECTION AGENCY makes on behalf of CLIENT is legally binding on the CLIENT.

The COLLECTION AGENCY and the CONSUMER agree that alleged debt is $12,xxx.While the CONSUMER feels that validity of the debt has not been proved by the COLLECTION AGENCY, the parties agree that the COLLECTION AGENCY shall accept the sum of $4,000as full payment on the debt. The acceptance of the payment will serve as a complete discharge of all monies due, and the COLLECTION AGENCY agrees to consider the debt paid in full and agrees to not take further action to collect on the alleged debt. The payment shall be made in the form of a cashier's check or money order.

Upon payment of the $4,000, the COLLECTION AGENCY agrees to remove any listing or information that the COLLECTION AGENCY may have placed on the CONSUMER'S credit report. The COLLECTION AGENCY agrees to never at any time in the future place any information on the CONSUMER'S credit report.

The CONSUMER feels that the negative information on CONSUMER's credit report is damaging and while the exact estimation of the damage is not currently known, the CONSUMER estimates it to be $10,000 (ten thousand dollars). Should the COLLECTION AGENCY fail to remove the listing or reinsert it at a later date, the COLLECTION AGENCY agrees to award liquidated damages of $10,000 to CONSUMER.

This compromise is expressly conditioned upon the payment being received by 5/1/18. If the CONSUMER fails to pay the compromised amount by 5/1/18, this contract will be immediately terminated.

The person signing this agreement, __________________________________, hereby declares that he/she is authorized to act as an agent of the COLLECTION AGENCY.

This Agreement shall be binding upon and inure to the benefit of the parties, their successors, and assignees.

Dated: _______________

Signature: ____________

Legal Representative of (Insert Collection Agency Name)

Signature: ____________

Print Your Name

[Goody_Ouchless]

That letter is a joke. They won't take 4K for a 12K debt, anything less than 12K and they won't consider it "paid in full," nor will they remove trade lines. Assuming they DID take 4K, your credit report would show something like "debt settled for less than full amount" and you would receive a 1099 for the 8K "forgiven," which would be taxed as income (although you can skate on the tax bill if you are insolvent at time debt was forgiven, or if your settlement agreement states never uses the term "settlement," and instead states that you were "buying relief" from a lawsuit.)

 

[PRAasap]

4 minutes ago, Goody_Ouchless said:

That letter is a joke. They won't take 4K for a 12K debt, anything less than 12K and they won't consider it "paid in full," nor will they remove trade lines. Assuming they DID take 4K, your credit report would show something like "debt settled for less than full amount" and you would receive a 1099 for the 8K "forgiven," which would be taxed as income (although you can skate on the tax bill if you are insolvent at time debt was forgiven, or if your settlement agreement states never uses the term "settlement," and instead states that you were "buying relief" from a lawsuit.)

ok I used the settlement template letter I found on this site, do you have a better suggestion? This is the first of a round of negotiations, I don't expect them to take 4k either. I'm just trying to avoid going all the way to court. Like I stated in my previous posts my thought was to start low and they would counter, this would go back and forth at which point I'd state I'd move forward with arbitration hoping they'd settle closer to 50%. 

Happy to take any help you can give!

[BV80]

8 minutes ago, PRAasap said:

I'm just trying to avoid going all the way to court.

If PRA has complied with your court's rules of civil procedure, you're already in court.

[fisthardcheese]

I have a better suggestion.  File a case against them in JAMS and when they are sent the bill, tell them you will settle for a mutual release of all liability.  That means you drop your arbitration case and they wipe out the debt.  A settlement agreement that "releases all liability" needs no extra laundry list like TL deletion, etc.  It is the proof that you are no liable and therefore can get the CRAs to remove the account if PRA does not.

[PRAasap]

2 minutes ago, BV80 said:

If PRA has complied with your court's rules of civil procedure, you're already in court.

Ok I misstated.. I am trying to resolve this by the reply to date on the summons. Otherwise, I'll respond to the summons denying all claims except name and residence to get more time to hopefully negotiate something or move to arbitration.

[fisthardcheese]

Just now, PRAasap said:

Ok I misstated.. I am trying to resolve this by the reply to date on the summons. Otherwise, I'll respond to the summons denying all claims except name and residence to get more time to hopefully negotiate something or move to arbitration.

Oh, you have been served already.  They won't even read this letter.  They won't settle for anything less than 100% now because they don't have to.  They can get a judgement and collect 150% from you over time.

[PRAasap]

2 minutes ago, fisthardcheese said:

I have a better suggestion.  File a case against them in JAMS and when they are sent the bill, tell them you will settle for a mutual release of all liability.  That means you drop your arbitration case and they wipe out the debt.  A settlement agreement that "releases all liability" needs no extra laundry list like TL deletion, etc.  It is the proof that you are no liable and therefore can get the CRAs to remove the account if PRA does not.

Thanks Fisthardcheese, I need to do some more digging on the cardholder agreement and whether it included JAMS or AAA. They have provided affidavit of sale and a couple card statements. This is a large debt, do you think it's one they'd consider paying for? someone earlier did mention it was borderline dollars wise.

I'm happy to take whatever approach you all suggest, I appreciate everyone's help, this forum is a wealth of knowledge. I didn't know about it, but frequent myfico. 

[PRAasap]

Just now, fisthardcheese said:

Oh, you have been served already.  They won't even read this letter.  They won't settle for anything less than 100% now because they don't have to.  They can get a judgement and collect 150% from you over time.

ok sounds like arbitration it is then... 

[fisthardcheese]

On 4/2/2018 at 5:52 AM, fisthardcheese said:

The HSBC 2008 card agreement, I believe, had JAMS and as others said, the Citi agreement had JAMS early 2016.  I would check both of those and make sure they have a "survival clause" in the arbitration section.  If they do, then either one should be fine, but I would use the Citi agreement to avoid extra hassle in court over using the HSBC agreement.

JAMS should work to fight off PRA.

 

[BV80]

1 minute ago, PRAasap said:

Ok I misstated.. I am trying to resolve this by the reply to date on the summons. Otherwise, I'll respond to the summons denying all claims except name and residence to get more time to hopefully negotiate something or move to arbitration.

I agree with @fisthardcheese.  Follow his instructions.

\

[PRAasap]

Thank you so much now that I know the approach I have to take I'll move forward with responding to the lawsuit/moving to arbitration.  I am reading up on the arbitration post now!

[PRAasap]

I was able to find the original cardholder agreement from when the card was sold from Cap1 to Citi - My first statement was 0913, I found a agreement on the CFPB site in the q3 2013 zip file. It has JAMS! Am I able to use this agreement ? Or will they use some mumbo jumbo that I didn't opt out of the change in terms to move to AAA?

[upcycleliving]

21 minutes ago, PRAasap said:

I was able to find the original cardholder agreement from when the card was sold from Cap1 to Citi - My first statement was 0913, I found a agreement on the CFPB site in the q3 2013 zip file. It has JAMS! Am I able to use this agreement ? Or will they use some mumbo jumbo that I didn't opt out of the change in terms to move to AAA?

You would need to find a 2nd quarter of 2016 agreement as that was when you made your last payment.

[fisthardcheese]

11 hours ago, upcycleliving said:

You would need to find a 2nd quarter of 2016 agreement as that was when you made your last payment.

No.  Last payment is completely irrelevant.  Technically, the correct agreement is the one in effect when you missed your first payment and the account went into default. 

That aside, you need to read the Arbitration Clause in the agreement and see if it says "this arbitration agreement survives any changes..." or similar.  If it does, then JAMS should be able to still be used.

[PRAasap]

So update - I been busy with work out of town haven't had a chance to update. Last Friday I went to the courthouse to file my answer, they couldn't find my case anywhere. Said to call back today and check, I called the clerk and they're still unable to find anything.

I am going to call again on Monday,  and appear on Thursday (the date on the summons). Not sure what I do at this point? Do I send the attorney a letter or call PRA? Do nothing?