Portfolio Recovery Associates transferred to litigation department

[TxCitiboy]

I live in Texas, and I am receiving mail from PRA regarding a balance they now own from Dell Financial Services (webbank) in the amount of $2430.22. The letter I just received says my account has been transferred to the litigation department,  but no attorney has personally reviewed...

After researching this site,  I found the sections regarding arbitration.  The original credit agreement for the dell preferred account does contain an arbitration clause.  

No suit has been filed,  I've not been served, it's just a letter right now. I've never made contact,  answered phone calls,  or responded to mail received.  

My understanding is that arbitration will cost them too much to be worth pursuing, given the amount of the debt. My question is what do I need to do or not do as I go forward?

[Harry Seaward]

16 hours ago, TxCitiboy said:

My question is what do I need to do or not do as I go forward?

 Nothing. Just wait and see if they sue. If they do, come back at them with a motion to compel arbitration and watch them run for the hills. 

[BackFromTheDebt]

46 minutes ago, Harry Seaward said:

 Nothing. Just wait and see if they sue. If they do, come back at them with a motion to compel arbitration and watch them run for the hills. 

That may or may not be a good idea.

Are you within 30 days of the first mail you received from them?  If so, send a DV letter if you haven't already.  Sometimes this makes them go away, usually not.

Also, look at the arbitration agreement carefully.  Does it have an exemption for small claims?  If not, you can wait.  If it does, you need to file in arbitration BEFORE they file in court.  

There is also the situation where you might not want to have a court case against you on file.  For example, I briefly worked in banking.  My finances were gone over with a fine-tooth comb.  Any case that made it to court was a MUCH bigger issue than cases that went to arbitration but NOT court.  

There are also a few judges in small claims court who have NO idea what they are doing, and will refuse to allow your MTC.  

 

There is the case to be made for preemptive arbitration -- file before they file in court.  If any of these situations seems likely, then I would suggest filing in arbitration BEFORE they file in court.   It is already in their litigation department.  You may or may not get a warning from an actual attorney before they file.  

[Harry Seaward]

1 hour ago, BackFromTheDebt said:

There is the case to be made for preemptive arbitration

There really isn't. A preemptive demand for arbitration won't stop them from suing. Arguably there is an FDCPA violation if a consumer were to pay the arb fees and actively pursue a case, but if the goal is to prevent a lawsuit from ever appearing in your background, this ain't the way to make it happen. Fact is you cannot stop someone from suing another someone. 

[Pericles]

3 hours ago, BackFromTheDebt said:

Also, look at the arbitration agreement carefully.  Does it have an exemption for small claims?  If not, you can wait.  If it does, you need to file in arbitration BEFORE they file in court.  

That seems right.  At least one recent version of The Dell WebBank agreement has only a unilateral small claims carve out (see this post):

Quote

We agree not to invoke our right to arbitrate any individual claim you bring in small claims court or an equivalent court so long as the Claim is pending only in that court.

So, OP should be able to move to compel arbitration after a suit is filed in Texas.  OP should find the correct applicable agreement to verify.

[TxCitiboy]

3 hours ago, BackFromTheDebt said:

That may or may not be a good 

Also, look at the arbitration agreement carefully.  Does it have an exemption for small claims? 

Here's the only part of the agreement that mentioned small claims: 

We agree not to invoke our right to arbitrate any individual 
Claim you bring in small claims court or an equivalent court so long as the Claim is pending 
only in that court. It is the intent of the parties to require Claims to be submitted to 
arbitration on an individual basis only

 

I think this means they won't invoke arbitration if I bring a claim into small claims. Is that correct? 

 

So it sounds like I'll just wait, and if I get sued then I'll file an MTC?

[Harry Seaward]

50 minutes ago, TxCitiboy said:

I think this means they won't invoke arbitration if I bring a claim into small claims. Is that correct?

 Yes. JDBs can't sue in Texas Small Claims Court, so even if the agreement had the otherwise 'deal breaker' small claims exemption, it wouldn't apply to any lawsuit in Texas anyway. 

[TxCitiboy]

If I do have to answer a suit, I've read here the best thing to do is file an answer AND an MTC that way the case is dismissed with prejudice. Is that correct? What should my answer and/or MTC contain? I knowI'll need specifics from the actual suit, but what generalities will I need to include?

[Pericles]

59 minutes ago, Harry Seaward said:

 Yes. JDBs can't sue in Texas Small Claims Court, so even if the agreement had the otherwise 'deal breaker' small claims exemption, it wouldn't apply to any lawsuit in Texas anyway. 

That's my opinion too, for the reasons previously stated here.  But I wasn't able to find any precedent, especially since the renaming and/or reconfiguration of the lower Texas court a few years ago.

The Dell/WebBank language at issue here has a unilateral carve out.  But suppose it had a bilateral carve out - the language also includes an equivalent court as a disjunctive.

I'm not sure it would be a slam dunk win in TX for an agreement with a bilateral carve out and equivalence language even though the argument is strong.

[BackFromTheDebt]

On 4/13/2018 at 1:51 PM, Harry Seaward said:

There really isn't. A preemptive demand for arbitration won't stop them from suing. Arguably there is an FDCPA violation if a consumer were to pay the arb fees and actively pursue a case, but if the goal is to prevent a lawsuit from ever appearing in your background, this ain't the way to make it happen. Fact is you cannot stop someone from suing another someone. 

By preemptive arbitration, I meant filing a case in arbitration before the suit.  NOT a preemptive demand for arbitration.  

True, you can't stop someone from suing.  Preemptive arbitration greatly reduces the chances of being sued.  I was only sued once after starting a case in JAMS, and that was a mistake on the part of the law firm.  They dismissed the case as soon as I pointed out their error, and that greatly increased my negotiating position.  

[fisthardcheese]

17 hours ago, BackFromTheDebt said:

By preemptive arbitration, I meant filing a case in arbitration before the suit.  NOT a preemptive demand for arbitration.  

True, you can't stop someone from suing.  Preemptive arbitration greatly reduces the chances of being sued.  I was only sued once after starting a case in JAMS, and that was a mistake on the part of the law firm.  They dismissed the case as soon as I pointed out their error, and that greatly increased my negotiating position.  

If I knew then what I know now, when I was being sued by JDBs, I would have filed preemptive arbitration each time I got an attorney letter on an account with a free JAMS (or AAA) in the card agreement.

[TxCitiboy]

@texasrocker. What do you think about arbitration? I keep seeing you prefer litigation and discovery, but is arbitration a valid way to continue? I received a second notice from PRA, but have not been sued...yet. I believe by the time I got the first letter and came here 15 days had passed making a debt validation too late to submit. I am preparing answers to fill out with final information if I'm actually served, and I've found your general letter of denial. Is there a way (is it wise) to include a motion to compel arbitration with the answer? Or is that something I should prepare as a plan B? It has been advised to preemptively file a case with JAMS, is that effective? With what you know of PRA, Texas, and the law, is it better to rely on the cost of arbitration to gain dismissal, or is it better to work through extensive discovery and violations of debt collection practice-of which I'm not sure there has been any, to gain dismissal? I'm at a loss, and don't want to get taken for a ride. 

[Harry Seaward]

A granted MTC is 100% effective against a JDB. Court isn't. Even in Texas. 

The only real hurdle you could possibly have with arb is getting the MTC granted. 80% of the time it's a non-event with no hearing. 19% of the time there is a hearing before the court grants the motion. 1% of the time judges get their panties in a bunch and don't want to let go of a case. In the later, you can appeal. 

[Clydesmom]

15 minutes ago, Harry Seaward said:

A granted MTC is 100% effective against a JDB. Court isn't. Even in Texas. 

The only real hurdle you could possibly have with arb is getting the MTC granted. 80% of the time it's a non-event with no hearing. 19% of the time there is a hearing before the court grants the motion. 1% of the time judges get their panties in a bunch and don't want to let go of a case. In the later, you can appeal. 

Getting a MTC granted in Texas is not as easy as it used to be.  They developed their own mediation services 2 years ago.  It costs $1000 split between both parties.  It was done to lighten the Justice Court docket, provide a less daunting venue than court to average citizens, and cash in on the mediation money.  Heavy emphasis on #3.  There are quite a few Justices SHOVING litigants to the court ordered mediation at great expense.

[Clydesmom]

8 hours ago, TxCitiboy said:

I believe by the time I got the first letter and came here 15 days had passed making a debt validation too late to submit.

Not in Texas.  Texas is debtor friendly and as long as you invoked Texas Finance Code 392 in your DV letter they are required to respond or cease collections until they do.

8 hours ago, TxCitiboy said:

Is there a way (is it wise) to include a motion to compel arbitration with the answer?

It is recommended that you use arbitration per the agreement belonging to the account alleged in the complaint as an affirmative defense.

8 hours ago, TxCitiboy said:

It has been advised to preemptively file a case with JAMS, is that effective?

There is no evidence that pre-emptively filing stops them from suing.

8 hours ago, TxCitiboy said:

With what you know of PRA, Texas, and the law, is it better to rely on the cost of arbitration to gain dismissal, or is it better to work through extensive discovery and violations of debt collection practice-of which I'm not sure there has been any, to gain dismissal?

Despite the fact that @texasrocker uses a five year old outdated quote of something I said I DO NOT endorse his methods anymore.  He has led several people straight to judgments with his outdated methods.  They USED TO work.  Not so much anymore.  Follow it at your own peril.  At least get a consult with a consumer attorney (they do the initial one for free) before you embark on those outdated discovery questions.  The other problem is Texas requires permission from the Justice Court to do discovery. There have been a few cases where the Judge denied discovery.  Then what do you do?  Sit and wait for the judgment?

[Harry Seaward]

2 minutes ago, Clydesmom said:

There have been a few cases where the Judge denied discovery.  Then what do you do?  Sit and wait for the judgment?

That's about it because by then the window of opportunity for arbitration has closed. 

[texasrocker]

Nor would I endorse much that @clydeshypocrite says either...  Once again I have not "led several people straight to judgments."  Just over a year ago there was a three or four month period where three defendants lost their cases in JP courts because the judges in those three courts ruled that the new Texas JP court rules (which were enacted three years earlier) dictate that none of the original rules applied to them.  Until someone appeals to a higher court there is no precedent set to argue for or against such analogies.

These three losses had absolutely nothing to do with the discovery I provided being outdated or anything to do with the discovery at all.  Prior to and since then there have been exactly zero defendants who have reported a loss after using it.  It is still alive and well leaving JDB attorneys scratching their heads knowing that answering it will result in nothing less than shooting themselves in the foot.   I always inform anyone about those three losses who has asked for my assistance and make certain that if they are being sued in a JP court they must petition the court to begin discovery.

Claiming that utilizing my discovery will no longer work after a bump in the road that had nothing to do with it would be like someone using the following statement to claim that arbitration is outdated and will never again work even though the vast majority of cases wherein it was implemented before and after that have apparently worked great- 

On 2/9/2018 at 6:07 PM, Harry Seaward said:

Quote

The problem I see with arbitration is that we are currently monitoring a case in which Midland seems to be going right along on the arbitration party bus. The Credit One arb agreement is not very consumer friendly in terms of fees, so there's a good chance you could get stuck with a bunch of arbitration fees that you wouldn't have if the case stays in court.

 

 

[Harry Seaward]

On 5/4/2018 at 5:34 AM, texasrocker said:

The problem I see with arbitration is that we are currently monitoring a case in which Midland seems to be going right along on the arbitration party bus. The Credit One arb agreement is not very consumer friendly in terms of fees, so there's a good chance you could get stuck with a bunch of arbitration fees that you wouldn't have if the case stays in court.

Midland backed down. It seems their attorney didn't understand the actual costs during the time they appeared to be going along with arbitration. Once it became clear they would have to pay $5,000 to collect a $1,500 debt they paid $100 for, they dismissed and walked away. So as I said before, a granted MTC has thus far been 100% effective against JDBs. 

[JustAGuyInDebt]

I am banking on this!

[Justmyluck724]

I know this is an older post but I’m dealing with the same scenario. Just received a letter from Portfolio saying my account with a $1800 balance has been transferred to their litigation department. It does state that no lawyer has yet reviewed the file. Was curious if they ever did sue you for your account? I’m only 4 months away from the SOL and don’t know what to do..

 

[fisthardcheese]

2 hours ago, Justmyluck724 said:

I know this is an older post but I’m dealing with the same scenario. Just received a letter from Portfolio saying my account with a $1800 balance has been transferred to their litigation department. It does state that no lawyer has yet reviewed the file. Was curious if they ever did sue you for your account? I’m only 4 months away from the SOL and don’t know what to do..

 

At this point you only have 2 options.  Do nothing and wait to see if they sue you, or send in a dispute letter (or "DV"/validation letter) within 30 days from the day you received their letter.

[Beautyaries]

I received a letter in the mail about 3 weeks ago saying i was being sued about a walmart credit card that now costs 1044.00. Ive already made 2 payments on the debt but i wanna find out will i still have to appear in court seeing that ive already called and made an arrangement with them?