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Being sued by Midland Funding in Minnesota

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I received a court summons in the mail today. It was for a credit card I had a few years ago through Synchrony Bank that ended up being charged off in November, 2016. Midland Funding LLC apparently bought the debt, and is now going to sue me for the $1,400 balance, plus court fees. The total amount they're asking for is $1520.

Honestly, I had forgotten about this debt after it got charged off. I would love to be able to just pay it off, but I just don't have the money right now, and wouldn't be able to come up with it before the court date. I don't even bring home $1,500 a month, because nearly half of my paycheck is automatically taken out for health insurance for my family. I can't make changes to my insurance elections until open enrollment for next year. On top of that my student loans just went into repayment, and I have a car payment. Most of my husband's income goes to our mortgage, insurance, and other bills. 

I've never been taken to court before, so I'm kind of shook up and don't know what to do. Do I need to get a lawyer for this? Is there anything I have to do before the court date (August 30). Is it possible my checks could end up being garnished for this? Is there any way of me possibly being able to get more time to pay this?

Any advice would be greatly appreciated.

 

The letter I got reads as follows:

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PLAINTIFF'S STATEMENT OF CLAIM

1. The Defendant(s) owe(s) Plantiff $1437.75, plus a filing fee of $78, plus an e-filing fee of $5.00 for a total of $1520.75 because:

The creditor issued a credit account to the Defendant(s). Defendant(s) made purchase and/or received cash advances on the charge account number xxxxxxxxxxXXXX. The last payment made on the account was received on March 25, 2016. The account was charged off by the original creditor on November 18, 2016 with a balance of $1437.75

Midland FUnding LLC owns this account and is successor in interest to Synchrony Bank (Ashley Furniture HomeStore), for this account.

Plantiff purchased the account on December 29, 2016, and is attempting to collect the debt. 

Defendant(s) is/are in default for failing to make payments on the charge account.

THIS COMMUNICATION IS FROM A DEBT COLLECTOR

2. The Defendant(s) has/have the following property that belongs to me ____, valued at $____, plus filing fees and costs of $______. For a total of $____. I want the Court to Order this property returned to me or make the Defendant(s) pay me money for the value of the property. 

3. I believe the person(s) I am suing is/are at least 18 years old and not in the military service. 

4. I understand that if I do not come on my hearing date, my case may be dismissed and I may have to pay the money to the Defendant(s) on any counterclaim that has been filed. 

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First off, understand that even though you received the summons and complaint in the mail, you have been served and the case has started according to MN law. You must send an answer to the plaintiff attorney within 20 days even though the case has not been started in court or you automatically lose.

What I would do in your case is find the Synchrony Card agreement where you are sure to find an iron clad arbitration agreement. Once you find that, you file your answer with the plaintiff denying all things that you can deny (obviously not name and address) and with that answer, you send them a motion to compel arbitration according to the card agreement. Others can help craft both the answer and the motion. Make sure you send those CMRRR and have a friend do the actual mailing and fill out an affidavit of mailing (can be obtained from the MN Judicial Department website). Once they get that, you they will probably try to contact you about discovery but tell them that you have a motion all ready to go to the judge and if they want to litigate this any further, they have to file with the courts so that your motion can be heard. Most likely at that point, the will back off and send you a dismissal w/o prejudice. If they file in the court, immediately file your answer and motion to compel. If they do not do anything for 1 year from yesterday, then the case is automatically dismissed with prejudice according to the new rules the MN legislature passed a few years ago to limit the abuses of the current system.

They might also contact you to negotiate a payment. First off, that is up to you to decide how far you are willing to go in regards to fighting this. If the offer is something you can handle and you want to take it, that is your business. If you do decided to take an offer to settle, get it in writing and pay it in one lump sum using a bank or cashiers check (or Money Order). Do not let them have access to your bank account. The other option would be to see it through but I doubt that Midland will go too far because it will cost them $400 just to get this into court because of their choice to go the civil court route and then the arbitration fees will be astronomical for them to collect $1500.

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Wait, looking at the claim, they might have filed this in conciliatory court. Check and make sure you have a court case number or not. If you do, then different rules apply. You still have to answer and you can move to get this into arbitration since Sychrony has not put in a small claims exception into their arbitration clause as of yet.

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2 hours ago, WhoCares1000 said:

Wait, looking at the claim, they might have filed this in conciliatory court. Check and make sure you have a court case number or not. If you do, then different rules apply. You still have to answer and you can move to get this into arbitration since Sychrony has not put in a small claims exception into their arbitration clause as of yet.

This was filed in conciliatory court. I don't have the letter on me right at the moment, but if I remember correctly there was a court case number. I'd have to double check once I get home to be certain. 

Do I have to just send a response to their lawyer, or do I also have to send something into the court? Should I be sending it via certified mail, or how can I prove they got my response once I send it in?

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1 hour ago, WhoCares1000 said:

If it is a small claims case, you will have to file with the court as well as serve the plaintiff attorney.

Would me mailing them the letter be considered serving them? Or does it require more than that?

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You will have to have a friend mail the letter because they have to be served by a disinterested party. You can go with the friend to the post office but they have to be the one to hand the letter to the postal worker and hand over the money for postage and the CMRRR. You then have to go to the courthouse to fill out and sign an affidavit stating service was done. The affidavit form can be obtained from the MN Judicial Department website (where you can also obtain the form for filing your answer).

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