Recommended Posts

Summary:  I'm being sued by debt collector, and I need guidance on Answer in response to Complaint by 5/2/2019.  Questions at the very bottom.  Thank you.

 

1. Who is the named plaintiff in the suit?

Discover Card

2. What is the name of the law firm handling the suit? (should be listed at the top of the complaint.)
M&J LLP asserting they are attorneys for Plaintiff Discover Bank

3. How much are you being sued for?
~$7K (I have several other similarly sized credit card debts I anticipate similar Complaints for)

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

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

Served a Summons & Complaint April 2019

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

7. Was the service legal as required by your state?
Yes, I think so.


8. What was your correspondence (if any) with the people suing you before you think you were being sued?
I previously wrote them sometime in 2016 with an offer-in-compromise of 10% of outstanding balance, and again with the same offer after receiving Summons in April 2019.  I have never received a response.  They called recently, and left a call-back message, but I have not returned the call.  I have since learned that I don't know if they are legitimately entitled to anything due to various Affirmative Defense reasons. 

9. What state and county do you live in?
El Paso County, Colorado

10. When is the last time you paid on this account? (looking to establish if you are outside of the statute of limitations)
Last Pay Date - Oct 2015

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

6 years

12. 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).

Summons/Complaint for Money Due - Dated 3/19/2019

Served Summons/Complaint - April 2019?  Not sure exactly.

Complaint Answer Due - 5/7/2019 (but I'll be out of state and so must file by EOB 5/2/2019)

 

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

No.  Debt was "Charged off as bad debt.  Profit and loss write-off” by Discover in April 2016 (per my credit report).

 

14. Did you request debt validation before the suit was filed? Note: if you haven't sent a debt validation request, don't bother doing this now - it's too late.

No.

 

15. 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?

I must respond to Complaint by 5/7/2019.

 

Complaint:  

 

“1.  Venue is proper as Defendant resides ...

2.  The amounts the Plaintiff claims from the Defendant are $xxxx which represent the liquidated balance of the Defendant’s credit car account owed by Plaintiff, less credits of $xx, plus court costs.

3.  The Plaintiff’s claim arises from the Defendant’s failure to pay the liquidated balance due on credit card account xxx as required by cardholder agreement.  The Plaintiff claims the right to recover from the Defendant under one or more of the following legal theories:  Breach of Contract, Liquidated Debt arising out of a Contract under C.R.S 5-3-304, or Unjust Enrichment.

4.  The Plaintiff request interest on any judgment entered on the Plaintiff’s claims in this case to accrue at the rate of 8% per annum compounded annually fro the date of the judgment, pursuant to C.R.S. 5-12-102.

5.  The Defendant is not a minor ...

6.  The Plaintiff does not demand a trial by jury.”

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

They sent:

  • a copy of the Complaint;
  • the last credit card statement before the account was closed;
  • a stock fine-print copy of the Cardmember Agreement (no signatures);
  • an ANSWER form;
  • their contact information & payment information.

I've since learned I need to file an Answer by 5/7/2019, with admit, deny, or lack of knowledge for each of their numbered allegations (but I'll be out of state and so must file by EOB 5/2/2019).  Here's my draft response:

 

I.  ANSWER

 

  1. In answer to paragraph 1, Defendant admits he resides at the stated address, but lacks knowledge to admit or deny the allegation of whether this is the proper venue, and therefore Defendant denies the allegations.
  2. In answer to paragraph 2, Defendant lacks knowledge to admit or deny the allegations, and therefore Defendant denies the allegations.
  3. In answer to paragraph 3, Defendant lacks knowledge to admit or deny the allegations, and therefore Defendant denies the allegations. 
  4. In answer to paragraph 4, Defendant lacks knowledge to admit or deny the allegations, and therefore Defendant denies the allegations.
  5. In answer to paragraph 5, Defendant admits the allegations.
  6. In answer to paragraph 6, Defendant lacks knowledge to admit or deny the allegations, and therefore Defendant denies the allegations.

 

II.  AFFIRMATIVE DEFENSES

 

  1. Plaintiff has failed to state a claim upon which relief may be granted.  Plaintiff’s claim demands monies for an alleged debt for which no proof of said debt, nor proof of ownership of said debt, has been verified and exhibited.
  2. Plaintiff has failed to trace in his statement of claim the derivation of his cause of action from his assignor so that the defendant may challenge the plaintiff’s claim that he is the present owner of the cause of action.
  3. Plaintiff has knowingly filed the claim without presenting any applicable original signed contract.
  4. Insufficient Specificity.  Plaintiff has failed to provide the dates on which individual transactions were made, the amounts therefore and the items purchased to be able to answer intelligently and determine what items Defendant can admit and what items he can contest.
  5. Failure of Consideration.  No exchange of money or goods occurred between the Plaintiff and the Defendant, therefore, defendant cites Failure of Consideration.
  6. Repudiation. Plaintiff is not named in any alleged signed agreement that is purported to have been entered into between Defendant and Plaintiff.
  7. Lack of Privity.  Defendant claims Lack of Privity as Defendant has never entered into any contractual or debtor/creditor arrangements with Plaintiff.
  8. Plaintiff's complaint violates the Statute of Frauds.  There is no contract or agreement in writing and signed by Defendant or by some other person authorized by Defendant and who was to answer for a debt.
  9. Scienti et volenti non fit injuria.  Plaintiff claims to have purchased the defaulted debt allegedly owned by the Defendant, causing Plaintiff's injury to its own self, therefore Plaintiff is barred from seeking relief for damages.
  10. Laches.  Plaintiff waited too long to file this lawsuit, making if difficult or impossible for Defendant to find witnesses or evidence or that evidence necessary to provide for Defendant's defense has been lost or destroyed. 

 

My questions:

1.  What am I missing?

2.  What have I added that doesn't apply?

3.  M&J is listed as attorney's for the plaintiff.  How is that different from a debt collector who bought the debt?

3.  What if anything should I say regarding a jury trial?

4.  The Cardmember Agreement provides for arbitration.  What if anything should I say about that?

5.  Other thoughts/advice?

Share this post


Link to post
Share on other sites
4 hours ago, RHE said:

Plaintiff has failed to state a claim upon which relief may be granted.  Plaintiff’s claim demands monies for an alleged debt for which no proof of said debt, nor proof of ownership of said debt, has been verified and exhibited.

You’re being sued by Discover Bank, the original creditor.  It owns the account.

 

4 hours ago, RHE said:

Plaintiff has failed to trace in his statement of claim the derivation of his cause of action from his assignor so that the defendant may challenge the plaintiff’s claim that he is the present owner of the cause of action.

Discover doesn’t have to prove it never sold the account.

 

4 hours ago, RHE said:

Plaintiff has knowingly filed the claim without presenting any applicable original signed contract.

Signed agreements are not required to prove a credit card debt.

 

4 hours ago, RHE said:

Insufficient Specificity.  Plaintiff has failed to provide the dates on which individual transactions were made, the amounts therefore and the items purchased to be able to answer intelligently and determine what items Defendant can admit and what items he can contest.

Does your state law or courts require the above?

 

4 hours ago, RHE said:

Failure of Consideration.  No exchange of money or goods occurred between the Plaintiff and the Defendant, therefore, defendant cites Failure of Consideration.

Did you make purchases and payments?  If so, that is “consideration” and there was no failure.  So this defense does not apply.

 

4 hours ago, RHE said:

Repudiation. Plaintiff is not named in any alleged signed agreement that is purported to have been entered into between Defendant and Plaintiff.

If you opened the account and used it, this defense does not apply.  

 

4 hours ago, RHE said:

Lack of Privity.  Defendant claims Lack of Privity as Defendant has never entered into any contractual or debtor/creditor arrangements with Plaintiff.

Same as the previous answer.

 

4 hours ago, RHE said:

Plaintiff's complaint violates the Statute of Frauds.  There is no contract or agreement in writing and signed by Defendant or by some other person authorized by Defendant and who was to answer for a debt.

Statutes of Frauds do not apply to credit card debts.  

 

4 hours ago, RHE said:

Laches.  Plaintiff waited too long to file this lawsuit, making if difficult or impossible for Defendant to find witnesses or evidence or that evidence necessary to provide for Defendant's defense has been lost or destroyed. 

Does not apply.

4 hours ago, RHE said:

M&J is listed as attorney's for the plaintiff.  How is that different from a debt collector who bought the debt?

M&J did not buy the account.  It is a law firm  representing Discover Bank.  Just as you would hire an attorney to represent you in court if you sued someone, Discover hired M&J to represent it in court  

Where did you find those defenses?

  • Thanks 1

Share this post


Link to post
Share on other sites

Does your state have a borrowing statute, and what state did Discovery receive the payment. Because, the state where the payments were received may have a shorter Statute of Limitations, which you can barrow if your state has a borrowing statute. 

  • Thanks 1

Share this post


Link to post
Share on other sites

You can look at borrowing statute, but it doesn't look good:

"“If the court determines that the limitation period of another state applicable under sections 13- 82-104 and 13-82-105 is substantially different from the limitation period of this state and has not afforded a fair opportunity to sue upon or imposes an unfair burden in defending against the claim, the limitation period of this state applies.”"

Looks like CO's Borrowing Statute is more about what happens if you go somewhere out of state and something happens. But, what do I know?

Otherwise you are pretty much doomed. Discover doesn't fool around and will get their money. Best to try to settle with out making them mad.

 

  • Sad 1

Share this post


Link to post
Share on other sites

Thank you all for these very helpful and informative responses and resources.

I want to avoid a default judgment, and hope to negotiate an offer in compromise.

Since none of the debt buyer Affirmative Defenses apply, what is important to include in my Answer as Affirmative Defense to the creditor?  What else do I need to know?

Share this post


Link to post
Share on other sites
20 hours ago, BV80 said:

Where did you find those defenses?

BV80:  From a variety of sources online.

Share this post


Link to post
Share on other sites
3 hours ago, RHE said:

Thank you all for these very helpful and informative responses and resources.

I want to avoid a default judgment, and hope to negotiate an offer in compromise.

Since none of the debt buyer Affirmative Defenses apply, what is important to include in my Answer as Affirmative Defense to the creditor?  What else do I need to know?

1.  Do the credit card statements show charges and payments made by you?  

2.  Does one show the last payment you made?

3.  Does the final balance on the statement match the amount for which you’re being sued?

You might want to avoid those other sources where you found the defenses.  

Share this post


Link to post
Share on other sites
4 hours ago, RHE said:

Since none of the debt buyer Affirmative Defenses apply, what is important to include in my Answer as Affirmative Defense to the creditor?  What else do I need to know?

There are only 2 defenses when the original creditor sues and neither of those apply to you.  The first is identity theft.  If the consumer never opened or used the account identity theft can be asserted as a defense.  The other is the statute of limitations.  Discover filed well within the SOL so that is not an option.

Absent either of those 2 circumstances you either settle or file BK you will not win.

4 hours ago, RHE said:

I want to avoid a default judgment, and hope to negotiate an offer in compromise.

They only get a default judgment if you don't file an answer and/or do not show up for court.  

On 4/30/2019 at 12:40 PM, RHE said:

I previously wrote them sometime in 2016 with an offer-in-compromise of 10% of outstanding balance

I am not surprised they ignored this offer.  It is unrealistic in terms of the amount you owe.  The best settlement numbers I have seen with Discover is 60% of the amount owed.

Settling is about leverage and right now you really have none.  They can get a judgment in court that provides for their costs and post judgment interest.  While you may not be able to pay now they are willing to take a chance that down the road they can levy bank accounts and garnish wages to collect a lot more.

Share this post


Link to post
Share on other sites
On 4/30/2019 at 5:12 PM, Robby8900 said:

Does your state have a borrowing statute, and what state did Discovery receive the payment. Because, the state where the payments were received may have a shorter Statute of Limitations, which you can barrow if your state has a borrowing statute. 

Discover uses Delaware law, where the SOL is 3 years.  But the CO borrowing statute cited by Goody is strange, not sure how to interpret that one.

Share this post


Link to post
Share on other sites
1 hour ago, nobk4me said:

Discover uses Delaware law, where the SOL is 3 years.  But the CO borrowing statute cited by Goody is strange, not sure how to interpret that one.

Colorado is not going to allow Delaware shorter SOL to keep Discover from suing.  I interpret that borrowing statute to state that if another state has an SOL substantially different the prohibits someone from suing or defending in CO then the CO SOL applies.  They want their residents to have their day in court.  The OP could try an SOL defense but I doubt it would work.  The other risk in doing so is pissing off Discover where they refuse to settle.

Share this post


Link to post
Share on other sites
1 hour ago, Clydesmom said:

Colorado is not going to allow Delaware shorter SOL to keep Discover from suing.  I interpret that borrowing statute to state that if another state has an SOL substantially different the prohibits someone from suing or defending in CO then the CO SOL applies.  They want their residents to have their day in court.  The OP could try an SOL defense but I doubt it would work.  The other risk in doing so is pissing off Discover where they refuse to settle.

Discover's Cardmember Agreement states:  "This agreement is governed by applicable federal law and by Delaware law.  However, in the event you default and we file a lawsuit to recover funds loaned to you, the statute of limitations of the state where the lawsuit is filed will apply without regard to that state's conflicts of laws principles or its 'borrowing statute.'"

 

Does this term of the CA take precedence over SOL laws?

 

Share this post


Link to post
Share on other sites
13 minutes ago, RHE said:
 

Discover's Cardmember Agreement states:  "This agreement is governed by applicable federal law and by Delaware law.  However, in the event you default and we file a lawsuit to recover funds loaned to you, the statute of limitations of the state where the lawsuit is filed will apply without regard to that state's conflicts of laws principles or its 'borrowing statute.'"

 

Does this term of the CA take precedence over SOL laws?

 

 CO Rev Stat § 13-80-110 (2016):  "If a cause of action arises in another state or territory or in a foreign country and, by the laws thereof, an action thereon cannot be maintained in that state, territory, or foreign country by reason of lapse of time, the cause of action shall not be maintained in this state."
 
I'm no lawyer, but I'm inclined to interpret this to mean that it doesn't matter what the Cardmember Agreement says, it cannot override the law, and that the shorter SOL of the states involved is what applies.  Thoughts?

Share this post


Link to post
Share on other sites
24 minutes ago, RHE said:
 CO Rev Stat § 13-80-110 (2016):  "If a cause of action arises in another state or territory or in a foreign country and, by the laws thereof, an action thereon cannot be maintained in that state, territory, or foreign country by reason of lapse of time, the cause of action shall not be maintained in this state."
 
I'm no lawyer, but I'm inclined to interpret this to mean that it doesn't matter what the Cardmember Agreement says, it cannot override the law, and that the shorter SOL of the states involved is what applies.  Thoughts?

That means the cause of action must have arisen in DE.   You’d have to show that the contract was breached in DE.  In the event you could show that, you’d have to show that it takes precedence over the the language in the agreement stating “however, in the event you default and we file a lawsuit to recover funds loaned to you, the statute of limitations of the state where the lawsuit is filed will apply without regard to that state's conflicts of laws principles or its 'borrowing statute.’”

Share this post


Link to post
Share on other sites
25 minutes ago, BV80 said:

That means the cause of action must have arisen in DE.   You’d have to show that the contract was breached in DE.  In the event you could show that, you’d have to show that it takes precedence over the the language in the agreement stating “however, in the event you default and we file a lawsuit to recover funds loaned to you, the statute of limitations of the state where the lawsuit is filed will apply without regard to that state's conflicts of laws principles or its 'borrowing statute.’”

Agreed, precedence of contract vs "borrowing laws" & "conflicts of laws" appears to be the question.  Based on a very novice, superficial review of case law, I suspect the latter wins.

Question:  Can one amend one's filed Answer (i.e., file a modifed answer) the day after filing the Answer in Colorado?

Share this post


Link to post
Share on other sites
1 hour ago, RHE said:

Does this term of the CA take precedence over SOL laws?

Yes.  That is exactly what it does under contract law.

Share this post


Link to post
Share on other sites

I found a case in Oregon that covered similar ground. In that one they seemed to argue that for DE law to take precedence, Discover would have to wait until debtors moved to DE in order to collect, which is clearly goofy, so Oregon's SOL statutes were used.

Share this post


Link to post
Share on other sites
3 minutes ago, Goody_Ouchless said:

I found a case in Oregon that covered similar ground. In that one they seemed to argue that for DE law to take precedence, Discover would have to wait until debtors moved to DE in order to collect, which is clearly goofy, so Oregon's SOL statutes were used.

I remember that case.  The court ruled that because of DE’s tolling statute which provided that if a party was out of state, the SOL was tolled meant that the SOL could be tolled forever as long as a defendant was not in DE.  Therefore, OR’s 6-year SOL was actually shorter than DE’s tolled SOL.  

Share this post


Link to post
Share on other sites

One thing that I think has been over looked in all of these discussions is WHY Deleware law is listed in the card agreements for many creditors.  

Just as Texas is one of the most debtor/consumer friendly states based on their laws for residents Delaware is the most corporation friendly state for establishing a new business.  It is the "go to" state for internet based commerce businesses seeking to establish their incorporation.  MANY companies incorporate out of Delaware because of the ease of doing so and relatively low cost.  It is no surprise that creditors chose that state for the same reasons not for the SOL on suits.

Share this post


Link to post
Share on other sites
2 hours ago, Clydesmom said:

One thing that I think has been over looked in all of these discussions is WHY Deleware law is listed in the card agreements for many creditors.  

Just as Texas is one of the most debtor/consumer friendly states based on their laws for residents Delaware is the most corporation friendly state for establishing a new business.  It is the "go to" state for internet based commerce businesses seeking to establish their incorporation.  MANY companies incorporate out of Delaware because of the ease of doing so and relatively low cost.  It is no surprise that creditors chose that state for the same reasons not for the SOL on suits.

It is an interesting question as to what extent a company can, after availing themselves of the business & legal conveniences of Delaware law, then opt out of selected laws such as the 3-year SOL through a cardmember agreement.

Share this post


Link to post
Share on other sites

Does Discover still have arbitration in its agreement?  That is another option.  I know, people will claim Discover is extremely aggressive and will follow you into arb.

But, they are not aggressive in all cases.  I can attest to this from personal experience.  Discover did not sue me and did not use any collection agencies, that I know of.  For a debt over $6K.

Share this post


Link to post
Share on other sites

So, an update on this situation, and a request for more input ...

M&J is the attorney for two of my CC debts, the first is the content of this thread.  On that one, they filed a Complaint, I filed an Answer in time 3 weeks ago, and I haven't received or heard more about yet.

On the second CC debt represented by M&J, unbeknownst to me, the creditor has received a default judgement of $5600+ (I was not served).  I learned about it from my employer notifying me of a very hefty garnishment of my check in an amount that will take me under ($1300/paycheck).

Now, M&J's first-line debt negotiator says he can no longer speak to me, saying I have to talk to what appears to be one of their contract attorneys, who I've been unable to reach today.

I am hoping for agreement on an offer-in-compromise, and an agreement to make some sustainable level of payments on that OIC, which cannot be nearly as much as they want ($300/month for one of them).  I had a financially devastating set of financial losses, and have possibly 3-4 more of these likely lining up to come at me, and beginning to think about bankruptcy just to be able to pay the rent.

Just looking for advice before I speak with their attorney ... 

Share this post


Link to post
Share on other sites
54 minutes ago, RHE said:

Just looking for advice before I speak with their attorney ... 

Get a couple of free bankruptcy consults ASAP like tomorrow. Most will do them same day.  Filing would stop the garnishments, bank levy etc.  With everything going on starting over may be your best option.

  • Like 1

Share this post


Link to post
Share on other sites
10 hours ago, Clydesmom said:

Get a couple of free bankruptcy consults ASAP like tomorrow. Most will do them same day.  Filing would stop the garnishments, bank levy etc.  With everything going on starting over may be your best option.

This is something important. 

On this board, and perhaps even more so on the now defunct other board, people sometimes get obsessed with fighting the creditors. 

The goal is not necessarily to beat the creditors. 

The goal is to do the best you can for you and your family. 

For some people BK is a horrible option.  

For others it is a godsend. 

In my particular case BK was a horrible option and my troubles came at a time when fighting the creditors was the easiest it ever has been.  Easier than 2019 as well.  

For others, BK is a fantastic option to get a fresh start.  

Share this post


Link to post
Share on other sites
17 hours ago, RHE said:

On the second CC debt represented by M&J, unbeknownst to me, the creditor has received a default judgement of $5600+ (I was not served).  I learned about it from my employer notifying me of a very hefty garnishment of my check in an amount that will take me under ($1300/paycheck)

If you were not served, you should be able to get that judgment vacated for lack of service.  I would suggest consulting with a consumer attorney.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.