Racinghart03

DV Sent back by Collections Attorney for Cavalry Portfolio..What Next?

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So amidst the pandemic in NJ I received a letter from a NJ attorney stating they were legally representing Cavalry Portfolio for a debt a little over 5 years ago. I sent a request for verification and they sent back a card agreement, bill of sale (from OC to Cavalry) and a letter stating the demand of payment. I read the agreement and I am able to choose either AAA of JAMS for an arbitration. So here are the questions.

1. Debt is almost at the SOL. The last payment I made before I was just about homeless due my divorce was May of 2015. Am I correct in understanding the debt will become Time Barred at six years from that time? That is NJs SOL on this type of account.  And once that happens, the JDB attorney can still sue but will be harder to collect yes?

2. I am comfortable proceeding with JAMS but there is a clause stating whoever initiates the filing is responsible for the fee. Another member had great luck trying to get the JDBs attorney to pay the fee, to which they never did but I need to make this thing as steel as possible. It would not be good to have this thing miss because I tried to make them pay when the agreement says I have to pay. 

3.The attorney did send the DV CMRR. Letter was dated April 24th,2020. It was mailed April 28th, 2020. I only have 30 days to ask for more information, accept or deny the validity of the debt. Should I send a SECOND notice as they would have no way of knowing if I got the letter or not? I only have a few more days to figure this out. I have spent the past few weeks scouring the internet for information. 

4. NJ senate currently is working on a bill s2330. This basically stops debt collectors from doing much of anything until the pandemic is over. It is still in the senate under revision. I feel it could be a little while before it is passed. Not sure if it will give the collectors any extensions on the SOL as of yet. I did not see anything in there. Will this come into play? I feel the JDB took full advantage of the situation and forced me to break the stay at home order to mail the DV request. Law firms were not deemed essential in NJ and noted operating non-essential business was a direct violation of the governors order. I had to go out to the post office in the height of a pandemic, in a state that had the second highest infection rate in the country to deal with this debt that could have been addressed at any time seeings as they assumed the debt a year ago. Would this hold any water arbitration? 

5. Seeing as the debt is within the realm of NJs small claims court, Fisthardcheese has noted that I should get this going BEFORE I get sued. OCs agreement basically says once it is in small claims court, I am beat. 

6. After I initialize the arbitration, am I still able to negotiate a payoff after if the need arises? 

Any help would be greatly appreciated. 

 

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There is still a lot of information we don't have.  

Who is the OC on this?

You implied there is a small claims exemption for arbitration.  Some OCs do have this exemption.

Where is the OC located?  What is the choice of law for the arbitration agreement? 

This is important.  I was able to beat a debt because it was a few months before the SOL in Wisconsin (my state) but the debt had passed the SOL in Delaware, which was the headquarters for the OC.  The arbitration agreement said Delaware law would apply in arbitration.  

So. what does your agreement say?

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First off, Thank you @BackFromTheDebt

Who is the OC on this?: Citi

You implied there is a small claims exemption for arbitration.  Some OCs do have this exemption: Yes, the CITI agreement states that "claims filed in a small claims court are not subject to arbitration, so long as the matter remains in such court and advances only an individual (non-class, non-representetive) claim." 

This is important.  I was able to beat a debt because it was a few months before the SOL in Wisconsin (my state) but the debt had passed the SOL in Delaware, which was the headquarters for the OC.  The arbitration agreement said Delaware law would apply in arbitration.: Governing law verbiage states that the Law of South Dakota governs the terms and enforcement of this agreement. Their SOL is also six years. 

And thank you again.

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So after doing more research it seems that the law firm has verified the debt.  I contest the amount as I would need to see statements from before the time I was no longer able to pay (ex wife may have been using the account but I would need to see the charges from over 5 years ago so its probably a moot point) I feel I my only option is to arbitrate. My request for DV did not SPECIFICALLY say I disputed the debt, only that I am requesting verification, so am I already limping? The law office did respond with the info listed in my initial post. So unless anyone sees otherwise, do I try to settle now, which would be nearly impossible with the current economic situation, file arb with JAMS (I can swing the 250 filing fee) or wait until they try and sue me and file a MTC at that point? Any help from the some of the big heads I have seen on here would be really appreciated. One last thing to question.... Jams is now doing virtual hearings. I also noted that the NJ small claims court has a maximum amount of 3000.00. Unfortunately or fortunately my debt is much more than that. From what I can see, the lawyer would need to file suit in the Special Civil Part of the courts. Does this knock out the small claims clause that prevents arb in my CITI agreement?   Thanks all.  @Clydesmom

@Harry Seaward @fisthardcheese

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I do not know NJ law, but if this debt is above the amount for small claims, then the small claims exemption would not apply.

Since this is an OC, they will very likely follow into arbitration.  The point of arbitration is to use the $$$$ pressure of JAMS to attempt to get a better settlement.

In general, you can get a better settlement BEFORE they sue than you can AFTER they sue. However, you say settlement is impossible right now.  

I don't know what is going on with the NJ courts.  Many courts are simply not hearing civil cases these days.  It would be difficult for them to file, and difficult for them to pursue a case after filing.  That can buy you some time to get a settlement which might not be as good as what you can get now.

Since this is not small claims, you probably don't need to file a preemptive arbitration.  You can wait until you are served, and then file a MTC.  It might take a number of months for an MTC to be heard.  Then you file in JAMS, which gives you a little leverage, especially in between the time you file and they pay.  

You will have to work out your game plan at some point.  This is not to say your game plan can't change.  When I defaulted on a lot of debts, my game plan changed quite a bit during the process. But put together some sort of game plan.  They will PROBABLY pursue this case.  I was able to beat Citi in arbitration because I had some genuine FDCPA violations against the law firm.  

There is one tactic which MIGHT work.  WARNING: There is no case law to support this, but I had some success with it a little over a decade ago, and this was part of how I got a fantastic settlement with Citi:  

Reply to the law firm, and demand they file any cases against you in arbitration.  They will probably insist you file against yourself, or else they will sue.  Demand again that they file their own case against you in arbitration.  When they finally sue, file an MTC.  Then, when you file in JAMS, file a claim against them because (a) they threatened to sue after your election of arbitration and (b) they actually sued.  That may or may not work these days, but in olden times I got quite a bit of success with that tactic, depending on the law firm.  

 

Note that in my case, it was a lot more effective because they messed up and filed in court AFTER I had already filed in JAMS.  Oops.  I have gotten some success with this as a tactic, but only when there were other factors as well.  So this tactic may or may not help you get a better settlement you may or may not be able to afford anyway.  

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22 minutes ago, BackFromTheDebt said:

I do not know NJ law, but if this debt is above the amount for small claims, then the small claims exemption would not apply.

Since this is an OC, they will very likely follow into arbitration.  The point of arbitration is to use the $$$$ pressure of JAMS to attempt to get a better settlement.

In general, you can get a better settlement BEFORE they sue than you can AFTER they sue. However, you say settlement is impossible right now.  

I don't know what is going on with the NJ courts.  Many courts are simply not hearing civil cases these days.  It would be difficult for them to file, and difficult for them to pursue a case after filing.  That can buy you some time to get a settlement which might not be as good as what you can get now.

Since this is not small claims, you probably don't need to file a preemptive arbitration.  You can wait until you are served, and then file a MTC.  It might take a number of months for an MTC to be heard.  Then you file in JAMS, which gives you a little leverage, especially in between the time you file and they pay.  

You will have to work out your game plan at some point.  This is not to say your game plan can't change.  When I defaulted on a lot of debts, my game plan changed quite a bit during the process. But put together some sort of game plan.  They will PROBABLY pursue this case.  I was able to beat Citi in arbitration because I had some genuine FDCPA violations against the law firm.  

There is one tactic which MIGHT work.  WARNING: There is no case law to support this, but I had some success with it a little over a decade ago, and this was part of how I got a fantastic settlement with Citi:  

Reply to the law firm, and demand they file any cases against you in arbitration.  They will probably insist you file against yourself, or else they will sue.  Demand again that they file their own case against you in arbitration.  When they finally sue, file an MTC.  Then, when you file in JAMS, file a claim against them because (a) they threatened to sue after your election of arbitration and (b) they actually sued.  That may or may not work these days, but in olden times I got quite a bit of success with that tactic, depending on the law firm.  

 

Note that in my case, it was a lot more effective because they messed up and filed in court AFTER I had already filed in JAMS.  Oops.  I have gotten some success with this as a tactic, but only when there were other factors as well.  So this tactic may or may not help you get a better settlement you may or may not be able to afford anyway.  

My debt was sold by CITI to Cavalry Portfolio Services. The attorney sent me the bill of sale. So am I arbing with the OC or the JDB? I am watching the NJ bill which has changed in number but is basically the same in context. If it passes collectors have their hands tied for a while. When my divorce went down my credit went to hell. I remember seeing a 545. Over the years and WITH this derog on my report I am back up around 740. If this was pre-pandemic I would probably have been able to swing a payoff. Over the past few months with less than half of my income, at the moment, a payment upwards of 50% of the 13k they say I owe would be impossible. Another small caveat...the agreement the attorney sent has AAA AND JAMS listed. On the Citi site, only AAA is listed. Which do I run with?  I thank you again for you input @BackFromTheDebt

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From the NJ small claims FAQ. 

The Small Claims Section of the Special Civil Part Court is where you may sue a person or business (the defendant) to collect a small amount of money that you believe is owed to you. Since procedures in Small Claims are simpler than in other courts, persons usually can file and present their cases relatively quickly and inexpensively, and often without an attorney. The following answers to frequently asked questions explain how to file a complaint or an appeal, and gives general information about Small Claims in New Jersey. Small Claims is one of three sections within the Special Civil Part Court. The other two sections are Landlord/Tenant and regular Special Civil Part. Small Claims handles cases in which someone wants to sue for not more than $3,000 or $5,000 if the lawsuit is based upon the return of a tenant's security deposit. These are the money limits of Small Claims. If the amount of money you are trying to recover is more than the small claims money limits, but less than $15,000, your case should be filed in the regular Special Civil Part. Cases in which damages (money you are suing for) are more than $15,000, your case must be filed in the Civil Part of the Law Division of the Superior Court. If you believe you are entitled to damages greater than the money limits, but still wish to sue in Small Claims, you give up your right to recover damages over the money limits. The additional money cannot be claimed later in a separate lawsuit.

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@BackFromTheDebt Will this suffice? If they choose to arbitrate, my max out of pocket as the "consumer" would remain at 250.00 and I would still remain the "consumer" yes? And since the original request for DV did not specifically state that I disputed the debt (My mistep), Should that be added?

Re: Account Number:123456789

 

To whom it may concern,

 

As per the Card Member Agreement provided to me by your office, this is a letter of demand stating any legal action taken by your firm in reference to the aforementioned account be filed with one of the approved arbitrators listed in that agreement.  

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50 minutes ago, Racinghart03 said:

@BackFromTheDebt Will this suffice? If they choose to arbitrate, my max out of pocket as the "consumer" would remain at 250.00 and I would still remain the "consumer" yes? And since the original request for DV did not specifically state that I disputed the debt (My mistep), Should that be added?

Re: Account Number:123456789

 

To whom it may concern,

 

As per the Card Member Agreement provided to me by your office, this is a letter of demand stating any legal action taken by your firm in reference to the aforementioned account be filed with one of the approved arbitrators listed in that agreement.  

This is looking better for you.  Much better.

 

When Citi sold the debt to a JDB, the JDB took on the entire contract.  That means the arbitration agreement is still valid.

 

However, JDBs are less likely to pursue arbitration.  

Use the same strategy I lined up.  Send the lawyer a letter, CMRRR, saying you elect arbitration for all disputes concerning this debt.  Wait until they sue, then file an MTC, since this is not small claims or the equivalent.  It will take a number of months before the court will even hear any new cases.  

When you get your MTC, file in JAMS.  They will probably go away.  Not 100% certain, but probably.  

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So this? @BackFromTheDebt

Re: Account Number:123456789

 

To whom it may concern,

 

Please be advised that as per the Card Member Agreement provided to me by your office, I hereby elect arbitration for any and all disputes concerning this debt.

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1 hour ago, Racinghart03 said:

So this? @BackFromTheDebt

Re: Account Number:123456789

 

To whom it may concern,

 

Please be advised that as per the Card Member Agreement provided to me by your office, I hereby elect arbitration for any and all disputes concerning this debt.

That works.

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Thank you @BackFromTheDebt. I will draw this up tonight and send it CMRRR tomorrow. If you have any other thoughts before then please let me know. Am I correct to understand I can file the MTC even in the event the suit has already been filed? How likely would  having a suit filed less that 30 days after they sent me the requested verification of the debt? I am currently more than 30 days after the INITIAL contact from the attorney but since the first contact, I am less than 60 days total. Lastly, by sending my letter electing arb I am running block on a court visit, but in the event they beat me to it, I can still file the MTC later, it would just need to be done in court in the event they sue me in Civil  correct? I am trying to have my ducks aligned to the best of my ability before I fire away. 

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If you are certain this cannot be filed in small claims, then there is PROBABLY no harm in waiting for them to sue.  

Given the current COVID-19 situation, I don't know how long it would take for them to sue.

 

There are a few situations in which you do NOT want to wait for them to sue:

1. The case will be in small claims.

2. There is some reason you do not want a court case on your record.  For example, if you need a security clearance, or you work in a profession where it would be bad to have on your record.  For example, I am in banking now.  I had to show that all my court cases were all cleared up before I could get a job in banking.  There used to be a small scale politician who posted here frequently.  He doesn't want any more court cases on his record.  

3.  I once filed a preemptive JAMS when it was my wife's account.  She was not capable of defending herself in court, and I could not defend her in court.  So I filed in JAMS so I could represent her in JAMS.  

4. You will need a large loan soon, and an open court case would destroy your chances.  Not likely if you recently defaulted on a debt anyway.  

 

If none of these apply to you, you have nothing to lose.

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@BackFromTheDebt From everything printed I can only deduce small claims is up to 3k or 5k if it involves a tenant security deposit. That rules out small claims for a suit as the debt is higher than that. Short back story, I was ruined financially by my divorce 5.5 years ago..hence this issue. I have since rebuilt somewhat. Credit at the time was 550. Down from 770 before the bomb went off. I am up over 730 again and have gotten loans and leases and made all payments. I do want to get a house in the next few years so there is that. I like your theory about at least letting them know I would demand arb first. The only drawback I see is that they could probably pursue arb quicker than a court case at this time. Does it not also put them in a less advantageous position if they violate the agreement AFTER I demand arb? Or is the outcome the same...court with a MTC arb anyway? I just thought having them go against the demand (which I am entitled to as per the agreement) sets them up for a direct violation I can file with JAMS. Or can you file with JAMS over just about anything as the purpose is to cost the JDB money over the long haul and get a better settlement and not necessarily win the arbitration?  I am sure over the next six months or so I will be able to settle with something. Just at the MOMENT, no can do.  

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@BackFromTheDebt....Just realized something....Card Agreement says South Dakota laws govern the agreement, does that mean if I am sued in NJ by a NJ attorney that the small claims limits in South Dakota apply, or NJ???? Will the case be tried in SD??  This really matters! SD has a 12k small claims amount!!!!! NJ has 3k.

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Sent the election for arb in (their reasons or mine with no mention of a violation). I prefer to keep the matter out of court if possible. Would filing first for any violations be a wise move at this point? I know @fisthardcheese suggests this route most of the time. Would be able to choose and lock in JAMS as both AAA and JAMS are options? Or do I wait and see what their next play is? While a mutual walkaway would be ideal, I would not be opposed to a small settlement in a few months. I have heard the most these JDB buyers pay pennies on the dollar for these debts. Even if I offer 10% of the debt they claim I owe, it would be worth it to me to make it go away. Thoughts?

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15 minutes ago, Racinghart03 said:

Sent the election for arb in. I prefer to keep the matter out of court if possible. Would filing first for any violations be a wise move at this point? Or wait and see what their next play is? While a mutual walkaway would be ideal, I would not be opposed to a small settlement in a few months. I have heard the most these JDB buyers pay pennies on the dollar for these debts. Even if I offer 10% of the debt they claim I owe, it would be worth it to me to make it go away. Thoughts?

It depends on how badly you want to keep this out of court.  Nobody can answer that question except you.  If you really, really want to keep the matter out of court, you have to file in JAMS before they file in court.  

At this point, they would probably NOT take a 10% deal.  I said probably, because I do know of some cases in the past where 10% deals were accepted.

The only way to get them to take 10%, or possibly 0%, would be to go ahead and file in JAMS.  

Most debt collection law firms have some way of communication for settlement offers.  You need to figure out how to communicate with them.  They will probably respond to your letter about arbitration.  They might say unless you file by such and such a time they will sue.  Or maybe not.  

One possibility is to send them another letter after giving them a chance to reply to your arbitration election.  You can give them an offer, with a strict time limit, of 10%.  Note to them that if they don't accept the offer by the time limit, you will file in JAMS.  They will probably reject the offer.  In that case, file in JAMS right away.  As soon as you do that, your negotiating power increases dramatically.  

 

One thing some people have done -- fill out the JAMS forms.  Send they a copy and say you haven't filed in JAMS yet, but these are the papers you will send in at such and such a date unless they take your 10% offer.  That shows them you are serious, and they are more likely to accept a 10% offer at that point.  

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13 minutes ago, BackFromTheDebt said:

It depends on how badly you want to keep this out of court.  Nobody can answer that question except you.  If you really, really want to keep the matter out of court, you have to file in JAMS before they file in court.  

At this point, they would probably NOT take a 10% deal.  I said probably, because I do know of some cases in the past where 10% deals were accepted.

The only way to get them to take 10%, or possibly 0%, would be to go ahead and file in JAMS.  

Most debt collection law firms have some way of communication for settlement offers.  You need to figure out how to communicate with them.  They will probably respond to your letter about arbitration.  They might say unless you file by such and such a time they will sue.  Or maybe not.  

One possibility is to send them another letter after giving them a chance to reply to your arbitration election.  You can give them an offer, with a strict time limit, of 10%.  Note to them that if they don't accept the offer by the time limit, you will file in JAMS.  They will probably reject the offer.  In that case, file in JAMS right away.  As soon as you do that, your negotiating power increases dramatically.  

 

One thing some people have done -- fill out the JAMS forms.  Send they a copy and say you haven't filed in JAMS yet, but these are the papers you will send in at such and such a date unless they take your 10% offer.  That shows them you are serious, and they are more likely to accept a 10% offer at that point.  

It would be worth it to me to pay the 250 Jams fee now if that gives me the leverage out of the gate. They would probably counter I am guessing, offer the 10% with an agreement that says that no legal action whatsoever can arise in the future over all or any  part of the debt in question.  I would drop the arb case at that point with that agreement. I did like @fisthardcheese 's theory about having a bullet in the chamber if they sued AFTER I elected arb. I can swing the 250 to file. Or should I wait and see what they come back with?  And lets say they DO file arb with AAA. Can I still fire back with JAMS? Or do I need to counter with AAA? Aside from letting me know they were representing Cavalry, and responding to my DV request they never mentioned anything about court or suing or arb. I certainly do not believe they would not be working on it without telling me. Just a side point. 

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I would have never sent that meaningless "election" of arbitration letter.  You are only giving them more reason to rush a lawsuit into small claims.  Once they respond to your verification letter, NO further contact is always best unless it is through court or arbitration.

If this were me, I would be filing a claim with JAMS today.  Citi and Credit One are the ONLY card agreements I suggest doing this with due to to their small claims language.

You will have to pay the $250 filing fee to JAMS, but if you can't pay it now when you file the claim, send the claim anyway and JAMS will ask for it in a couple weeks if you need to buy time.  $250 will be the only required fee from you and there is no need to ask or talk about fees with anyone else.  JAMS will take care of billing the proper party (the JDB).

They are likely to still try to sue you. Court is generally inevitable.  Don't be afraid of it, just deal with it from a place of knowledge and leverage - which you are already getting a good start on by learning here.

  • Thanks 1

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30 minutes ago, fisthardcheese said:

I would have never sent that meaningless "election" of arbitration letter.  You are only giving them more reason to rush a lawsuit into small claims.  Once they respond to your verification letter, NO further contact is always best unless it is through court or arbitration.

If this were me, I would be filing a claim with JAMS today.  Citi and Credit One are the ONLY card agreements I suggest doing this with due to to their small claims language.

You will have to pay the $250 filing fee to JAMS, but if you can't pay it now when you file the claim, send the claim anyway and JAMS will ask for it in a couple weeks if you need to buy time.  $250 will be the only required fee from you and there is no need to ask or talk about fees with anyone else.  JAMS will take care of billing the proper party (the JDB).

They are likely to still try to sue you. Court is generally inevitable.  Don't be afraid of it, just deal with it from a place of knowledge and leverage - which you are already getting a good start on by learning here.

@fisthardcheese NJ small claims has a max of 3k. It would need to be filed in Civil unless they were willing to lose a large portion of what they say I owe. I was worried that South Dakota law, where the agreement states it is governed, by has a max of 12k and they could sue in NJ for the amount allowed in South Dakota. That's a big difference! I know you err on the side of aggression which I agree with. Would the JAMS filing be for some violation of FDCPA perceived or otherwise? The Card Member Agreement states that if I initiate the arb, I am responsible for the filing fee. I could swing the 250 if I need to.  

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8 minutes ago, Racinghart03 said:

@fisthardcheese NJ small claims has a max of 3k. It would need to be filed in Civil unless they were willing to lose a large portion of what they say I owe. I was worried that South Dakota law, where the agreement states it is governed, by has a max of 12k and they could sue in NJ for the amount allowed in South Dakota. That's a big difference! I know you err on the side of aggression which I agree with. Would the JAMS filing be for some violation of FDCPA perceived or otherwise? The Card Member Agreement states that if I initiate the arb, I am responsible for the filing fee. I could swing the 250 if I need to.  

If you have a good chance at avoiding small claims, then that is good. No need to file in JAMS beforehand, then. If that is the case, then I would wait until they sue and file the MTC in court and wait for that to be granted before I messed with JAMS.  Once the MTC is granted, then yes, you will have to pay $250 to JAMS, but that is a cheap price to dispatch of this debt eventually.

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1 minute ago, fisthardcheese said:

If you have a good chance at avoiding small claims, then that is good. No need to file in JAMS beforehand, then. If that is the case, then I would wait until they sue and file the MTC in court and wait for that to be granted before I messed with JAMS.  Once the MTC is granted, then yes, you will have to pay $250 to JAMS, but that is a cheap price to dispatch of this debt eventually.

@fisthardcheeseHow can I determine if they can sue in NJ small claims over an agreement that is governed by South Dakota law? That is the question that really drives my next move. Would the JDB pull the case from this attorney and reassign it to one in South Dakota? 

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Just now, Racinghart03 said:

@fisthardcheeseHow can I determine if they can sue in NJ small claims over an agreement that is governed by South Dakota law? That is the question that really drives my next move. Would the JDB pull the case from this attorney and reassign it to one in South Dakota? 

They can't.  They must sue you in the court district you reside in.

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