Creditwrench teaches the secrets of the debt collection industry and how to defeat their abusive practices without lawyers. We know how to win!
Thursday, November 19, 2009


Collections Law


Sued by Original Creditor-I think

Hello Creditwrench!
I was checking my local clerk of courts site looking into a erroneous tax sale against our property (predates purchase and was missed by title company..I got it voided). Anyway, I saw that I am being sued on a Discover Card account that I had submitted to a debt settlement agency in February this year. Yes, I idea: It cost me nearly $4,000 for them to "help" me with our credit cards...a.k.a do nothing, and now I am being sued so the money would sure be handy to have toward settling (it was my hubby's idea and I could not talk him out of it).

The suit was filed 10/28 by a somewhat local attorney that I have never heard of and sent to the sheriff for service on 11/02; I have not been served as yet. I received no communication of any kind from this attorney prior to their filing the suit so had no opportunity to ask for debt validation (15 USC 1692g section 809 (d) says that legal pleadings are not to be treated as an initial communication-so should I still have the right to validate?).

I plan on going pro se and am looking for some help in preparing my answer and paperwork after I finally get served: I will only have 15 days to answer after I get the papers. I have obtained a copy of the local court rules to familiarize myself with the "do's" and "do not's". I know that I will have to answer the claims made by the plaintiff's attorney as either affirm, deny, or lack the knowledge or information sufficient to form a belief as to the truth of the allegation. I also understand that I must provide a copy to the plaintiff's attorney and the original plus a certificate of service to the clerk of court. I have read elsewhere that I should file a affidavit of exemptions claimed and possibly a notice of appearance?

Where I get confused is affirmative defenses, discovery, and interrogatories. I know that throwing out too many affirmative defenses that aren't completely relevant can irritate the judge and make him see my side as frivolous (grasping at straws). I have been reading as much case law from this state as possible. Louisiana justices have been giving some credence to credit card contracts being contracts of adhesion, and unfair and deceptive trade practices. I want the attorney to disclose if this is truly an assignment or if they have purchased the debt; if it was purchased how much was paid; how the current balance was calculated including all fees and interest; provide the original contract and all subsequent addendums or updates; that payments in excess of the minimum were applied in accordance with FDIC rules 12 CFR 227.23 and 227.25; that I was provided "clear and conspicuous written notice of all amendments to the card agreement 15 days prior to the change and election to opt-out" as per Delaware Code Title 5, Chapter 22, SubChapter 11 section 224(b)(1), and a few other things that I have dug up.

Am I way off base here and they will just laugh at me then throw a piano on my head ala roadrunner and willey coyote?

Some other relevant information....The card is within the SOL and I do owe the principal, but they are asking for nearly 2x the balance from February. I am self employed and my only income (very small) is from a multi-member LLC (have been ill and can only work about 3-5 hours a day lately). Since this is a community property state, we set my husband, who is also self employed, up with his own multi-member LLC (I intervened in his operating agreement and held that his interest in the company and all profits or payments were his separate property as well as all capital used to start the company-all are notarized and filed per Louisiana laws): His income is in the form of a guaranteed payment as manager of the LLC.

The only assets we have that are not exempt under Louisiana law is one car, and two older motorcycles; all of which are for sale locally for fair market value. We have no cash assets to speak of...most have been used to pay my doctors... and I know that judgements last 10 years and may be renewed for an additional 10 before the first term expires.

So, that is our pickle. I have been reading your answers to folks on here for some time and always found you to be very helpful, so though...what the heck, I'll ask. Thanks in advance for any assistance you may be able to offer.

You certainly are far more knowledgeable than most. Your first question is whether or not you can demand validation since (15 USC 1692g section 809 (d) says that legal pleadings are not to be treated as an initial communication. So to reach a plausible answer that question we have to understand what legal pleadings are. If we look for the definition of legal pleadings we find that almost all if not all documents including the complaint are considered to be legal pleadings. So how do we get around that section and still have grounds upon which we can logically demand validation and to do that we need to determine what an initial communication is.

We can easily arrive at the conclusion that the pleadings are not their initial communication with you in any case. In order to conclude that the pleadings are not their initial communication we have to analyze the sequence of events that occur during the service of summons. The process server comes to your door papers in hand and the first thing they do is hand you the summons and possibly explain a bit about the summons and what it requires of you. Once that has been done he hands you the papers with the summons on top and therefore the summons is their initial communication with the consumer and not the complaint. You get to read the complaint after the process server leaves. So the complaint becomes the second communication with you for all practical purposes. A summons is not a legal pleading therefore I think that you can demand validation and I have my students send demand for validation to the plaintiff's attorney at the same time they send their response to the plaintiff's attorney.

I believe that any action on the part of the attorney after that point becomes illegal continued collection activity unless they provide a full and complete accounting of the debt prior to doing anything else including providing their response to demand for admissions which I also have my students send along with their response. So far we have not had any reason to take that concept to federal court but the time will come when we must present the question to a federal judge. At that time we will have the answer to the question of whether or not a summons can be considered the initial contact with the consumer if no other communication have preceded the service of summons and whether or not they must then provide full and complete documentation before doing anything else including responding to discovery demands.

You must understand that I am not an attorney so can't give you a legal opinion on that matter. We will just have to wait until someone takes that issue to a federal court for determination. In the meantime, what can it hurt to send demand for validation at the same time you send your response? Next you talk about affirmative defenses. I greatly dislike the use of affirmative defenses because an affirmative defense requires an assertion of facts beyond those claimed by the plaintiff, generally the party making an affirmative defense bears the burden of proof. While an unwaivable affirmative defense is subject matter jurisdiction that too must be proven by the defendant once raised and that can be very difficult to do.

On the other hand, an affirmative defense is different from a negating defense. A negating defense is one which tends to negate one or more or all of the essential element of the plaintiff's case therefore I think a negating defense is far better than an affirmative defense. I always have my students use a negating defense. Attorneys hate it when we do that and often object by claiming that the defendant raised no defense at all therefore they should be granted a default judgment. I've never seen a judge allow that argument yet but I have seen attorneys become extremely upset when the judge rules against them on that point.

In fact, I went to court with a friend who used a negating defense and the lady lawyer tried to argue that a default should be granted because the defendant had not filed a proper response to their complaint and she became very upset when the judge ruled against her. She became so upset that it was very funny and I made a comic video about it which I put on youtube and other video sites as well as on my web site. I would very definitely recommend that you use a totally negating defense instead of an affirmative defense.

I do think that many of the questions you are planning to ask will get you nowhere at all. They will simply claim attorney -client priviledge or any other excuse they can dream up to avoid response to those questions and you will have wasted valuable quota that could have been put to better use. You can almost bet that you will lose in local court no matter how you respond or what else you do. You can also count on the fact that they will learn about your corporations and will move to pierce the corporate veil and will have no trouble doing so.

They will go after your corporations as well so they are of little value for hiding assets as well. It is obvious that you are thinking in conventional ways, well inside the box and if you want to win you will have to start thinking outside the box and get agressive instead of being passive. The defense very seldom wins. If it were me I'd hand that attorney his walking papers in the form of a well prepared federal case against him if he does anything wrong at all.

That's the way to win.
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