Credit card debt collection after 10 years

[Thomas Robinson]

Jurisdiction

Texas

I was contacted today by a "debt mitigation" company regarding a Providian CC account we last paid on in 2012. The rep told me something about the contract including a tolling option that extends the SOL by 15 years. I have not been able to find anything saying the SOL could be extended by that length of time. They gave me an offer to settle it for about 1/4 of what they are threatening to sue for and 48 hours to decide. Is this something I should make a counter offer on or should I just push that this is out of the SOL and call their possible bluff?

 

[army judge]

Is this something I should make a counter offer on or should I just push that this is out of the SOL and call their possible bluff?

You'll need to decide if the agency is bluffing and puffing.

If things are as you describe, this SHOULD be a winner for you!!!

To help you decide, here's Texas law regarding credit card debt and the SOL.

The statute of limitations to collect debt in Texas is four (4) years. When the four year clock starts to run has been debated in recent years. Creditors and debt purchasers try to argue that the clock starts when you made your final payment to the creditor while defense attorneys argue the clock starts at the first sign of default.

Many consumers struggle to make the minimum payments on credit card debt for months or years and they are usually in "default" under the credit agreement when they fail to make the minimum payment due. If one goes by the actual default date in the credit agreement, the clock usually started well before the last payment, especially when the last payment was nominal in comparison to the minimum payment due.

Texas courts are divided on the issue of when the statute of limitations for debt starts. If you have been sued (or might be sued) on an old debt, it is a good idea to try and determine when you made your last payment. If your last payment was more than four years from when the lawsuit was filed then you may have a good statute of limitations defense.

As stated above, the rule is when the lawsuit is filed, not when you are served with the lawsuit.

To raise a statute of limitations defense, you must plead it in your answer as an affirmative defense.

It is important to realize that you have the burden of proof when it comes to a statute of limitations defense. Do not assume that you will be able to have your "day in court" and present all of this to the judge. In fact, if you try to defend the lawsuit yourself, the creditor may file a Motion for Summary Judgment against you without you having the ability to prove your defense.

If you believe that your last payment on the debt was more than four years from when the lawsuit was filed you should try to obtain DOCUMENTARY proof. You might review your credit report at www.annualcreditreport.com . You are allowed one free credit report per year from each major bureau pursuant to Federal Law. Check to see when the account was charged off and subtract 180 days from this date. This is a good indication of when your last payment was. You can also try checking old bank statements or payment records for additional proof.


Additional reading material to help you decide!!!!

Statute Of Limitations On Credit Card Debt In Texas - DebtInfoClub.com
...

 

[Tax Counsel]

The rep told me something about the contract including a tolling option that extends the SOL by 15 years.

Even if that were true, in many states that contract term in a consumer contract is unenforceable. As I've not read the contract and don't know in which state the lawsuit would be brought, I can't tell you for certain if that's the case here. The guy giving you 48 hours to reply is BS. The creditor hasn't done anything to collect since 2012, it can't be reported on your credit report at this point and the collector likely has no real intention to sue. Saying you have just 48 hours to decide is simply meant to increase your anxiety and motivate you to pay. You can hurt yourself talking to the creditor about the debt, however, so from here on out I'd not discuss this with the collector at all. Either the collector sues or it doesn't. If it does, assert that the SOL is gone and make the creditor prove otherwise to the court. Only after the court says the SOL was still open when the collector filed would I discuss payment.

By the way, though I don't know the specific details of the call, what you've said so far leads me to suspect the creditor is violating the federal Fair Debt Collection Practices Act (FDCPA). If it does violate that Act, you could sue the collector for that violation.

 

[adjusterjack]

Tom, here is a link to the Fair Debt Collection Practices Act:

Fair Debt Collection Practices Act

 

[Thomas Robinson]

You'll need to decide if the agency is bluffing and puffing.

If things are as you describe, this SHOULD be a winner for you!!!

To help you decide, here's Texas law regarding credit card debt and the SOL.

The statute of limitations to collect debt in Texas is four (4) years. When the four year clock starts to run has been debated in recent years. Creditors and debt purchasers try to argue that the clock starts when you made your final payment to the creditor while defense attorneys argue the clock starts at the first sign of default.

Many consumers struggle to make the minimum payments on credit card debt for months or years and they are usually in "default" under the credit agreement when they fail to make the minimum payment due. If one goes by the actual default date in the credit agreement, the clock usually started well before the last payment, especially when the last payment was nominal in comparison to the minimum payment due.

Texas courts are divided on the issue of when the statute of limitations for debt starts. If you have been sued (or might be sued) on an old debt, it is a good idea to try and determine when you made your last payment. If your last payment was more than four years from when the lawsuit was filed then you may have a good statute of limitations defense.

As stated above, the rule is when the lawsuit is filed, not when you are served with the lawsuit.

To raise a statute of limitations defense, you must plead it in your answer as an affirmative defense.

It is important to realize that you have the burden of proof when it comes to a statute of limitations defense. Do not assume that you will be able to have your "day in court" and present all of this to the judge. In fact, if you try to defend the lawsuit yourself, the creditor may file a Motion for Summary Judgment against you without you having the ability to prove your defense.

If you believe that your last payment on the debt was more than four years from when the lawsuit was filed you should try to obtain DOCUMENTARY proof. You might review your credit report at www.annualcreditreport.com . You are allowed one free credit report per year from each major bureau pursuant to Federal Law. Check to see when the account was charged off and subtract 180 days from this date. This is a good indication of when your last payment was. You can also try checking old bank statements or payment records for additional proof.


Additional reading material to help you decide!!!!

Statute Of Limitations On Credit Card Debt In Texas - DebtInfoClub.com
...

ArmyJudge, Thanks for your input. I had a similar call about a year or so ago where they were threatening filing a lawsuit and at that time I referenced the SOL and never heard back. I do not know, and seriously doubt, if any lawsuit has been filed. The rep didn't say they had filed, only they would, so this leads me to believe it is a scare tactic.

I must admit she was one of the better reps I've heard as she was very nice about it all. Anyway, i think I'll do as another reply mentioned and not contact them so as not to get into it further. I did think the 48 hours limit was BS since all I've read says you have 30 days to respond.

 

[Thomas Robinson]

Even if that were true, in many states that contract term in a consumer contract is unenforceable. As I've not read the contract and don't know in which state the lawsuit would be brought, I can't tell you for certain if that's the case here. The guy giving you 48 hours to reply is BS. The creditor hasn't done anything to collect since 2012, it can't be reported on your credit report at this point and the collector likely has no real intention to sue. Saying you have just 48 hours to decide is simply meant to increase your anxiety and motivate you to pay. You can hurt yourself talking to the creditor about the debt, however, so from here on out I'd not discuss this with the collector at all. Either the collector sues or it doesn't. If it does, assert that the SOL is gone and make the creditor prove otherwise to the court. Only after the court says the SOL was still open when the collector filed would I discuss payment.

By the way, though I don't know the specific details of the call, what you've said so far leads me to suspect the creditor is violating the federal Fair Debt Collection Practices Act (FDCPA). If it does violate that Act, you could sue the collector for that violation.

What you said was basically my wife's reaction. Think I'll follow this advice and see how it plays out. The last payment made was definitely over 10 years ago.

 

[Thomas Robinson]

One other thing I forgot to mention. The collector contacted my father, who's 93 (not that his age matters), and not me directly. Are they allowed to contact relatives?

 

[army judge]

One other thing I forgot to mention. The collector contacted my father, who's 93 (not that his age matters), and not me directly. Are they allowed to contact relatives?

No, that is why you need to familiarize yourself with FDCP Act:

Fair Debt Collection Practices Act
...

A creditor may seek to collect an outstanding debt in several ways. However, because of "abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors," (15 U.S.C. § 1692) Congress enacted the Fair Debt Collection Practices Act (FDCPA) in 1978, codified in 15 U.S. Code Subchapter V.

Overview
The FDCPA provides debtors with a means for challenging payoff demands, and for determining the validity and accuracy of asserted debts. 15 U.S.C. §1692g. Perhaps more importantly, however, the FDCPA establishes ethical guidelines for the collection of consumer debts. Congress targeted such behavior because it found that "[a]busive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy. " 15 U.S.C. §1692.

Prohibitions on Debt Collector Action
"The FDCPA broadly prohibits a debt collector from using 'any false, deceptive, or misleading representation or means in connection with the collection of any debt.' 15 U.S.C. § 1692e." The statute enumerates several examples of such practices, 15 U.S.C. § 1692e, as well as several examples of unfair practices, 15 U.S.C. § 1692f. The FDCPA also provides, for example, that debt collectors may not harass or annoy debtors, may not threaten debtors with arrest, and may not threaten legal action unless litigation actually is being contemplated. 15 U.S.C. §1692d.

The FDCPA prohibits debt collectors from contacting debtors before 8:00 a.m. or after 9:00 p.m., but it does not prohibit debt collectors from contacting debtors on holidays or weekends unless they know or have reason to know that doing so would be "inconvenient" to the debtor. The FDCPA even gives debtors the right to demand that the third-party debt collector terminate all further communications, but the demand must be in writing. 15 U.S.C. § 1692c.

The FDCPA prohibits third-party debt collectors from contacting a debtor directly if they know the debtor is represented by counsel. 15 U.S.C. § 1692b.

Requirements for Debt Collector Action
Additionally, in their first communication with the consumer, debt collectors are required "to notify debtors about their ability to challenge the validity of a debt and to provide other basic information." Foti v. NCO Financial Systems, Inc., 424 F.Supp.2d 643, 653 (S.D.N.Y. 2006) (citing 15 U.S.C. §1692g). This includes informing the debtor of their right to ask the collection agency to "validate" the debt.


Fair Debt Collection Practices Act
...


https://www.consumerfinance.gov/com...ther-applicable-requirements/debt-collection/
...

 

[Zigner]

No, that is why you need to familiarize yourself with FDCP Act:

Fair Debt Collection Practices Act
...

I'm may want to disagree with you a bit about that, but only because we really don't know what was discussed when the debt collector contacted the OP's father. A debt collector is allowed to contact a third party to try to get location information, as long as they follow certain guidelines:


§ 804. Acquisition of location information
Any debt collector communicating with any person other than the consumer for the purpose of acquiring location information about the consumer shall --

(1) identify himself, state that he is confirming or correcting location information concerning the consumer, and, only if expressly requested, identify his employer;

(2) not state that such consumer owes any debt;

(3) not communicate with any such person more than once unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information;

(4) not communicate by post card;

(5) not use any language or symbol on any envelope or in the contents of any communication effected by the mails or telegram that indicates that the debt collector is in the debt collection business or that the communication relates to the collection of a debt; and

(6) after the debt collector knows the consumer is represented by an attorney with regard to the subject debt and has knowledge of, or can readily ascertain, such attorney's name and address, not communicate with any person other than that attorney, unless the attorney fails to respond within a reasonable period of time to communication from the debt collector.[/QUOTE]

 

[Thomas Robinson]

Thank you both for your input. I'll familiarize myself with the FDCPA, just haven't had time (or need).