Statute of Limitations???

[Tapped Out]

What is the name of your state? Massachusetts

My husband went to school in California (1993-1995). While he was there, he incurred some credit card debt. He moved to Canada in the summer of 1995 after finishing, and never expected to return to the United States. As it turned out, we are back again. We moved to MA in early 2001. We bought our first house this year, and we just closed on the deal and moved in this past July. Last week, we received a letter from a collection agency that informed my husband of a debt that he owed to AT&T (I think) to the tune of $4300. If we paid by Oct 1/04, then we would only be responsible for $2150. I am wondering if there is a statute of limitations. The debt would have been incurred prior to the fall of 1995, or however long the credit card company kept the file open. We've been in MA since January of 2001, and have heard nothing until this last week.

Any suggestions? Is it legal? Do we have to pay the collection agency? Are they just hoping that we don't look into this debt further? Thanks in advance...

[JETX]

Originally Posted by Tapped Out

The debt would have been incurred prior to the fall of 1995, or however long the credit card company kept the file open. We've been in MA since January of 2001, and have heard nothing until this last week.

Normally, the Statute of Limitations on a credit card debt in Californis is 4 years. However, California, like most other states, provides for a FREEZE on the Statute of Limitations (SOL) when the debtor leaves the state. This is provided in the California Code of Civil Procedure:
"§351. If, when the cause of action accrues against a person, he is out of the State, the action may be commenced within the term herein limited, after his return to the State, and if, after the cause of action accrues, he departs from the State, the time of his absence is not part of the time limited for the commencement of the action."
Simply, that means that the SOL in California has not tolled.

The SOL in Massachusetts for a credit card debt is 6 years. However, since it starts on the DOLA (Date of Last Activity), it presumably would have tolled on this debt.

So, the choice is yours. If the creditor sues you in California (if that is the original contract state), the debt would appear to be valid and the judgment could then be domesticated into MA, where it would be valid for 20 years.
If they were to sue you in MA, you can certainly try to assert the claim of an expired SOL.

[Tapped Out]

I understand what you are saying. If we assert the expiration of the SOL to the collection agency based on the DOLA, that should be that unless they want to sue us in California, though, right? If that were the case, we would probably hear about it before it came to that. Is that a fair assumption?

Thanks again for the information, it is a really big help.

[JETX]

Originally Posted by Tapped Out

I understand what you are saying. If we assert the expiration of the SOL to the collection agency based on the DOLA, that should be that unless they want to sue us in California, though, right? If that were the case, we would probably hear about it before it came to that. Is that a fair assumption?

Thanks again for the information, it is a really big help.

The creditor can chose what state SOL to use, between the state where the contract was entered, where you live now, or the 'venue state' as set by the contract (if any).
Simply, if they sue you in California, you are probably DOA.
If they sue you in Massachusetts, you can certainly try to assert the SOL defense.

[Tapped Out]

I talked to my husband and got some more information...

When he got the credit card, he lived in CA. He then moved to DC, and that's when he defaulted. I looked on a website and found that the SOL for DC is 3 years. The debt was incurred in 1995 and nothing since then. Does accrued interest count in the calculation of the DOLA? The debt has since fallen off his credit report. If he choses not to pay the credit agency, can they then put the debt back on his report? I've also read about a "cease and desist" letter. What needs to be in such a document? Is there a form letter that we could use? One last thing... My husband is a foreign national here on a VISA. Does that have any impact on this?

Just so that I am clear... The credit agency can choose to sue in either DC, or MA. If it's MA, then we have a shot at the SOL defense. Would it benefit us to contact the credit agency with a "cease and desist" letter on the basis of an expired SOL, or should we just ignore them?

Thanks again, in advance, AGAIN.

[Tapped Out]

After more reading, I stumbled upon "debt validation" letters. Would it be better to assert the SOL defense, or should we request debt validation? Again, as I understand it, debt validation would include whether or not the SOL has expired.

Thanks yet again.

[cmorris]

Personally, I would send a DV letter, that also stated to only contact you in writing. A computer printout (what is usually provided) is not proper validation, so there may be some hope.

If they can provide proper validation and the SOL was frozen, your husband can likely still settle the debt. It is old and the CA bought it cheap, so they will make sure they make a profit.

Good luck

[Tapped Out]

How would we find out if the SOL was frozen? Would that be included in the validation?

[Ladynred]

First of all, the DC SOL has nothing to do with this. Per the FDCPA, they can only sue you where the contract was entered into (CA in your case) or where you live NOW. DC wouldn't even enter into the picture on this one. For the most part, IF they sue, its usually where you live now, especially on an old debt and they have your current address.

Does accrued interest count in the calculation of the DOLA? The debt has since fallen off his credit report. If he choses not to pay the credit agency, can they then put the debt back on his report?

No and No. Once a debt ages off your credit report it can NOT be put back on -not legally anyway. If the collection agency tells you they can - they're LYING (no surprise there !)

I've also read about a "cease and desist" letter. What needs to be in such a document? Is there a form letter that we could use?

Yes, use this one:
[url]http://community-2.webtv.net/YCHANGE/STORAGE/page13.html[/url]

Its worth a shot, I'd try it anyway. Chances are they'll go away w/o a fight.

My husband is a foreign national here on a VISA. Does that have any impact on this?

Nope, not a bit.

How would we find out if the SOL was frozen? Would that be included in the validation?

HA ! You'd be lucky if they even reply to a validation letter, let alone tell you the SOL in CA has been frozen. Most of them don't know squat about state laws, they wouldn't have a clue.

I'd go with the SOL letter and forget validation.

[Tapped Out]

OK, what if the there is a judgement on the original debt... That would be new on the credit report, right?

[JETX]

Originally Posted by Tapped Out

OK, what if the there is a judgement on the original debt... That would be new on the credit report, right?

Not necessarily. There is no obligation for a creditor (debt or judgment) to report that fact to any CRA. The fact that it may not show does not mean it does not exist.

[Tapped Out]

We sent a request for validation by certified mail with a return receipt request yesterday. In that letter, we gave them 30 days from their receipt of the letter to respond. If they don't, or they don't send the appropriate information, is this over then? Other than paying, what would make this over? In the letter, we asked for proof that the statute of limitations hasn't expired. They should be able to do that, right?

Thanks again. REALLY.

[JETX]

Originally Posted by Tapped Out

We sent a request for validation by certified mail with a return receipt request yesterday. In that letter, we gave them 30 days from their receipt of the letter to respond. If they don't, or they don't send the appropriate information, is this over then?

Nope. However, until they respond to your validation letter, they must (per the FDCPA, 15 USC 1692g):
"(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector."

Other than paying, what would make this over?

If the SOL is in fact tolled, they can't force you to pay. I can't think of anything else that would make an otherwise valid debt be 'over'.

In the letter, we asked for proof that the statute of limitations hasn't expired. They should be able to do that, right?

That is one way, but since the SOL statement is not a requirement of the validation process, I doubt that they will answer that for you. When you get the validation back (if you do), return here with the FACTUAL dates and we'll see where to next.

[Tapped Out]

Is it likely that they'll answer? From what I've read on various threads here, the CAs don't always answer those letters. I guess it's just wait and see from here.

If they neither answer nor send validation then I guess it's just wait and see, right?

Thanks yet again.

[cmorris]

It's good if they don't answer! Just make sure you have the return receipt as proof that you sent the DV letter. This means they cannot continue collection activity. Your CR cannot show the debt or it has to be in dispute.