3 questions re: SOL and Proof of Debt

[Johnston]

What is the name of your state? Alabama

Where can I find information on the SOL for my state and whether a credit card is an open or written account?

When exactly does the SOL start? I have read several different versions. Let me just say that I do have an old letter from the cc that the account was in default in December of 2000 I'm not sure before that when it was ever "caught up" but I do have a lot of old statements from that time that I can look back through I just need to know what to look for. My credit report does not have a DLA on this particular one which I thought was odd.

When a credit card delinquency has been passed around (bought) by many different agencies (at least 5 that I know of) what are the chances that the one that has it now has the proof that you actually owe this debt and don't just have a name, amount and ss#? What type of proof does that collection agency actually have to have?

Thanks for your help!

 

[Ladynred]

Where can I find information on the SOL for my state and whether a credit card is an open or written account?

Credit cards are generally held to be open. The SOL in AL for such an account is 3 years. Collection attorneys will always try to say they fall under 'written contracts', which most often have longer SOL's. In AL that's 6 years.

When exactly does the SOL start?

The SOL for legal action to enforce collection of a debt begins when the account first went delinquent and was never again paid upon. Basically 30 days after your last payment.

What type of proof does that collection agency actually have to have?

That is a subject of great debate. If you get sued and wind up in court, a judge will go by the 'preponderance of evidence', which could be as little as as signed credit card receipt or a single statement.

I suggest you read up on debt validation here: www.creditinfocenter.com.

 

[Johnston]

Thank you for your reply. I guess my main question now is - how do I find proof when the SOL started. There is no DLA on 2 credit reports that I have checked. Like I posted earlier I do still have a default/account closed letter from the original creditor that was dated December 2000. I am assuming that the account was delinquent several months prior to that but I don't know how to verify that. I am afraid that W&A will take me to court and if they do the SOL will be very close to running out if it hasn't already.

Should I send them a validation letter? Are they required to validate before they can take any other steps?

How would I know if it is an open account or written account?

Thank you

 

[Ladynred]

how do I find proof when the SOL started. There is no DLA on 2 credit reports that I have checked.

That statement from Dec 2000 is probably enough as long as you're certain no payments were made after that. Call the credit bureaus and ask for the date of first delinquency on the original account, that is the ONE date that creditors are required to report per the FCRA.
Also, the drop-off date would give you a pretty good clue too. When do the reports say these tradlines will be removed ? That's not iron-clad, but it's darn close and it's only a 3 year SOL.

Should I send them a validation letter?

You can.

Are they required to validate before they can take any other steps

Not necessarily.

How would I know if it is an open account or written account?

AL statutes

3 Years Open Acct. Oral Contacts; §6-2-37

§6-2-37
Commencement of actions - Three years. The following must be commenced within three years:

(1) Actions to recover money due by open or unliquidated account, the time to be computed from the date of the last item of the account or from the time when, by contract or usage, the account is due;

6 Years Written Contracts Not Under Seal; §6-2-34

 

[Debt Guy]

Lady and I disagree which SOL applies to a credit card. I think you will find a lot of people on both sides of this question. Ultimately, how well you do with the issue will depend on two things (1) the laws of your state and (2) how effectively you can point that specific statute out to the judge and make your arguement to the judge. I would start my research and study now if you are serious about trying to use the open account SOL as an affirmative defense.

My normal response to this question is as follows:

There is considerable debate whether a credit card is a written agreement or an open account.

The Truth in Lending Act seems to be the common catalyst for people’s belief that a credit card is an open account. The TILA does not mention "open accounts", and its applicability to such would to me be very questionable. What it does refer to is "open end" credit. An "open end" and an "open account" are not the same. Unfortunately, because of similar names and the word "open" being included in both, most people assume they mean the same thing; they don't. While credit cards are "open end" accounts, they are rarely considered "open accounts." However, some charge cards can be considered open accounts, but a "charge" card is different than a "credit" card.

There is little law on this subject and it is not entirely clear which statute of limitations should apply to a credit card debt. Most decisions in state court are not published and I have seen none appealed to Federal court where you can actually see some case law. This is one case in Ohio (somebody vs. unifund) that is more perplexing than anything else (at least in my mind) because it covers so much territory.

In my opinion, in situations in which the financing is provided by the merchant, then the “open account” statute of limitations should apply because the transaction is one for the sale of goods and the financing aspect is merely a portion of that arrangement.

However, if a third party provides the financing (like a bank card), then the suit is one based on the written contract to provide credit.

More and more it seems that judges in a number of states are persuaded by the argument that a bank credit card is not the same as a store charge card. As a result, judges seem to be taking the view that credit cards are written agreements.

I am personally aware that judges in IL, FL, OK and AZ are ruling that credit cards are written agreements. VA is the only state I am aware of where a judge has ruled a credit card to be an open account.​

 

[Ladynred]

I am personally aware that judges in IL, FL, OK and AZ are ruling that credit cards are written agreements

Hey DG, you may be interested in this March 06 case law in FL -- credit cards fall under the 4 year SOL and this WAS in a court of record.

PORTFOLIO RECOVERY ASSOCIATES, LLC, Appellant, v_ PAUL FERNANDES, Appellee_ Circuit Court, 15th Judicial Circuit (Appellate) in and for Palm Beach County

Can't post the whole case here, so here's a link to where you can:
http://debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=45438


It may not work on ALL cases, but it's a start !

 

[bigun]

The thing that many miss about debts this old is, the SOL is only one defense.
Often, the collection lawyer can't provide proof that the debt is yours. Creditboards has had a number of instances similar to the following where a judge never even made the SOL call. Just saw that the collector didn't have the goods.

http://creditboards.com/forums/index.php?showtopic=41548&hl=


Here's a freeadvice thread with a similar ending. Do a search for a poster named ttoby who successsfully employed a similar defense.

https://forum.freeadvice.com/showthread.php?t=227512&highlight=mark+asset+acceptance

Remember, it ain't yours until the man or woman in black says it is!

 

[Debt Guy]

NOTE TO LNR -- I read the FL case -- I is essentially identical to the OH case I mentioned.

In both, the card in question was a "store card" that was used solely to purchase goods and services from that particular merchant and was never used in any other way. In FL it was a Sears card -- in OH it was a Montgomery Ward card.

I guess I do not explain very clearly, but this is exactly the point I have tried to make over and over and over. A "CHARGE CARD" IS NOT THE SAME AS A "BANK CREDIT CARD".

A charge card is an open account. A charge card (as in these two specific cases) is an extension of credit by the merchant to facilitate the sale of the merchant's goods and services.

A bank credit card is a written agreement. A bank credit card is the extension of credit to a consumer in a form that allows easy and convenient purchase of goods and services from just about anyone in the world EXCEPT the issuer of the card.

99.5% of all the questions posted here relate to bank credit cards -- that is why I answer their SOL questions with the written agreement SOL.

NOTE TO BIGUN: Many junk debt buyers do not have the evidentiary materials regarding the debt. Mostly, they don't need it because very few debtors raise a defense and the JDB wins by default. Also, most judges are of a pro-creditor mindset. The example in the link you posted is extraordinary in that the judge was (in my mind) decidely pro-debtor. I do indeed wish more debtors would stand up to these guys. However, for the benefit of laymen who are reading this -- this was not an SOL issue -- it was a evidentiary issue -- these are different strategies and fought with different tools.