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Credit Card Collections Suit - Does Alleged Assignee Have The Right To Sue?

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sandyclaus

Senior Member
What is the name of your state (only U.S. law)? California - for a friend.

Credit card was issued in their name back in 2005 with the now-defunct Washington Mutual Bank (Wamu). Friend defaulted on the account sometime in late 2007 and it went to collections with Wamu. A payment arrangement was made and payments made as promised until 2008, when the bank was taken over by Chase. Payments continued to be made under the agreement, but now were being made to Chase, until Chase decided to try to renegotiate the arrangement. My friend did not agree with what they were demanding, and let the account go. Since that time, the debt was sold and re-sold to several creditors, attempting to collect on the now written-off credit card debt.

Fast forward to today, when the friend received a summons and complaint by mail from CACH, LLC., the latest creditor to take the debt, to sue for the unpaid balance. However, CACH says they are an assignee of Wamu, NOT Chase. Per the above, Wamu no longer has the debt. They were the ORIGINAL CREDITOR, but did that designation not go to Chase when the accounts were bought out by Chase, especially when the payments continued to be made on the debt were actually sent to Chase after the buyout? Does that make a difference in whether or not CACH would have authority to sue for this debt?

Of course he is going to file an answer and request discovery to include the proof of assignment from Wamu to CACH, which is going to be mighty interesting, since Wamu has been defunct for almost 4 years now. He's just trying to figure out how to answer at this point.

Thanks for any input on this.
 


Ohiogal

Queen Bee
What is the name of your state (only U.S. law)? California - for a friend.

Credit card was issued in their name back in 2005 with the now-defunct Washington Mutual Bank (Wamu). Friend defaulted on the account sometime in late 2007 and it went to collections with Wamu. A payment arrangement was made and payments made as promised until 2008, when the bank was taken over by Chase. Payments continued to be made under the agreement, but now were being made to Chase, until Chase decided to try to renegotiate the arrangement. My friend did not agree with what they were demanding, and let the account go. Since that time, the debt was sold and re-sold to several creditors, attempting to collect on the now written-off credit card debt.

Fast forward to today, when the friend received a summons and complaint by mail from CACH, LLC., the latest creditor to take the debt, to sue for the unpaid balance. However, CACH says they are an assignee of Wamu, NOT Chase. Per the above, Wamu no longer has the debt. They were the ORIGINAL CREDITOR, but did that designation not go to Chase when the accounts were bought out by Chase, especially when the payments continued to be made on the debt were actually sent to Chase after the buyout? Does that make a difference in whether or not CACH would have authority to sue for this debt?

Of course he is going to file an answer and request discovery to include the proof of assignment from Wamu to CACH, which is going to be mighty interesting, since Wamu has been defunct for almost 4 years now. He's just trying to figure out how to answer at this point.

Thanks for any input on this.
Your friend needs an attorney.
 

tranquility

Senior Member
I agree with Ohiogal, once in court, grasping at straws is not a good strategy. Get an attorney. But, as to the question, the assignee of a contract's rights certainly has standing to sue.
 

mmmagique

Member
They may not have standing to sue...depending on *when* in 2008 your friend quit paying on the debt, and if your friend did not toll the statute. Statute of limitations in CA. on cc debt is four years. If your friend can prove it was out of statute, (cite it as an affirmative defense) then (s)he may get the case thrown out.
 

Zigner

Senior Member, Non-Attorney
They may not have standing to sue...depending on *when* in 2008 your friend quit paying on the debt, and if your friend did not toll the statute. Statute of limitations in CA. on cc debt is four years. If your friend can prove it was out of statute, (cite it as an affirmative defense) then (s)he may get the case thrown out.
Nobody said the friend quit paying in 2008:

A payment arrangement was made and payments made as promised until 2008, when the bank was taken over by Chase. Payments continued to be made under the agreement, but now were being made to Chase...

ETA: WAMU was seized by the feds in Sept of 2008.
 

tranquility

Senior Member
They may not have standing to sue...depending on *when* in 2008 your friend quit paying on the debt, and if your friend did not toll the statute. Statute of limitations in CA. on cc debt is four years. If your friend can prove it was out of statute, (cite it as an affirmative defense) then (s)he may get the case thrown out.
Please review the legal term "standing".
 

sandyclaus

Senior Member
Exactly, Zig. In fact, the payments were made throughout 2009 and into 2010 to Chase under the terms of the original payment arrangement through Wamu. They stopped paying in 2010 because Chase wanted to renegotiate the terms of the payment arrangement.

The question is not whether or not the debt is owed, but to WHOM the debt would have been owed at the time the payments stopped. CACH has stated in their complaint that Wamu assigned them the debt, but it would have had to be Chase because Wamu no longer existed at the point of default under the payment arrangement. The debt remained with the company and didn't go out to collection agencies until after Chase absorbed the debt along with the other Wamu accounts during the buyout. That's why I'm wondering if, based on that point alone, the suit could be dismissed.

And to the others, just trying a little due diligence to see whether or not it would even be necessary to get an attorney involved, or the friend can just challenge based on no standing or another relevant legal defense here.
 

Zigner

Senior Member, Non-Attorney
Chase took over the operations of WAMU - It is not incorrect for the collector to say they acquired this debt from WAMU.
 

latigo

Senior Member
What is the name of your state (only U.S. law)? California - for a friend.

Credit card was issued in their name back in 2005 with the now-defunct Washington Mutual Bank (Wamu). Friend defaulted on the account sometime in late 2007 and it went to collections with Wamu. A payment arrangement was made and payments made as promised until 2008, when the bank was taken over by Chase. Payments continued to be made under the agreement, but now were being made to Chase, until Chase decided to try to renegotiate the arrangement. My friend did not agree with what they were demanding, and let the account go. Since that time, the debt was sold and re-sold to several creditors, attempting to collect on the now written-off credit card debt.

Fast forward to today, when the friend received a summons and complaint by mail from CACH, LLC., the latest creditor to take the debt, to sue for the unpaid balance. However, CACH says they are an assignee of Wamu, NOT Chase. Per the above, Wamu no longer has the debt. They were the ORIGINAL CREDITOR, but did that designation not go to Chase when the accounts were bought out by Chase, especially when the payments continued to be made on the debt were actually sent to Chase after the buyout? Does that make a difference in whether or not CACH would have authority to sue for this debt?

Of course he is going to file an answer and request discovery to include the proof of assignment from Wamu to CACH, which is going to be mighty interesting, since Wamu has been defunct for almost 4 years now. He's just trying to figure out how to answer at this point.

Thanks for any input on this.
If you and the friend wish to quibble over such niceties, fine. But it shouldn't take an Oliver Wendell Holmes to understand that the plaintiff's pleading merely represents to the court that it is the successor owner of the delinquent credit card account and thus is the real party in interest entitled to bring an action upon that account.

(Perhaps it could be stated more precisely, but it is sufficient to permit the plaintiff to produce supporting evidence.)

And here is something really “interesting”.

Your deadbeat friend might wish to consider that the more time the lawyer representing CACH is required to devote to the lawsuit the greater will be the bottom figure on its judgment!
 

Bosco

Member
Not that it makes any difference now, but your friend made a mistake when he stopped making payments. Chase could have tried to renegotiate that all they wanted, but he was under no legal obligation to do as such and could have continued with the payment plan as agreed as Chase was legally bound to it. There might...might be a way to use that to his advantage in court, depending on exactly what Chase said and what, if any documentation your friend has to prove this. At the very least, it could put your friend in a positive light as someone who made a good faith effort to settle the debt, something the judge can take into consideration.

That said, I'd have your friend file a counterclaim under Section 805(2)(A) of the FDCPA. If CACH has claimed that WaMu assigned them the debt, that is clearly false. If they've bought the debt, than they are not an assignee period, and I know that WaMu/Chase tend to sell off their debts because I've dealt with them three times. Firing off a counterclaim puts your friend on the offensive a little bit, can take a chunk out of the debt owed (if it gets that far) and can make the creditor more agreeable to settlement.

On a side note, are you sure your friend has actually been sued? A summons and complaint would come from the court, not the creditor, and should come via process server and not mail. If CACH has attempted to trick your friend into thinking he has been said, it's a whole new ball game.
 

Bosco

Member
Ziggy still hasn't forgiven me for the many instances where I kicked his butt up and down these forums back when I was fairly active here. No worries though, the people here looking for advice know who to listen to.
 

Zigner

Senior Member, Non-Attorney
Ziggy still hasn't forgiven me for the many instances where I kicked his butt up and down these forums back when I was fairly active here. No worries though, the people here looking for advice know who to listen to.
Ohhh, you sure showed me. :rolleyes:
 

tranquility

Senior Member
That said, I'd have your friend file a counterclaim under Section 805(2)(A) of the FDCPA. If CACH has claimed that WaMu assigned them the debt, that is clearly false. If they've bought the debt, than they are not an assignee period, and I know that WaMu/Chase tend to sell off their debts because I've dealt with them three times.
An "assignment" is the transfer of contractual rights to another. If a debt is said to be "sold", what they are selling is the right to collect the debt. Aka, assignment.
 
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