Statement of Defense/settlement?

[74transporter]

What is the name of your state? Kentucky

I was served a civil summons on 5/10/04 for a debt. Asset Acceptance LLC is bringing suit for "$648.09 together with interest thereon at the annual rate of 8% from May 29 2003, until the date of Judgement, then at 12% per annum on the judgement until satisfied...costs expended herein...and and all other relief to which the Plaintiff may appear entiltled."
It was a credit card -DOLA (last payment) is 11/95 ..."$253.39 representing the principal and $394.70 representing accrued interest to date."

I must file a Statement of Defense to my local clerk's office within 20 days of the summons, which I will do. The wording of this doc is in question.

A lawyer advised that Asset Acceptance buys old debts for pennies on the dollar and that an offer to settle with a payment of $350-$500 might be accepted.

My question(s): Should I informally contact the lawyer that filed the complaint and make the settlement offer, or should I include the settlement offer in the Statement of Defense?

I wish to prevent the next steps of litigation - there is no need for discovery or trial. I do have a tax return coming and could pay the $350-$500 in full, but wage garnishment would probably result in loss of employment or housing and must be prevented.

I'm wondering how I can not dispute the debt (it is legit) but get out of paying "$648.09 together with interest thereon...." .

Do you think they'd settle?
Thanks for any and all help.

 

[bigun]

Credit cards are open accounts. Your defense should be the SOL has expired.

http://www.locate123.com/StateLaws.asp#Kentucky

Here's s site that can explain an SOL defense.

http://community-2.webtv.net/YCHANGE/STORAGE/page2.html

 

[JETX]

"My question(s): Should I informally contact the lawyer that filed the complaint and make the settlement offer, or should I include the settlement offer in the Statement of Defense?"
*** No. This is a scam suit.... intended to catch those that are not 'debt smart' and realize that this debt is simply unenforceable. Your post says that the last date of activity (DOLA) on the account was 11/95. The SOL (Statute of Limitations) in your state on a credit card debt (open account) is five years. This means that the debt is DOA since the suit was not filed BEFORE 11/2000!!

Simply, respond to the lawsuit with the SOL as your defense. Bigun has provided some very good links as to how to do this.... and it should be fairly simple.

Go for it.... sounds like you will have them on the run.

 

[Ladynred]

ASS-et is notorious for suing on out-of-statute debts. They rely on people not knowing their rights or the laws. When people fail to answer or fail to go to court ASS-et wins by default. Some research has shown that in those cases where the victim defended themselves and went to court or used the appropriate laws, ASS-et loses. Those they win, and there are far too many, are those where people have rolled over and let ASS-et walk all over their rights or were scared enough to fork over money on a debt ASSet was not entitled to payment for !

A woman on another board faced ASS-et in court last week on an SOL debt, and she won - hands down !

 

[74transporter]

Kentucky...

Forgive me for posting the entire (snipped) statute, but I wonder if a credit card, since you actually sign the agreement when you get it, falls into another realm...making it a "written contract" with a 15yr SOL in Ky...KRS 413.090: http://www.lrc.state.ky.us/KRS/413-00/090.PDF

Since I signed an agreement to get the CC in the first place, does that make it a "Written Contract" and not an "Open Account"?

Thanks for any help...


http://lloydmc.com/articles/ky_collection_law_review.shtml states:

XII. LIMITATION OF ACTIONS
A. Open account.

Open account debts in Kentucky are subject to a five year statute of limitation pursuant to K.R.S. 413.120.


KRS 413.120 states:
http://www.lrc.state.ky.us/KRS/413-00/120.PDF
413.120 Actions to be brought within five years.
The following actions shall be commenced within five (5) years after the cause of action
accrued:
(1) An action upon a contract not in writing, express or implied.
(2) An action upon a liability created by statute, when no other time is fixed by the
statute creating the liability.
(3) An action for a penalty or forfeiture when no time is fixed by the statute prescribing
it.
(4) An action for trespass <snip>.
(5) An action for the profits <snip>
(6) An action for an injury by a trustee to the rights of a beneficiary of a trust.
(7) An action for an injury <snip>
(8) An action upon a bill of exchange, check, draft or order, or any endorsement
thereof, or upon a promissory note, placed upon the footing of a bill of exchange.
(9) An action to enforce the liability of a steamboat <snip>

(10) An action upon a merchant's account <snip>
(11) An action upon an account concerning the trade of merchandise, between merchant
and merchant or their agents.
(12) An action for relief or damages on the ground of fraud or mistake.
(13) An action to enforce the liability of bail.
(14) An action for personal injuries <snip>

Effective: July 15, 1998

 

[JETX]

"but I wonder if a credit card, since you actually sign the agreement when you get it, falls into another realm...making it a "written contract" with a 15yr SOL in Ky"
*** No, it doesn't. A credit card account, by FEDERAL law (Truth in Lending), is an 'open account'.

15 USC 1602:
"(i) The term ''open end credit plan'' means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time."
Source: http://www4.law.cornell.edu/uscode/15/1602.html

And though your assumption that Kentucky laws classify credit cards as written contracts (which is NOT correct), even if it were the FEDERAL law will always 'trump' state law!!

 

[bigun]

CC's are open accounts. Jetx does a great job explaining it in the following thread and I post a link to a Federal Court case where the judge makes the same determination.

https://forum.freeadvice.com/showthread.php?t=180055&highlight=bigun

 

[74transporter]

Thanks for the responses.

Not to split hairs, but in Sec 1602 http://www4.law.cornell.edu/uscode/15/1602.html
The terms "open end credit plan" (i) and "credit card" (k) have two seprarate definitions.

If a credit card is an open end credit plan, then why are they defined separately?

Could this be used to negate the argument that a "credit card" IS an "open end credit plan"?

I do notice that the "credit card" definition does seem to be one of the function of the device itself and not what agreement it connects to.

I'll be speaking to a lawyer later today.

 

[JETX]

"I'll be speaking to a lawyer later today."
*** Good.

 

[74transporter]

Yeah, the question this boils down to is whether or not a credit card agreement is a "Written Contract" when it comes to Kentucky state law.

The reason Ky state law is at issue is because the SOL is defined by the state, not by the TILA.
The definition of a credit card as an "open ended account" is set by TILA. Ky law does not use the language of "Closed-end Credit Transactions" or "Open-end Credit Transactions" and I would argue that very few state laws do.

If I can find that Ky says that a credit card is NOT a "Written Contract", then I have a case.
If not, I risk wage garnishment, attorney's fees, etc in fighting it.

5 year SOL: http://www.lrc.state.ky.us/KRS/413-00/120.PDF
(1) An action upon a contract not in writing, express or implied.

15 year SOL: http://www.lrc.state.ky.us/KRS/413-00/090.PDF
(2) An action upon a recognizance, bond or written contract.

This is the question I will pose to the lawyer, but it won't be until Wednesday, 5/19/2004 .

 

[JETX]

Great. And when your attorney agrees with us, I am sure you will let us know, right??

 

[74transporter]

Oh, absolutely. I'll have a freekin party!

If he does and agrees to take the case, then he stands to gain all his costs from ASSet Acceptance, so the motivation may be there...

We'll see.
Either way, I'll let you know.

 

[Ladynred]

Sadly, far too many lawyers believe that credit cards are written contracts

Take the reference to the FEDERAL TILA that JetX posted and let the lawyer read it if he says 'written contract'. It won't be the first time a consumer has to educate a lawyer (or a judge) in this particular argument. Many have done so, and subsequently won hands down. ASS-et just LOVES to mouth off that credit cards are written contracts - and they have lost too.

Good Luck !

 

[74transporter]

Well, when I spoke to my Lawyer and I said in Ky the SOL on a "written contract" is 15 years, he didn't really buy it in relation to a credit card.

So yeah, somehow a cc debt would fall in the 'non-written contract' area of Ky law, but he advised me that probably the best thing to do is to settle with them.

What he did do is (1) call the plaintiff lawyer and loosely negotiate the settlement. The debt had increased to around $800...since the complaint was filed on Aug 15, 2003 and summons was not served until May 10, 2004...thanks to Sheriff Stumblefock...I'm trying to get them to take $350.00.
(2) draft the "answer" for me and file copies with the courthouse and the plaintiff. (3) put my mind at ease about the whole thing.

The answer basically states (1) that I dispute the amount of the debt, (2)that the debt is time-barred because of the statute of limitations, (3)that I am in negotiations with the plaintiff to have the issue resolved and (4) that I respectfully request that judgement be granted in my favor.
I'll post the actual answer letter tomorrow.

Thanks to you guys.

You're right - I'm just too lazy and poor to fight these guys.