What do I do about collection agency filing law suit over over credit card debt.?

Question

I was given 10 days to respond to the petition. They are asking for 1500.00, I believe this is an old credit card that went to collection that the available limit was about 500. I need to write a responce but I do not know what to write or if I should get an attorney, an attorney will probably cost me more than the judgement. I am in Texas.

I have recieved a copy of the petition filed by Palisades, assignee of HSBC. They have filed a request for judgement with the county clerk office. I need to provide a written answer to them. I do not have the 1500 to pay them off and I am not sure if it is worth hiring an attorney. I really just need to know what I should write because if I do not respond they will be awarded the judgment.

If you go into a payment agreement with Palisades can they still file the judgement and place it on your credit report?

Yes I guess this is a citation. It says that if I or attorney do not file a written answer with the clerk who issued this citation by 10 am on the Monday next following the expiration of ten days after you were served this citation, a default judgment may be taken against you. It was left on my door on on the 27th. What should I write in my response, I think an attorney will cost me more. I did contact them and they said they would only do a payment agreement after I paid them $200.00. I assume by check so that they could get my bank account number. I am not sure about the account, according to the paperwork it was defaulted on less than 4 years ago. It is not that I do not think I should pay but this is 3 times what I may have owed.

I forgot to add that when I called on Friday and was told that I could pay 200 down and a payment agreement would be mailed to me, I told the lady that I would have to think about it because I did not want to give them 200 and then have no agreement and then be sued anyway as I would have nothing in writing. She told me that if I did not call back by the end of the business day, it would show that I had no intentions of paying the debt.

Tha nks to everyone for thier feedback. The first page is the plaintiffs original petition. 1. Plaintiff requests discovery be conducted at level 1 (TRCP 190.2) Then it goes on to say that they extended credit and the defendent used or derived benefit from the credit accout. Exhibit A represents the summary of transations of which a sytematic record was kept. Then if you look at what Exhibit A is, it is a computer screen print off with my name, address, account number, date defaulted, and a dollar amount-1521. It does not show any detailed record of anything.
2. It says that defendatn'st fauilure to honor payment obligations created a balance due and owing to plaintiff as shown in Exhibit A. Despite demands, payment has not been forthcoming. All conditions precedent have been performed. 3. the breach of defendant led plaintiff to employ undersigned law firm to file suitnecessitation a reasonable fee for attorney services.

Prayer: it is asking for judgement 1521 +

Again Thanks for all the advice.

I want to file a written response but I have yet to hear what I should write. Can anyone give me some clear directives or advise. I guess I need something more specific, please?

Answer 1

I want to start by telling Echo....GEEZ! Leave something for me to answer! You got it all covered!

Whatever you do...DO NOT send them any money or even admit to owing this. Their demand to get $200 up front is class collection agent nonsense designed to reset the SOL! . Send the attorney a letter offering your proposed settlement, and tell them if they agree to send you a settlement letter. Once you both have agreed to a payment plan, they can simply drop the lawsuit.

And for the first time in my very long history here...you have receive a lot of terrific advice. I greatly enjoyed reading Civpro's response to this, and hope that he becomes a regular contributor here with his advice.

But I must take issue with one comment he made about how lawyers do not "knowingly" file lawsuits if they the SOL has expired. For starters, they will file any lawsuit that their client instructs them to do....and very rarely will they tell the lawyer the SOL has expired. And the lawyer is not going to investigate this first, they will simply take the case and file it.

There are law firms/collection agencies that specialize in purchasing old, noncollectable debts, and file lawsuits on them. Why would the do this? Because the majority of the public do not understand the SOL laws, and don't know that they must offer an affirmative defense in order to take advantage of this. So these lawyers will gamble and file the lawsuit hoping to a default judgment.

Yes it happens....I know of a local agency that just purchased a huge portfolio of old debts from hospitals in this area. Nearly all of these are beyond 6 years old. Why would they spend money buying old, noncollectable debts? Just read the above paragraph.

There are lawyers, and there are "collection attorneys". I am very happy you are a lawyer, and thank you for your excellent response to this question.

Answer 2

By law you should have 20 days to respond to the summons after receiving it. If that summons only gives you 10 days, you might want to speak to an attorney.

Be sure that they have actually filed a suit, contact the court clerk and ask if there is a suit filed in your name. (collectors are known to make things "look" like they have filed when they actually haven't)

Check any info you have on the account, your credit reports, old statements, etc, to see when you defaulted on the card.
In Texas the collecting SOL is 4 years and it starts from your last payment or charge on the account before it was charged off.
If it has been 4 years or longer since you defaulted you need to include an affirmative defense of SOL in your answer.
If it has been 4 years or longer and you include the SOL defense, the case will probably be dismissed.

If it is past the collecting SOL you have a legal right to file a counterclaim for them filing suit on a time barred debt. (plus Tx. has their own version of the FDCPA with which you may be able to file other counters as well)

Whether you are past the collecting SOL or not you need to file an answer or they will get an automatic judgment.

Many lawyers will give a free first consult to see where you stand. Contact a few and ask them about the free first consult, when you find one you might make an appointment.
Be sure the lawyers you contact are versed in consumer credit laws or they will be no real use to you.

Take every bit of paper that pertains to the debt to the lawyer, including the summons, any letters from the collector or their lawyer and any credit report that the debt is listed on, etc.
If the collector or their lawyer committed any violations, the lawyer you speak to "may" take the case on a contingency basis. Where the collector would pay the lawyer fees if you win. If you lose you will be responsible for the lawyers fee.

In the mean time you might click on my profile and do some reading in the links I've provided, especially in the last link listed to a free credit discussion board

edit+++++++
For the response CivPro1 gave - Yes, SOL "can" (and should) be an issue if the debt has been 4+ years since she defaulted, regardless if she admitted on "here" that it is hers and didn't pay. There is nothing in her post to go on for the length of time since she defaulted except for the statement that it is "old". I don't see how you can automatically make the assumption that she is still within SOL by her simply saying it is old.
IF she is past SOL she can and should use a SOL defense.
Also, they sent her a summons NOT a Discovery. Answering a summons and answering a Discovery are two different animals and that answer could possibly confuse her.

And for Sgt. Big Red - wrong statute. You cited the FDCPA for debt validation/verification and not the Texas statute for the time limit to answer a summons - which is 20 days (for which she is being violated by the short 10 day period)

++++++
If you make an agreement with them it should be in writing. Be sure to take a copy of the agreement to the court clerk and request that it be placed in your case file. If "you" fail to have it filed, the chances are good that the collector won't file it.
If it is not filed the collector may go ahead and try to get a default judgment on you. If the judge knows nothing about your pretrial agreement and you have not filed it and you are not there, the judge will give them the default judgment.

"Never" trust collectors to do the right thing.

Texas does not allow wage garnishment. Texas also has excellent exemptions on property where the most that they may be able to do if they receive a judgment is place a lien on your home/car and get paid if/when you sell.
But it will trash your credit, so fight the best you can

Answer 3

After reading the above answers and your question, I will try to answer as well as I can.

First it will do no good to contact the original creditor. Palisades is a debt buyer, HSBC no doubt assigned the debt to them for value. HSBC has no rights to this debt any longer. Any debt can be assigned, so dont listen to people who will tell you that you dont have a contract with Palisades or something like that. In fact, almost all debt in one way or another is assigned and every credit card terms and conditions allows for assignment without notification.

The four year SOL is correct, but that is not often an issue. Above you admit it is your credit card and you didnt pay it. My guess is that you did use it or make the last payment within four years.

+++++ I will add this in comment to what echo wrote.

The reason why the SOL is normally not an issue in a suit is that an attorney has reviewed the suit before filing. No attorney wants to make a practice filing after the SOL has tolled, mistakes are made but typically the date of last payment or charge is readily available and to add four years (or the appropriate SOL) is not difficult to do. While some non-attorney collection agencies admittedly may try to collect on debt outside the SOL, very few attorneys will file suits knowingly outside the SOL.

As far as a petition vs. Discovery, I can only assume in discovery you are referring to a request for admissions. What a petition states is a brief statement of facts and a prayer for relief. In an answer, you either admit or deny the facts in the petition, then add affirmative defenses or counterclaims (which the Plaintiff will then admit/deny the allegations in the counterclaim and raise affirmative defenses and such in their answer to the counterclaim). Discovery in most places comes in three forms. A request for admissions, which often mirrors the allegations in a petition. On those you simply need to admit or deny. Then there are interrogatories. These are questions more open and typically require more than a one word answer. The last most common form of discovery is a request for production of documents and/or things. This would be a request for documents and supporting evidence.

Also as far as the ten days goes, that seems terribly short. Most states allow at least 20 days, but the time would start from the date you are served, so if Texas requires you to file an answer within 20 days and you were served 10 days ago, then yes, your answer would be due in 10. But if you were just served, sounds like someone was pressuring the wrong way.

++++++

As far as having to be in the same state? No, Palisades hires attorney's in virtually every state to collect for them. My guess is that a Texas law firm is handling this for Palisades.

The best way to answer a petition is to simply admit or deny each allegation. Without seeing the petition, my guess is there are numbered paragraphs. A first one might read something like "1. Defendant is a resident of Texas." Sound like that is true so your answer would be "1. Defendant admits the allegation in Plaintiff's paragraph one." And then go down the list. You have to answer honestly, but if you disagree with something they allege, you can simply answer "#. Defendant denies the allegation in Plaintiff's paragraph #." After answering the petition, you would want to list any affirmative defenses with some paticularity.

Make sure you send a copy to the attorney and to the Court of any thing you file.

But you owe the money? Most debt collector are willing to enter into a Consent Judgment with a payment plan. Most simply want the debt paid, plus any costs, paid within two years. My guess is if you offer to pay the Court cost and 1/24th of the full amount due as the first payment and then 23 equal payments after that, they will accept it and it will be over. They would simply have the judgment to execute against if you fail to make the payments.

Hope that answers your questions.

Answer 4

If it's credit card debt that as exceeded the statute of limitations or has exhorbant collection fees (and these ARE limited by law) then a judge will whittle that WAY down from $1500. If it is over 5 years old, then you need to go to court.

You need to call the CLERK'S office and find out if you can show up to protest the judgement...you don't need an attorney, you can represent yourself.

Remember that a collection agency is NOT your friend and will try to collect money that you don't even owe.

If you choose to deal with them directly (and I don't recommend that you do), then do NOT send them ANY money until they send you in WRITING a payment plan and what they will offer you if you stick to it (a reduction in what is owed, removal from your credit report, etc).

PS: 1 Hr Bookee needs to stick with bets...collection agencies are not required by law to report things to credit reports (and it doesn't mean they are a scam), and you absolutely can sue someone in another state for a debt.

Answer 5

First of all, you are allowed 30 days by law to respond, not 10 days. Read the USC below regarding this.

Respond to the petition by sending a certified/retrun receipt letter requesting "verification of debt", (a copy is available at the yahoo group link listed below) they will then have to respond. Here is the law regarding the petition you recieved and what they are to include in the petition.

15 U.S.C. § 1692g. Validation of debts
(a) Notice of debt; contents
Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice
containing--
(1) the amount of the debt;(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
(b) Disputed debts
If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section 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 a 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.
(c) Admission of liability
The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.

I have also included a link to read more about Palisades.
I invite you to join the following Yahoo group "DontGetRippedOff" dedicated to helping those in financial trouble, Here you will find information to help you with debt collection agencies.
http://finance.groups.yahoo.com/group/dontgetrippedoff/

Answer 6

First, go on line and read the Fair Debt Collection Act. This will give you time lines on responses, what creditor can and can not do. It will also explain what you can do to respond to the creditor.
A $500 cc can quickly become $1,500 by late charges, interest, fees and court cost.
Be careful of a half settlement. The unpaid or forgiven amount becomse taxable income and will be reported to both you and the IRS on a form 1099.

Answer 7

The only thing you didn't understand was the term "unsecured debt"! Just cause you bought clothes or household furnishings with this card, doesn't mean they can't collect or sue you for the money. You left them a trail to follow. Most deadbeats aren't as easy to find as you were. You didn't change your bank account, you didn't change your job, you probably didn't move cause you got their mail and ignored it. Hey, you were a sitting duck. You didn't go to court to fight this - if you had the court would have taken your expenses into consideration for the judgment, and you would have had the opportunity to ask for a decent settlement. They got a judgment against you and can collect from any assets that they can find, don't be surprised if your checking account didn't have enough to satisfy the court order, they'll come after your car.

Answer 8

They can't sue you unless they are located in the same state. The whole lawsuit thing is a bluff. You can tell them to never call you again, only to contact you through mail and they have to comply. If they don't, you can sue them for harassment.

Also, if they are a real collection agency, they will work out a settlement with you for 60-70% of what you owe. But pull your credit report first. If they are not on your credit report, they are a scam.

Hope this helps.

Answer 9

Echo is absolutely correct. She is very knowledgable and dedicated to giving accurate information. Follow her advice and check out her profile for the links she has provided. She has my thumbs up!

Answer 10

Contact the original creditor. If you set up a payment plan, they should stop the judgement.