SOL & Case Law

[Ladynred]

The reason you find no case law is because MOST of these types of cases are brought in small claims court which is NOT a court of record.

However, there are plenty of judges across the nation who DO NOT rule that credit cards are written contracts and DO agree with the shorter SOL for open-ended agreements.

Look to the FDIC rules and regs for the definition of a written contract - a credit card doesn't fit the definition at all.

The TILA definition says the following:

(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.

Sounds like the description of a credit card to me.. doesn't it ??

Have you tried asking the collection agency for PROOF of this debt ?? Have you demanded VALIDATION ?? With a debt that old, there's very little chance they can produce much in the way of VALID PROOF on an out-of-statute debt. You need to use that too.

Your wife has to show up to use the affirmative defense of the SOL, so USE IT. If you don't, you absolutely LOSE it. Take along a copy of the TILA to court, it HAS worked for many people in cases like this.

In addition, go over to www.creditinfocenter.com and contact the admin there, she lives in AZ so she is pretty familiar with AZ law and this whole process.

 

[Debt Guy]

Lady is a very sharp cookie. I think she is wrong -- we just see this differently.

Regardless, I don't wish anything bad for you. I hope this works out for you.

I would like to ask a favor. Please let me know how this works out. I get asked this question a lot and would like to be able to share your experience with others.

 

[PhxGuy520]

Lady is a very sharp cookie. I think she is wrong -- we just see this differently.

Regardless, I don't wish anything bad for you. I hope this works out for you.

I would like to ask a favor. Please let me know how this works out. I get asked this question a lot and would like to be able to share your experience with others.

Thanks for the response and I will update you after she goes to court. We just submitted the "answer" document and we are waiting to hear back. I was wondering it is within the law to write a document asking the judge to dismiss the case based on the SOL or do we have to wait to go to court? Could I write one to the CA? I am worried about to much contact with the CA in fear of losing the SOL defense. I read it does not take much contact to lose that.

 

[PhxGuy520]

The reason you find no case law is because MOST of these types of cases are brought in small claims court which is NOT a court of record.

However, there are plenty of judges across the nation who DO NOT rule that credit cards are written contracts and DO agree with the shorter SOL for open-ended agreements.

Look to the FDIC rules and regs for the definition of a written contract - a credit card doesn't fit the definition at all.

The TILA definition says the following:



Sounds like the description of a credit card to me.. doesn't it ??

Have you tried asking the collection agency for PROOF of this debt ?? Have you demanded VALIDATION ?? With a debt that old, there's very little chance they can produce much in the way of VALID PROOF on an out-of-statute debt. You need to use that too.

Your wife has to show up to use the affirmative defense of the SOL, so USE IT. If you don't, you absolutely LOSE it. Take along a copy of the TILA to court, it HAS worked for many people in cases like this.

In addition, go over to www.creditinfocenter.com and contact the admin there, she lives in AZ so she is pretty familiar with AZ law and this whole process.

Thanks for the reply. I did find that site, and the admin stated that ALL credit cards are considered open accounts. Another question...She received the summons in the middle of moving, and we almost forgot about the 20 days. We wrote up an answer based on some template we found on the internet. We thought honesty would be best so we stated the the debt was hers, but used the defense of SOL. Is it too late to ask them to validate the debt. I would assume they would use her answer to validate it? Any other suggestions?

 

[Debt Guy]

Q. We just submitted the "answer" document and we are waiting to hear back. I was wondering it is within the law to write a document asking the judge to dismiss the case based on the SOL or do we have to wait to go to court?

A. I am a little confused. There may be something unique in AZ -- but, generally if you are being sued in small claims court -- you just go. The whole purpose of small claims is to keep in simple and thus "answers" are not usually even permitted. Conversely, in state court (or may be called county court or superior court), the process is formal and "answers, motions, etc." are required in a specified written format. Since I don't know what type of court you are in and what "answer document" you filed, I don't know how to answer the question.

As a general rule, in state court you must raise all your defenses in your answer. So, in that case your answer would assert that the debt is time-barred and cite the statute that says it is time barred. You must serve a copy of the answer on the plaintiff.

LNR referred you to someone in AZ who was knowledgable -- you even said they told you that all credit cards are open accounts. I suggest you go back to that person and ask them about your answer and how this issue should be handled since they know all about AZ.

Q. Could I write one to the CA?

A. In my opinion - No. You are in court. Your defenses are raised with the court in the proper format as an answer. As described above, a copy of your answer must be served on the plaintiff.

Q. I am worried about to much contact with the CA in fear of losing the SOL defense. I read it does not take much contact to lose that.

A. That is the problem with what you read on the internet -- 90% is complete crap -- but there is always a sliver of truth.

Having contact with the CA would not cause you to lose the SOL. That said, in many states you can lose the SOL by making a payment of any amount -- that is why so many collectors will ask for payment of $5 "just to show your good faith". There are states that will also restart the SOL if you admit to the debt. So, just don't put anything in writing that says "I know I owe this but, blah , blah, blah." There are even one or two states where you can restart the SOL by a verbal confession of the debt (some southern state -- SC or AR I think).

Q. We wrote up an answer based on some template we found on the internet. We thought honesty would be best so we stated the the debt was hers, but used the defense of SOL.

A. In your situation, I think honesty is the best policy. People tend to get tripped up in exercise of weaving webs of lies.

Q. Is it too late to ask them to validate the debt.

A. Yes. The lawsuit has been filed. Validation is moot at this point. Even if there was no lawsuit, they would not be required to reply to the request except in a narrow situation.

Q. I would assume they would use her answer to validate it?

A. Most likely, they would just ignore the request. Or, perhaps use the validation request to make you look dumb in front of the judge. The purpose of validation is to make sure they are collecting from the right person. Your answer admitted to the debt. "Your Honor, what sort of person admits the debt is theirs and then in another document says the debt is not theirs? Obviously, you cannot assume the defendant is acting in good faith and I therefore move for sum**** judgment for the plaintiff." That argument probably would not work but would just make you look you are grasping at straws to weasel out of the debt. Judges have a lot of discretion and you don't want the judge to start off thinking you are less than completely honest. If an issue arises where the judge could go either way -- less than honest loses every time. (by the way, all that preceding is my opinion and based on my experience sitting in court watching the behavior of judges who handle these type cases -- so if someone comes along and says I am a complete idiot and have no idea what I am talking about -- well, full disclosure has been made -- you take it as the same 90% crap you see on the internet if you wish).

Again, I wish you the best of luck. I think your best resource is your AZ credit expert.

Let me know what happens.

 

[PhxGuy520]

Q. We just submitted the "answer" document and we are waiting to hear back. I was wondering it is within the law to write a document asking the judge to dismiss the case based on the SOL or do we have to wait to go to court?

A. I am a little confused. There may be something unique in AZ -- but, generally if you are being sued in small claims court -- you just go. The whole purpose of small claims is to keep in simple and thus "answers" are not usually even permitted. Conversely, in state court (or may be called county court or superior court), the process is formal and "answers, motions, etc." are required in a specified written format. Since I don't know what type of court you are in and what "answer document" you filed, I don't know how to answer the question.

As a general rule, in state court you must raise all your defenses in your answer. So, in that case your answer would assert that the debt is time-barred and cite the statute that says it is time barred. You must serve a copy of the answer on the plaintiff.

LNR referred you to someone in AZ who was knowledgable -- you even said they told you that all credit cards are open accounts. I suggest you go back to that person and ask them about your answer and how this issue should be handled since they know all about AZ.

Q. Could I write one to the CA?

A. In my opinion - No. You are in court. Your defenses are raised with the court in the proper format as an answer. As described above, a copy of your answer must be served on the plaintiff.

Q. I am worried about to much contact with the CA in fear of losing the SOL defense. I read it does not take much contact to lose that.

A. That is the problem with what you read on the internet -- 90% is complete crap -- but there is always a sliver of truth.

Having contact with the CA would not cause you to lose the SOL. That said, in many states you can lose the SOL by making a payment of any amount -- that is why so many collectors will ask for payment of $5 "just to show your good faith". There are states that will also restart the SOL if you admit to the debt. So, just don't put anything in writing that says "I know I owe this but, blah , blah, blah." There are even one or two states where you can restart the SOL by a verbal confession of the debt (some southern state -- SC or AR I think).

Q. We wrote up an answer based on some template we found on the internet. We thought honesty would be best so we stated the the debt was hers, but used the defense of SOL.

A. In your situation, I think honesty is the best policy. People tend to get tripped up in exercise of weaving webs of lies.

Q. Is it too late to ask them to validate the debt.

A. Yes. The lawsuit has been filed. Validation is moot at this point. Even if there was no lawsuit, they would not be required to reply to the request except in a narrow situation.

Q. I would assume they would use her answer to validate it?

A. Most likely, they would just ignore the request. Or, perhaps use the validation request to make you look dumb in front of the judge. The purpose of validation is to make sure they are collecting from the right person. Your answer admitted to the debt. "Your Honor, what sort of person admits the debt is theirs and then in another document says the debt is not theirs? Obviously, you cannot assume the defendant is acting in good faith and I therefore move for sum**** judgment for the plaintiff." That argument probably would not work but would just make you look you are grasping at straws to weasel out of the debt. Judges have a lot of discretion and you don't want the judge to start off thinking you are less than completely honest. If an issue arises where the judge could go either way -- less than honest loses every time. (by the way, all that preceding is my opinion and based on my experience sitting in court watching the behavior of judges who handle these type cases -- so if someone comes along and says I am a complete idiot and have no idea what I am talking about -- well, full disclosure has been made -- you take it as the same 90% crap you see on the internet if you wish).

Again, I wish you the best of luck. I think your best resource is your AZ credit expert.

Let me know what happens.

So she has about 4 CC she owes on and with all the lawyer fees and interest over the last 4 years they total about 20,000. So I think that is why we are not in small claims court. I believe she will be going to superiour court. According to the summons she had 20 days to submit an "answer" she basically just answered the statements on the summons and listed a defense of SOL (per the template we found). If the judge does rule against her then she will have to look into bankruptcy. I was hoping she could avoid that since I am told the debt should not longer appear on her report after 7 years.

 

[Debt Guy]

I don't know what the template said -- it may or may not be right for your situation. Even if I saw it, I would not know if it was right for AZ.

Again, I recommend you contact LNR's AZ expert and see what they say. If the template is wrong, you might be able to amend it.