SOL defense for Credit Debt?

[TToby]

What is the name of your state? Illinois

I was just served a summons to appear in county court regarding a credit card that I opened almost 10 years ago. I was wondering if someone can suggest what course of action I should take to get the case dismissed based on SOL?
Thanks in advance.

 

[I AM ALWAYS LIABLE]

What is the name of your state? Illinois

I was just served a summons to appear in county court regarding a credit card that I opened almost 10 years ago. I was wondering if someone can suggest what course of action I should take to get the case dismissed based on SOL?
Thanks in advance.

My response:

Illinois has a 6 year SOL on CC Debts, measured from the date of last payment. When was your last payment, of any kind?

IAAL

 

[TToby]

It has been 8 years or more since I made a payment and at least 6 since I've heard from them. I thought that the co-signer had paid it off until I rcv'd the summons.

 

[bigun]

OK, the plot thickens. When did the cosigner last pay the orginal creditor?

 

[TToby]

I don't know for sure, but I don't think he paid anything. They are taking me to court for $1187.00 plus their attourney fees and that seems to be about the amount that they were calling me for some 8 years ago. If he did pay something, that would extend the SOL right? Also, why am I being summoned and not him?

 

[bigun]

They may not know where he is or, they may figure he doesn't have the means to pay and you do.
Find out when he last paid the OC. If it's inside 6 years, we can help with an SOL defense. Who is the CA that filed the lawsuit?

 

[JETX]

The FIRST thing you need to do is to find out when the SOL clock started, which is the last activity date.

To do this, you need to send the attorney a 'validation' letter. A good sample letter can be found at: http://www.creditinfocenter.com/forms/sampleletter9.shtml

Send it NOW, certified RRR.

If the summons requires you to file an answer, then you need to do that within the time allowed..... simply deny any claims being made and ask them to be forced to prove them. Include a copy of your validation letter. At the very least, this should stop any legal process until they have responded to your validation request. And once you have the information from them.... you can plan on any SOL defense.

The debt collector (attorney) cann't take any legal action until the validation is completed. See: FDCPA, Section 809 (b) at: http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#809
and the FTC staff opinion letter (as to continuing activity) at:
http://www.ftc.gov/os/statutes/fdcpa/letters/cass.htm

 

[bigun]

In addition to Jetx's excellent advise, get a copy of each of your credit reports and see if a chargeoff date is listed.

 

[JETX]

I agree as to getting the reports, but I personally feel that the charge-off date is largely irrelevant. There are no specific rules for 'charge-off' dates.... nor are they accurate in determing EXACT SOL dates.
I have seen reported 'charge-off' dates of as little as two months after 'last activity' and as long as 9 months after.

 

[bigun]

I duuno Jetx, FDIC regs do call for chargeoff on revolving debt to occur 180 days after default {with some exceptions}. Counting back 180 days from chargeoffto get the date of first default should give you a pretty good idea of at least a month and year. I would think a credit report with a chargeoff date plus, the FDIC reg would be rather convincing to a judge.
In fact, they {the oc} may extend it by 30 days if they beileve there is a reasonable chance a loan can become preforming. The FDIC calls this re-aging and is allowed.

 

[JETX]

I believe the FDIC has little or nothing to do with enforcement or interpretation of the FCRA.

I refer you to FTC opinion letter (Brinckerhoff-Johnson):
"If a consumer falls behind on an account and never catches up, the delinquency has its "commencement" when the first payment is missed. From that point on, the account is past due and thus delinquent. "
http://www.ftc.gov/os/statutes/fcra/johnson.htm

 

[bigun]

I agree it has nothing to do with the FCRA but, the FDIC does regulate the practices of financial institutions and they reg is specific:

The quality of retail credit is best indicated by the repayment performance of individual borrowers. Therefore, in general, retail credit should be classified based on the following criteria:
• Open- and closed-end retail loans past due 90 cumulative days from the contractual due date should be classified Substandard.
• Closed-end retail loans that become past due 120 cumulative days and open-end retail loans that become past due 180 cumulative days from the contractual due date should be classified Loss and charged off.{2}

{2 For operational purposes, whenever a charge-off is necessary under this policy, it should be taken no later than the end of the month in which the applicable time period elapses. Any full payment received after the 120- or 180-day charge-off threshold, but before month-end charge-off, may be considered in determining whether the charge-off remains appropriate.

I just think it's reasonable to assume the credit card company did follow the law regarding chargeoffs and reported the chargeoff in the approiate manner.

 

[Ladynred]

That may be so - the REPORTING of the charge-off may take 9 months, but by law (FDIC), the account HAS to be charged-off at 180 days of non-payment - 120 for written contracts. Add to that the 30-days of 'wiggle room' they get on top of that 120/180 days and anything more is flat out wrong, inaccurate, or deliberately re-aged. As for charge-offs BEFORE 120 days, that's up to the creditor to decide whether or not they think there's any chance of being paid.

Charge-off date may not be accurate for determining EXACT SOL dates, but neither are the DOLA's that are reported either. Then you have to know whether the SOL starts with the last payment/activity or first date of continuous delinquency.

Seems to me a combination of the charge-off date, DOLA and come-off date is required to at least determine where the start/finish of the SOL lies. Add to that that too many CA's won't validate and sure as heck won't provide you with any dates other than what's in their typically inaccurate records.. and you're stuck waiting for an EXACT date that you may NEVER get.

 

[JETX]

"That may be so - the REPORTING of the charge-off may take 9 months, but by law (FDIC), the account HAS to be charged-off at 180 days of non-payment - 120 for written contracts."
*** Sorry, but that is not true. As noted in Bigun's post before yours. Per the FDIC, "For operational purposes, whenever a charge-off is necessary under this policy, it should be taken no later than the end of the month in which the applicable time period elapses. Any full payment received after the 120- or 180-day charge-off threshold, but before month-end charge-off, may be considered in determining whether the charge-off remains appropriate."

The above says that this is for OPERATIONAL purposes. Further it says it SHOULD be taken "NO LATER than...." not that the "account HAS to be charged-off at 180 days" as you state.

It appears that both of you are taking the information applicable to one thing (FDIC operation of a financial institution) and assuming that it applies to another (FCRA). The government is full of contradictory rules, especially inter-agency ones. Personally, I feel the BEST rule to follow when applying the FCRA (or FDCPA, etc) is the governing body.... in this case, the FTC.

I also refer you to another FTC staff letter (Brindkerhoff-Amason) on this same subject, at:
http://www.ftc.gov/os/statutes/fcra/amason.htm

As a sidenote:
I had noticed a few weeks ago that this FDIC rule had somehow gotten involved in the issue of SOL dates, but really didn't take issue with it until now.
Heck, and while we are on this topic of discussion... the FTC allows a debt to be reported by a CRA for a period of 7 years PLUS 180 days (to allow for the return to the APPROXIMATE DOLA). This is shown in the same FTC staff letter referenced above.

 

[bigun]

Unless a debtor has in his possession a letter from the OC stating that on a particular date an account will be chargedoff you'll never know for certain the exact date a chargeoff occured. But, I think subtracting 180 days from chargeoff and quoting the FDIC regs will sure force the ca lawyer to prove otherwise. I know up until a couple of years ago, MBNA and, BOA chargedoff stuff at 150 days but now, everyone trys to put it off to the last possible day-per FDIC regs. I mean, if you claim the last time you paid was 180 days prior to chargeoff the CA lawyer will need to get someone from the OC to testify that they had another policy in force at the time that provided for a shorter time period.