Portfolio Recovery Associates Sued For Collecting on a Settled Debt

Portfolio Recovery Associates, LLC, or PRA is a huge debt buyer that files thousands of law suits every year to collect debts it has purchased for pennies on the dollar. PRA files hundreds of collection suits here in Arizona.

My office recently filed a case under the Fair Debt Collection Practices Act or FDCPA against PRA for attempting to collect an alleged balance on a judgment which had been settled in full, and which had been set aside by the justice court so there was no longer a judgment.

Collection Abuse Continues Against Arizona Consumers

As this case illustrates, collection abuse by collection agencies, zombie debt buyers, and their collection lawyers continues in spite of federal law prohibiting their actions. The FDCPA prohibits a debt collector --- including collection agencies, zombie debt buyers, and collection attorneys --- from misrepresenting that a debt is owed when it is not. The FDCPA also prohibits a debt collector from attempting to collect amounts not owe, including aksing for payment of a debt which has already been settled. 


National Collegiate Student Loan Trust Loses Arbitration on Statute of Limitations

In a case where National Collegiate Student Loan Trust sued my client in Maricopa County Superior Court to collect on a private student loan, the arbitrator found in favor of the Arizona consumer and dismissed the claim.

Arizona Six-Year Statute of Limitations Applies to Private Student Loans. 

The statute of limitations on a private student loan is the same as any other credit or contract obligation. Thus, if it is a written contract,  signed in Arizona, the statute of limitations is usually six (6) years.

Arizona Four-Year Statute of Limitations Applies to Private Student Loans Incurred Outside of Arizona.

The exception to the six-year statute of limitations is a loan which was entered into in another state other than Arizona. For example, if you signed for the student loan while living in Oregon, then the Arizona four-year statute of limitations should apply.

National Collegiate Student Loan Trust sues Arizona consumers under under several different names, such as NCSLT 2006-1, 2006-3, 2007-2 or NCSLT 2007-4, etc.  

Asset Acceptance LLC Sued Arizona Consumer for Navy Federal Credit Union Account which is Past the Statute of Limitations

Recent client inquiries reflect that Asset Acceptance LLC, a large national debt buyer who claims to have purchased a large portfolio of debts originating with the Navy Federal Credit Union, is suing Arizona debtors on these debts. In a recent case I investigated, it appears that the Navy debt is well beyond the applicable statute of limitations in Arizona for credit card debt which is now 6 years. Calls from other Arizona consumers confirms this may be happening on a regular basis.

Despite the underlying debt being stale (past the statute of limitations), Asset has filed suit using one of its Arizona law firms Fulton, Friedman & Gullace. It is common knowledge that many debt buyers file suit hoping that Arizona debtors will ignore the law suit and the debt buyer will obtain a default (meaning uncontested) judgment. Once the judgment is entered, the claim becomes valid and the debt buyer can garnish wages or bank accounts to collect the debt.

Not only are these stale debts completely defensible, the federal Fair Debt Collection Practices Act (FDCPA) prohibits such actions. Under the FDCPA, an Arizona consumer wrongfully sued by Asset can seek recovery of damages from the illegal lawsuit.

Protect Your Rights. If you are an Arizona consumer who has been sued by Asset Acceptance LLC on a Navy Federal Credit Union account, please contact Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a free phone consultation.

Bartolini Finance Still Filing Suits on Old Debts.

Recently I have been contacted by several Arizona consumers who have been sued by Bartolini Finance, also known as CNAC and J.D. Byrider.  In each instance, the account defaulted over four years prior to the suit being filed.

Arizona Statute of Limitations for Collecting on a Repossession is Four (4) Years.

A.R.S. § 47-2725 requires that Bartolini Finance file its suit to collect the remaining balance on your car loan within four (4) years after the repossession.

In the cases I am seeing right now, the repossession took place nearly six (6) years ago, meaning that Bartolini is too late.  However, if the Arizona debtor does not properly respond to the lawsuit, then Bartolini is able to get a default judgment.  This is obviously what Bartolini is hoping for.

Don’t Let Bartolini Get a Default Judgment Against You!

The large majority of the cases Bartolini Finance has filed have ended up with default judgments.  Many times the interest that has accrued far exceeds the amount of the original debt. 

You must file an appropriate answer with the Court in order to avoid judgment being entered against you.

Hire a Lawyer to Assist You.

If you have been sued by Bartolini Finance, hire the assistance of an attorney.  There are several consumer lawyers in Maricopa County which are capable of defending these Bartolini Finance lawsuits.  The cost of hiring a lawyer is usually much less than the amount of the potential judgment.  Plus, with the damage to your credit file by having a judgment entered, the cost of obtaining legal counsel is usually well worth it.

I would be glad to assist you in reviewing your case to see if you have a valid defense.  Please call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a consultation.

Two More Courts Hold that Statute of Limitations on Credit Cards in Arizona is Three (3) Years.


Arizona Legislature Changes Statute of Limitations on Credit Card Accounts.

The Arizona Legislature recently changed the law to make most credit card collection cases subject to a six year statute of limitations. A.R.S. Sec. 12-548 now states that "if the indebtedness is evidenced by or founded on . . . a credit card. . ." it is subject to the six year statute of limitations.

The following cases will no longer provide the persuasive precedent that we have previously enjoyed.

Recent Cases.

The East Mesa Justice Court in Maricopa County recently followed the holding in the DSS Financial v. Walrod case and dismissed a collection lawsuit brought by a bad-debt buyer, Action Financial, LLC, holding that the statute of limitations on a credit card account is three (3) years. See Action Financial, LLC v. Long, CC2008005084.

The West Mesa Justice Court of Maricopa County also recently held that the debt, which was an old credit card account, was an open account and thus barred by the three (3) year statute of limitations under A.R.S. § 12-543. See Action Financial, LLC v. Foran, CC2008189319.

The holdings in these two cases do not conclusively settle the debate over the statute of limitations on a credit card debt in Arizona. However, as more and more Arizona courts hold that credit card debts are subject to the three (3) year statute of limitations, bad-debt buyers will be less likely to file these stale suits, or at least more likely to dismiss them if challenged.

What to Do If You Have Been Sued on an Old Credit Card Debt?

The worst thing you can do is do nothing. That is what these bad-debt buyers hope you will do – nothing, so that they will get their judgment. Once a judgment is entered, and unless it is set aside by the court, the debt now becomes collectible even if the debt was stale and beyond the statute of limitations, and uncollectible, when the case was filed. So you must do SOMETHING.

The best something is to fight back. You may have one or more defenses to the suit. The debt may be old, such as the cases noted above, or the bad-debt buyer may not be able to prove that it is the current owner of the debt. Other defenses include identify theft, unauthorized use of the credit card, or fraud.

Help For Arizona Consumers is Available.

Many Arizona consumers believe that they cannot afford to hire an attorney to assist them in defending the lawsuit. However, there are several attorneys in the Mesa-Phoenix area who defend consumers in these debt collection cases, and their fees are reasonable, and likely to be a much better alternative than to have an unwarranted judgment entered against you.

Floyd Bybee of the BYBEE LAW CENTER, PLC represents Arizona consumers who have been sued on old credit card accounts.

If you would like a free phone consultation to see if you might have a defense to the lawsuit, please call (480) 756-8822.