Help, please! Daughter being sued and she just keeps freaking out.

[sharpie]

My daughter is being sued by a junk debt buyer, Harvest Credit Management) in Farmington Hills MI. 

She had a Citi Visa in college (10 years ago) that I was joint on.  I paid it off, probably twice.  The reason for paying it twice was because I had no proof that I paid it the first time, so just paid it again when Citi started hounded us.  If I remember correctly, the balance was originally around 1500.00, they are suing her for 6000.00

This debt showed as PIF on her credit report last year when she bought a house.

It has showed "Settled for Less Than Full"  (or something along that line) on my credit report, years ago.

We have absolutely NO paperwork on this.  She has one letter from the junk debt buyer a year ago, and she called them, they were rude, and she never talked to them again.

I no longer bank where I banked then, and don't even remember by what manner I would have paid it.

She is excellent in managing her money, and has exellent credit.

Just FYI, this is not "Mommy handling the problems" -  This is a credit card she had in college and I used it and paid it.  She then graduated, moved out of the country for a number of years, came back, is going to grad school, just bought a house.

I have NO idea what to do and she is just freaking out about the whole thing.

Any suggestions? 

(I do know she needs to answer the summons or they will win by default)

[BrandonSS]

If this is from 10 years ago this is an easy case. 

http://law.findlaw.com/state-laws/civil-statute-of-limitations/michigan/

As you can see it is well beyond the SOL.  Simply appear in court and file your/her defense as beyond SOL and the case should be thrown out.

[RobertEG]

How is she "being sued?"  Have papers been served on her, or is it just a verbal threat?

As Brandon has said, the merits of the case wont even be an issue should she go to court.  Just provide proof of expiration of SOL in court, and she will be graqnted an affirmative judgment.

Once you know the date from which your state SOL runs, and its period, then all you need to provide is proof of that date.  The best source of such proof are original account records from the OC.  If she does not have those records in her files, she shoulld contact the OC and try to get a copy of her account record with them.

[sharpie]

Ok, so this line in the Michigan statute of limitations:

Collection of Debt on Account 6 yrs. §600.5813

means that after the debt is 6 years old it cannot be collected on?  (I doubt that)

Or it means that she cannot be SUED for it in a court of law?

I found a letter from an attorney dated 2003 regarding this account.  That means it has to be at least 7 years old, and obviously older if an attorney had it in 2003.

Is my thinking correct?

If not, what is?

Thanks!

[BrandonSS]

The can attempt to collect forever, and they can sue if they want to, however they cannot win beyond the SOL. (for lack of better explanation)

Is the original account still showing on her credit report?  If so, there would be a date of first delinquency that would be used to determine the SOL

[sharpie]

She was served a court summons today.

There is no court date, just the initial paper that says to respond.

We have NOTHING on this, other than a letter from an attorney in 2003 which I just found.

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@RobertEG wrote:

How is she "being sued?"  Have papers been served on her, or is it just a verbal threat?

As Brandon has said, the merits of the case wont even be an issue should she go to court.  Just provide proof of expiration of SOL in court, and she will be graqnted an affirmative judgment.

Once you know the date from which your state SOL runs, and its period, then all you need to provide is proof of that date.  The best source of such proof are original account records from the OC.  If she does not have those records in her files, she shoulld contact the OC and try to get a copy of her account record with them.

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[sharpie]

I do not think it is on her credit report, no.  She did just buy a house and in her dealings with the CA, it is probably apparent to them that she has no clue what she is doing in regards to this.  So, likely they are just hoping she ignores it and they win.  That is my thought anyway?

The OC says "CITIFinancial Gateway", but we don't know what the "Gateway" part is.  All she had was a CITI visa back in the day.

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@BrandonSS wrote:

The can attempt to collect forever, and they can sue if they want to, however they cannot win beyond the SOL. (for lack of better explanation)

Is the original account still showing on her credit report?  If so, there would be a date of first delinquency that would be used to determine the SOL

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[RobertEG]

They can sue, but you can offer an affirmative legal defense.

Michigan's Public Act 236 imposes "limitations of actions" in debt judgment and enforcement. Under Act 236, open accounts (including credit cards) are not enforceable six years after the statute of limitations goes into effect.  SOL begins running as of the "time the claim accrues," and must have been while the OC account was stilll open.  So  it appears that showing the date of closing of the account would be suffiencient proof of latest date that the SOL could have begun.

600.5827 Accrual of claim.

Except as otherwise expressly provided, the period of limitations runs from the time the claim accrues. The claim accrues at the time provided in sections 5829 to 5838, and in cases not covered by these sections the claim accrues at the time the wrong upon which the claim is based was done regardless of the time when damage results.

600.5831 Accrual of claim; mutual and open account current.

In actions brought to recover the balance due upon a mutual and open account current, the claim accrues at the time of the last item proved in the account.

600.5813 Other personal actions.

All other personal actions shall be commenced within the period of 6 years after the claims accrue and not afterwards unless a different period is stated in the statutes.

[sharpie]

Additionally, after reading the law, I am somewhat worried.

The law I read states that the statute of limitations does not count time that you were out of the country.  She was out of the country for approximately 3 years, and if she told the CA that, this might be how they are getting around it.  She did, however, always maintain an address in the US.

[RobertEG]

I dont think this is an issue, since she provided an address in the U.S. for contact.

600.5853 Absence from state.

If any person is outside of this state at the time any claim accrues against him the period of limitation shall only begin to run when he enters this state unless a means of service of process sufficient to vest the jurisdiction of a Michigan court over him was available to the plaintiff. If after any claim accrues the person against whom the claim accrued is absent from this state, any and all periods of absence in excess of 2 months at a time shall not be counted as any part of the time limited for the commencement of the action unless while he was outside of this state a means for service of process sufficient to vest the jurisdiction of a Michigan court over him was available to the plaintiff.