topic Re: Help, please! Daughter being sued and she just keeps freaking out. in Rebuilding Your Credit

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

sharpie — Tue, 02 Nov 2010 00:54:50 GMT

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)

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

BrandonSS — Tue, 02 Nov 2010 01:02:24 GMT

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.

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

RobertEG — Tue, 02 Nov 2010 01:37:34 GMT

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.

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

sharpie — Tue, 02 Nov 2010 01:42:22 GMT

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!

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

BrandonSS — Tue, 02 Nov 2010 02:01:08 GMT

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

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

sharpie — Tue, 02 Nov 2010 02:01:36 GMT

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.

@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.

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

sharpie — Tue, 02 Nov 2010 02:05:20 GMT

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.

@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

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

RobertEG — Tue, 02 Nov 2010 02:19:14 GMT

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.

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

sharpie — Tue, 02 Nov 2010 02:09:09 GMT

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.

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

RobertEG — Tue, 02 Nov 2010 02:17:21 GMT

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.

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

sharpie — Tue, 02 Nov 2010 02:20:50 GMT

Ok yes, that is exactly the case. Nobody knew how to get ahold of her where she was unless they contacted me or knew her address there. No bills or anything of that sort ever went there, and her driver license was always valid here.
Thank you so much. I cannot find anything on the internet concerning anything that says "CITIFINANCIAL Gateway", so have no idea who to contact for OC. But I would think the letter from the attorney in 2003 with the same account number would be proof of date? Would you think?

@RobertEG wrote:
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.

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

Anonymous — Tue, 02 Nov 2010 02:36:51 GMT

@sharpie wrote:
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.

First of all, do not fail to respond to the legal process you were served. Do so and claim the debt is time barred. At the same time, file a countersuit for FDCPA violations -- a CA suing when they know full well the debt is time barred.

Secondly, yes, the SOL does toll when one is absent from the country. This may or not be a factor in your case depending on several crucial pieces of information and whether or not the creditor knows she was absent from the country (or even the state, for that matter).

While the statute of limitations in Michigan is 6 years on credit card debt, what is unclear is whether there are provisions to toll the SOL by making partial payments or entering into a new credit agreement.

I would consult a local attorney. In the end the attorney can recover legal fees through the FDCPA counterclaim you make.

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

Anonymous — Tue, 02 Nov 2010 02:38:59 GMT

@RobertEG wrote:
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.

Since service usually must be personal in nature, simply maintaining only an address would likely be insufficient.

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

sharpie — Tue, 02 Nov 2010 03:09:08 GMT

@Anonymous wrote:
@sharpie wrote:
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.
First of all, do not fail to respond to the legal process you were served. Do so and claim the debt is time barred. At the same time, file a countersuit for FDCPA violations -- a CA suing when they know full well the debt is time barred.

Secondly, yes, the SOL does toll when one is absent from the country. This may or not be a factor in your case depending on several crucial pieces of information and whether or not the creditor knows she was absent from the country (or even the state, for that matter).

While the statute of limitations in Michigan is 6 years on credit card debt, what is unclear is whether there are provisions to toll the SOL by making partial payments or entering into a new credit agreement.

I would consult a local attorney. In the end the attorney can recover legal fees through the FDCPA counterclaim you make.

I found some cancelled checks where I made payments (NOT the payment in full, however) in 2002. I might have one, but got tired of going through the checks, will finish that up tomorrow night.

Although she was physically out of the country, if anyone had tried to serve her papers, they would have come to my residence. This absolutely, positively, never happened. All her mail came to my address.

My concern is that when she spoke to the CA on the phone, she might have said "This is not possible, I was out of the country for three years at that time". I asked her if she said that, but she thinks not. For some reason, I think she may have. I know not to talk to them on the phone. She didn't, and just figures if someone says you owe them money, you pay them. Her real estate agent, and the mortgage company, and another bank told her this was a scam, when she mentioned it while buying her house. She is a brutally honest and also trusting person, and really has no experience with CA, as she never had to deal with one before.

How do I know when the SOL starts? I have to believe there has certainly been no contact from anyone since 2003 until this CA got it a year ago. And most certainly no payment of any sort since then. I do not know when I paid it in full (twice...), but I think it was before 2002 because she was still in college.

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

RobertEG — Tue, 02 Nov 2010 03:17:21 GMT

There is only one way to definatively know when your SOL starts. That is to go into court, assert your interpretation of the statute of limitations, then have the plaintifff argue differently. The judge then makes the final, definative, legal decision.

Good reason to hire legal counsel prior to court. As O6 has said, there may be case law that permits SOL reset, either for times of absence, or based on later payments. This is not an open and shut SOL issue.

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

Anonymous — Tue, 02 Nov 2010 05:06:56 GMT

@RobertEG wrote:
There is only one way to definatively know when your SOL starts. That is to go into court, assert your interpretation of the statute of limitations, then have the plaintifff argue differently. The judge then makes the final, definative, legal decision.
Good reason to hire legal counsel prior to court. As O6 has said, there may be case law that permits SOL reset, either for times of absence, or based on later payments. This is not an open and shut SOL issue.

Very true.

@ Sharpie: Seriously, get a local attorney involved. Instruct him to also file a countersuit since the Fair Debt Collection Practices Act allows you to sue a debt collector for attempting to sue you when the SOL has expired. The Act provides for legal fees if you prevail. From experience I can tell you the most likely scenario is that the debt collector doesn't show up and settles on your countersuit.

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

RobertEG — Tue, 02 Nov 2010 05:29:35 GMT

The very fact that this thread has now reached 16 posts should be evidence enough to take O6's advice, and now obtain and listen to legal counsel.

If nothing else, the progression of this thread should give you the right questions to pose to your attorney, and aid in any legal defense.

Get your best date of begin of SOL documented, and present that to your atty. That will save a lot of time, and billing hours, in proof of the critical date of SOL...

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

sharpie — Tue, 02 Nov 2010 12:53:55 GMT

One more question. And I will consult an attorney.

Does anyone know if my daughter can just have me handle this with minimal involvement from her? She gets so upset every time I try to talk about it with her. She has always been this way with money. She pays cash, is responsible, always saves, paid off huge student loans in about two and a half years, etc. etc. She does not make much money and is paying for grad school with no debt. She bought this house to live free, she has a bunch of renters and makes a little money off it. She has enough stress right now without this too. (5 jobs, one of which is full time, and full time grad school.)

I know she got a power of attorney to actually close on her house as she was not available at the time, (out of the country) could she do the same for this?

Plus since I am the one who rang up the bill and have no proof I paid it, I feel extremely responsible.

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

chasmith — Tue, 02 Nov 2010 13:14:52 GMT

You cannot represent your daughter in court unless you are an attorney. She will have to appear and be involved if she isn't represented by an attorney, you can be with her but probably cannot speak in court except as a witness. I agree with everyone else - go hire a lawyer!

An answer must be filed to the lawsuit or they will get a default judgment. You have tat least two affirmative defenses. The first is that the debt was paid to Citi. The second is that the Statute of Limitations has run. Both must be asserted in the answer.

If you won't hire an attorney, as the joint borrower, you may have some standing outside court. Hopefully you kept the proof of the second payoff. You could write CMRRR to the attorney for the JDB (or write the letter for your daughter and have her sign it), copying the JDB CMRRR with your proof, something like this:

"You have brought suit against XXXXX, my daughter, on a debt which was paid in full to the original creditor. I have enclosed ... (state the proof you have and enclose the documents).

As the Attorney for JDB, you had the obligation to exercise proper diligence before filing suit. Having failed in that, you are ethically bound to withdraw the fraudulent lawsuit."

Then slap a cover letter on the whole thing and send CMRRR to the CEO of CitiBank demanding they correct their fraudulent sale of a paid debt.

Finally, find out whether the FDIC or the Comptroller of the Currency regulates Citibank and file an online complaint for fraudulent conveyance of debt.

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

chasmith — Tue, 02 Nov 2010 13:17:31 GMT

Oh, and with the answer be sure to assert counterclaims for attorney's fees and intentional infliction of emotional distress on your daughter.