Complaint Review: Cavalry Portfolio - Phoenix Arizona

I was correcting your misinformation.  Your first error was calling Cavalry a creditor/first party creditor-they are not! 
Cavalry is a junk debt buyer (JDB), hence, a third party debt collector and the FDCPA applies to its collection  actions.  Even though they have purchased the debt, they are not a creditor as defined by the FDCPA.

Youre second error was regarding the SOL by stating that a CREDITOR ACTION could change the SOL-simply not true.  The ONLY creditor action that would extend the time allowed to sue for the debt would be when the creditor successfully SUES and is awarded a money judgment.  Actually, the SOL for the original debt is NOT CHANGED.  Instead, the debt has been affirmed by the court and a NEW (additional) SOL for the MONEY JUDGMENT is now established.

These two errors are COMMON with debt collector employees.  I dont know if its because thats what the debt collector employer tells the collector employees or if the employees just cant understand what the FDCPA and FCRA state.  Either way, Ive seen countless debt collector employees (and ex-employees) post this same misinformation.

As for JDBs suing folks and winning default judgments; yup, that is what happens when someone does not respond to a court summons.  However, many JDB employ what is called sewer service by having the court issue the summons to a known INCORRECT ADDRESS-this is illegal in every U.S. jurisdiction and is justification in many cases to have the judgment vacated or a retrial ordered.  It also opens the door for criminal prosecution of the debt collector if it can be proven that the debt collector HAD KNOWLEDGE of the debtors correct address.

I dont have any case.  I help folks (part time) with credit counseling and debt collector issues on a voluntary basis.

PS.  Steve buddy:  The egg on your face was because you failed to notice that the author of this report was writing about a WRITTEN CONTRACT, not an open contract.  Slow down a bit when you read!  Hope you had a good Xmas
and New Year!

I have seen people sued on debts past the SOL. They've been too unsophisticated to file an Answer to the Summons and point that out so the court just enters a Default Judgment and then the garnishments and property executions commence.  

In your case, you might have your pleadings properly prepared, citing the appropriate laws and how they apply to the type of contract in question, documentation of all your payments, etc. and the judge might be receptive. If that's the case, good for you!   I'm just saying I've seen people sued beyond the SOL but since they just let the court enter a Default Judgment, they had to pay anyway.  I don't know the law in your state but I would just caution you to find out for sure how the SOL works for the exact type of contract you signed AND keep in mind that municipal court judges often throw out the laws in favor of their whims. I've seen it happen a thousand times.  It sounds like you've got it all under control so it should go your way.

Best of luck to you.  

Robert,

I would have only had egg on my face if you could have shown me a state that has a 7 year statute of limitations on any debt.

You didn't.

So, maybe you should take your own advice.

In the case of the first party collectors, like Cavalry, they usually own the debt.  They buy large portfolios of charged-off, delinquent accounts making them your creditor so collection agency regulations may not apply at all.

You are mistaken. Cavalry and other junk debt buyers are considered THIRD PARTY debt collectors by the FDCPA, FTC, and District Court Case Law, therefore, the FDCPA applies to Calvalry.  The reason for this is because as part of their core business, they DO NOT OFFER OR EXTEND CREDIT.  Heres the definition from the FDCPA, Section
803 (6):

The term debt collector means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 808(6), such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.

There usually is a Statute of Limitations (SOL) but if you made a payment at some point or they tried to collect, the SOL can be "tolled."  In other words, in some cases, the SOL might have changed by some action on the part of the creditor, collector or even by you! 

I know of NO U.S. jurisdiction where they tried to collect would reset the SOL.  I know of no U.S. jurisdiction where an action of the Creditor would extend the SOL, EXCEPT in the case where the creditor has won a successful judgment against the debtor.  Then the SOL for the money judgment would supersede the SOL of the original debt.  Example: 

A delinquent credit card account has an SOL of 6 years in NY State.  The creditor successfully SUES the debtor and is awarded a money judgment of $1000 by a NY State court.  The SOL for the MONEY JUDGMENT (in NY State) is 20 years from the DATE of the court awarded money judgment. 

A creditor or junk debt buyer attempting to collect a debt does not extend the SOL.  Further, in NY State a debtor who makes a payment towards a delinquent account does NOT extend the SOL of the original debt.  In NY State, the only way for the original debt SOL to be reset is if the debtor brings the account to CURRENT status and then subsequently the account goes delinquent AGAIN.  This is per NY State General Business Law.

Unfortunately, that doesn't matter much if there are no regulators, police or other law enforcement entities to pursue all of these cases. You have to really do your homework if you want to pursue it on your own. If they are completely in the wrong and you can prove it, fines for their bad behavior have been reduced so you won't get much, if anything. 

There are States Attorney General, the FTC, and in NY State ANY county prosecutor that can go after a debt collector for violating the law.  The best course of action for a debtor is to SUE the debt collector in District Court for FDCPA violations.  The debtor may win ACTUAL DAMAGES, statutory damages up to $1000, and reasonable attorney fees. 

Additionally, in District Court, the Debt collector company MUST be represented by an licensed attorney who is accepted for practice in the District Court (Federal Rules of Civil Procedure.)  A debt collection company or any business entity CANNOT defend a District Court suit Pro Se.  This means that the debt collector incurs a cost of about $3000 or more in fees to defend the suit.  District Court for Western NY typically awards a successful debtor $1500 in damages and $3000 in legal fees for a simple FDCPA violation suit.

 

It has been a few years but I was a debt collector for a law firm where we skiptraced, located, sued and garnished the wages, bank accounts and state tax refunds of debtors for old credit card debts, auto reposession deficiency accounts, lease-end charges, etc.   I learned that each state is different and federal laws and regulations don't always apply since some collectors are third party (collection agencies collecting debts for the original creditor) and some are first party (the creditors themselves). In the case of the first party collectors, like Cavalry, they usually own the debt.  They buy large portfolios of charged-off, delinquent accounts making them your creditor so collection agency regulations may not apply at all.



I believe the term you're getting at is Statute of Limitations (not statue as in sculpture). There usually is a Statute of Limitations (SOL) but if you made a payment at some point or they tried to collect, the SOL can be "tolled."  In other words, in some cases, the SOL might have changed by some action on the part of the creditor, collector or even by you!   The SOL also depends on the type of contract: Retail Installment Agreement, Revolving Line of Credit, Secured Loan, etc. 

It's easy to say, "They can't do that! It's illegal."   Unfortunately, that doesn't matter much if there are no regulators, police or other law enforcement entities to pursue all of these cases. You have to really do your homework if you want to pursue it on your own. If they are completely in the wrong and you can prove it, fines for their bad behavior have been reduced so you won't get much, if anything. 

In my opinion, banks, financial institutions of all kinds, debt collectors and debt buyers need MUCH more regulation, not less.  Write your congressman.

Oh Steve, you really should slow down a bit before you berate someone

I always laugh when I see someone quote this reference.

Dont laugh to hard Steve.  It would seem to me that youre the one who should slow down and READ the  entire report so that you understand the context in which the author is writing.  The author wasnt quoting any  reference at all.  The author was making a guesstimate, an approximation based on the information presented on the website link he posted.

Most states seem to be around 6 or 7 years but a few like RI, LA, OH are as many as 15 years, so where the debt comes off your credit report, the creditors or collections agency can still sue you in those states. 
 
*The TRUTH is: Not even 1 state in the entire United States has a Statute of Limitations of 7 years on debt collection/legal enforcement. NOT 1!! And, only a handful are 6 years!! 

Are you really going to quibble about the 7year SOL approximation the author stated?  That really isnt the important issue here.  Your statement: only a handful are 6 years is WRONG buddy, but Ill get to that in a moment.

The fact of the matter is that MOST States' Statute of Limitations on debt collection enforcement falls between 3-5 years.

You may be correct when discussing OPEN ACCOUNTS, but that isnt what this author was discussing.  This is the part where you wear egg on your face.  Let me remind you of what the author posted:  The sad thing is that I attempted to negotiate with the original creditor in 2003 (prior to Repo)  asking them to  reduce my car payments by just 100.00 per month for 6 months and add the 600.00 onto the end term of the loan, But Chrysler refused to work with me! 

It is clear by the authors statements about Chrysler and a REPO that the author is writing about WRITTEN CONTRACTS (vehicle loan), not open accounts.  When it comes to written accounts, the author is closer to the facts than you are.  Heres a breakdown of SOLs for WRITTEN CONTRACTS:
           
SOL in Years-Number of States
3 years-7 states
4 years-3 states
5 years-6 states
6 years-24 states
8 years-1 state
10 years-7 states
15 years-2 states

24 States have an SOL of 6 years for written contracts.  34 States have an SOL of 6 years or more for written contracts.   16 States have an SOL of 5 years or less for written contracts.  Id say that 24 states is more than a handful, wouldnt you Steve?  How about the 10 year SOL?  7 states have 10 years SOL, the same number of states that have a 3 year SOL.  More States have a 10 year SOL than those that have 4 years or 5 years.

Your berating rebuttals and never ending advice for authors to go to school to learn to read are legendary on RoR.  Youre usually correct but this time it seems to me you were so quick to post the author is WRONG, that you didnt take the time to read and comprehend the report.

Laugh away Steve.  I know I am.  <chuckle>

Unfortunately the OP an above poster suffer from Incomplete Information in terms of the Statute of Limitations.  They are both right..in a way.  But they are also both wrong..in a way.

The Statute of Limitations is determined by not only the State but, and this is important, the type of debt.  Depending on the type of debt the SOL may be as short as 2 years, or as long as 15 to 20 years.

The OP mentioned 6-7 years, and they seem to be talking about Written or Promissory Notes.  The above poster appears to be talking about Credit Cards(Open Accounts) mentioning 3-5 years.  So while both are correct, both are also incorrect in inferring that these are the only Statute of Limitations.  In general Oral contracts have the shortest SOL, and Promissory Notes have the longest, but of course there are exceptions so it is important that anyone who wants to use the SOL as a defense uses the correct Statute of Limitation.

It is also good to understand that there are ways to reset the Statute of Limitations.  This may include making a payment on the debt.  This is why you get Debt Collectors saying just to make a "good faith" payment of a small amount(like $20), when in fact the only thing in "good faith" is that they will use that as a reason to reset the SOL and sue you for the entire amount.  In some other cases they could take a signed promise to pay to reset the SOL.

Also keep in mind that you can be sued even if the debt is past the Statute of Limitations.  However, you can  use the SOL as an affirmative defense to have the case dismissed.  If this happens to you it is very important that you respond to the suit(if required) and show up in court.  If you don't the creditor may still be able to obtain a default judgment.  

Once you have a judgment entered against you, you fall under an entirely different Statute of Limitation.  Again depending on the State it may be 20 years or longer if they are allowed to renew the judgment.

Tell that to missouri then, its 10 years here.

I always laugh when I see someone quote this reference.

>>

Always check with your states statue of limitation for debt before paying anything!  Most states seem to be around 6 or 7 years but a few like RI, LA, OH are as many as 15 years, so where the debt comes off your credit report, the creditors or collections agency can still sue you in those states. 

http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml


>>


*The TRUTH is: Not even 1 state in the entire United States has a Statute of Limitations of 7 years on debt collection/legal enforcement. NOT 1!! And, only a handful are 6 years!!

The fact of the matter is that MOST States' Statute of Limitations on debt collection enforcement falls between 3-5 years.

Yes, you are right, the debt is past the time that they can SUCCESSFULLY sue you in court.  But you are wrong, they can still contact you regarding the debt, and they can still legally try to collect. 

What you need to be careful about is the fact that they sent you a letter telling you of their intentions to sue you. 

A word or two about the FDCPA (Fair Debt Collections Practices Act). 

1.  A 3rd party collections agency CANNOT make threats that they dont intend on carrying out.  So this tells me one of 2 things.  1), They are going to Sue You, or 2) They are making idle threats.

If it is option 1, and they are going to sue you, then for God's sake when you get served, do not blow this off.  If you figure that no judge will give them a judgement because the debt is so old, you are wrong. Only if you show up in court and contest the case, then the judge will grant your motion.

If you dont show up, this collection agency will win a default judgement against you, and then your fun starts.  They weill be able to garnish your bank accounts, and perhaps garnish your wages. 

If they do sue you, be sure to get a Lawyer.  Do not go into Court without one. 

If it is option 2, and they are bluffing, then you have a case against them.  They are making threats they have no intentions of carrying out.  You can then sue them, and get 1000.00 for each violation of the FDCPA.

I honestly think they are going to sue you.  Just make sure you show up in court.  The Collection Agency doesnt think you will show up.  Also you will need to make sure they dont try to serve you at an inactive address.  Chances are they will try to do this too, to make it more likely that you wont show up in Court.  They seem to have your correct address because the letter got to you, but just make sure the address they had on the letter is correct, and not just forwarded later.

Hope this helps