ASSET ACCEPTANCE Help! Asset is threating me with a lawsuit with my first notice and this account is over 5 years old! Ripoff Warren Michigan

Demanding validation/disputing the debt does not reset the SOL clock.

OK Here's what you can do to force the collection agency to back off and validate the debt:

FIRST - Read the Fair Debt Collection Practices Act at http://ftc.gov/os/statutes/fdcpa/fdcpact.htm.

It is important to understand the definitions used in the FDCPA, so I have included that section of the law. Many collectors do not fall under the FDCPA, so please read paragraph 6 and its subparagraphs very carefully:

§ 803. Definitions [15 USC 1692a]
As used in this title --

(1) The term "Commission" means the Federal Trade Commission.

(2) The term "communication" means the conveying of information regarding a debt directly or indirectly to any person through any medium.

(3) The term "consumer" means any natural person obligated or allegedly obligated to pay any debt.

(4) The term "creditor" means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.

(5) The term "debt" means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

(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. THE TERM DOES NOT INCLUDE --

(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;

(B) any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;

(C) any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;

(D) any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;

(E) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; and

(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.

SECOND - send a certified letter, return receipt requested, to the DEBT COLLECTOR to dispute the debt and request written validation of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such validation or judgment, or name and address of the original creditor. Also, include a statement stating that you do not wish to be contacted again until you receive all the written debt validation information you have requested. You should specifically ask for the following documentation:

What the money you say I owe is for;
Explain and show me how you calculated what you say I owe;
Provide me with copies of any papers that show I agreed to pay what you say I owe;
Provide a verification or copy of any judgment if applicable;
Identify the original creditor;
Prove the Statute of Limitations has not expired on this account;
Show me that you are licensed to collect in my state;
Provide me with your license numbers and Registered Agent.

Once they receive the letter, they must cease all collection efforts until they provide the written information requested. This is in accordance with the Fair Debt Collection Practices Act.

THIRD - Once you received the written validation information requested, contact the CREDITOR (who owns the debt) via certified mail to resolve the matter.

Please note that simply sending the letter telling them to leave you alone does not absolve a valid debt. What the letter does do is force them to provide you with written validation of the debt and to stop all collection actions until you receive the information. Once you have the information, you should act on it accordingly by contacting the CREDITOR via certified mail.

Some other notes: Any statute of limitations does not absolve a valid debt; it merely prohibits the creditor from going to court to obtain a money judgment against you. IF there is already a money judgment, the statute of limitations most likely is longer - in New York State it's 20 years.

You can check the statute of limitations for debt in your state at http://www.fair-debt-collection.com/statue-limitations.html.

In addition, a credit report listing does not in any way determine if a debt is valid or not, or collectible or not that is what courts are for. There are 3 ways a valid debt can be absolved; you pay it off, the creditor forgives it, or bankruptcy court orders it absolved.

Section 809 of the FDCPA covers debt validation nicely:

§ 809. Validation of debts [15 USC 1692g]

(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing --

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.

Hope this helps.

Under California law the SOL:

California Statutes of Limitation

Written agreements: 4 years, calculated from the date of breach.

This will be an affirmative defense if they try to sue you in California. If you recieve a summons you MUST file a response in the required time and appear in court use the SOL as an affirmative defense. The court will NOT proactively use this defense on your behalf and if you fail to show for court or file a response they will likely be granted a default judgement.

Citigroup (Citibank) has its home office in NY. If your original agreement stated it was enforceable in NY they may try the tactic of suing you there, not a usual scenario however.

It is more likely they have sold the debt outright to Asset Acceptance, a simple call to Citibank would confirm this.

Aafes, how sure are you on that SOL? In many states, there is one SOL for "written agreements," but said SOL will not pertain to credit arrangements, which will be governed by a different SOL.

There's also a jurisdictional question here that leaves me very uncertain that CA law would even apply. I would imagine that the applicable law is either the laws of the States of New York, Delaware, or South Dakota. The original agreement probably had a "choice of laws" provision that sets a given state's law as the law applicable to the agreement, and it probably isn't CA. You need to figure out which state's laws apply, and then try to figure out the SOL specific to credit arrangements in that state.

I know this sounds confusing, but it's a well accepted legal oddity. You can enter into a contract in, for example, the State of Michigan, that states that the contract will be governed by the laws of Hawaii. Then, even if you are sued in a Michigan court, the laws of Hawaii will apply. Isn't the law fun?

Thank you for your responses. My question now is if I am sued based on NY's SOL because thats where Citi bank Resides even though im in California. What is their SOL? Also, if my account was sold to Asset which im sure it was (they are the ones sending me the notice), does Califoria SOL apply to me since thats where I live?

The statue of limitations in California is as follows:

Oral Agreements 2 years; Written agreements, Contracts, Promissory Notes - 4 Years.

Most credit card companies will simply hire a local collection attorney to proceed with litigation in your state. In general, the credit card agreement has wording to indicate it is "enforceable under the laws of xxx state". The reasoning behind this is ideally not to sue you in their state, rather that the states they are incorporated in have liberal laws regarding interest rates allowing them to "stiff" the cardholder in states that cap interest. A Supreme Court decision a few years ago allowed exporting of interest rates.

By doing business in your state the company subjects themselves to the jurisdiction of the state's court. You, on the other hand, by obtaining/using their credit card DO NO submit yourself to jurisdiction of the court in their state. You are a citizen of California and subject to their laws.

In regard to a trial, absent your affirmative defense of the statute of limitations, the collection attorney may be asked to brief the court on the laws in the banks home state in regard to interest etc. If you have not responded, or are not their, you lose big time.

Why should there be any SOL anyway if it was a legitimate debt? Why should the mere passage of a period of time excuse a debt in the US?

Legally, you may not owe the money, but ethically you do.

Who do you think pays off your unpaid debts in the end.

The answer is everybody who pays their debts as promised.

So although there is an SOL of some type, it's not really fair that you can just skip out on a debt, no matter what the circumstances, unless you filed for bankruptcy.

My advice to you is to stop trying to beat the system and pay back what you rightfully owe.

I for one believe that their should be no SOL on LEGITIMATE debt, why should a creditor have to give up claim to money they are out of based only on the passage of time?

General tips:

DO NOT under any circumstances let them bully/intimidate you into making a token/small payment on this debt. If you make any payment on an old debt you RESET the clock on the statue of limitations....a big disaster.

A threat to sue may just be a bluff. Don't let them scare you with tactics like: If you don't pay by tomorrow we'll send the sheriff to have you arrested...Collection agents have no such power over you...yet many people cave-in easily to such abusive/illegal tactics...Don't be one of them

If you receive a court summons...DO NOT ignore it...If you fail to show up... they'll get a default judgment against you

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From the web:

Asset Acceptance

They purchase old portfolios of mostly worthless charged-off accounts for pennies on the dollar. Once owned, they appear to inflate the value of the portfolio, send out dunning notices and try to collect at a ridiculous profit.

Don't be surprised if you notice the date of last activity on your credit report, as stated by AAC is WRONG! Deliberately changing the date of last activity is a way to scam consumers into thinking they are entitled to money they would not legally be allowed to collect.

This is standard procedure for them -- from "re-aging" the debt on the credit history, to suing on what is probably a statute of limitations claim, to reneging on a written promise.

Watch out for the mystery $50-$75 payment you didn't' make that magically revives the account. When pressed, they claim to do an investigation and "discover" that they made a "clerical error" and mistakenly posted someone else's payment to your account.

NOTHING this 'House of Cons' does should be believed or taken at face value. They have proven over and over they are liars and thieves!

Under federal law, the Fair Credit Reporting Act (FCRA) an account may ONLY stay on a credit report for seven years. One of the cons being used by Asset Acceptance is to claim you made a $50 payment, which would have re-started that clock. Unfortunately this is a 'bogus-claim' by AAC, is illegal and violates your rights.

Asset Acceptance Corp has earned the distinction of one of "AMERICA'S WORST COLLECTION AGENCY'S". They lie, steal, cheat, misrepresent, file bogus claims, create phony documents and commit perjury in the court system JUST to increase their bottom line.

From the California Civil Procedure Code:

116.225. An agreement entered into or renewed on or after January 1, 2003, establishing a forum outside of California for an action
arising from an offer or provision of goods, services, property, or extensions of credit primarily for personal, family, or household
purposes that is otherwise within the jurisdiction of a small claims court of this state is contrary to public policy and is void and unenforceable.

Very interesting, Larry. Thanks for posting that.

I would like to see some federal cases interpreting this law, if there are any, which it seems like there would be.

The issue that I see with that law is that the contract is entered into across state lines, which would intuitively put it into the jurisdiction of federal law. And federal law, via the constitution, trumps state law in most cases. Or, in another sense, the law affects interstate commerce, which is the sole province of the federal government, and state laws affecting interstate commerce are generally unconstitutional.

But I do like Aafes' analysis above and, when coupled with that CA law, it may be just right. Basically, by doing business in one state, you submit to the jurisdiction of the courts of that state. However, at least in the past, "choice of forum" provisions were generally upheld, and a contract could or can affect jurisdiction by having both parties agree to a particular jurisdiction.

Also, any law that interferes with one party's rights under a contract is presumptively unconstitutional per the "freedom of contracts" clause in the Constitution. But this clause has been continually chipped away since the early 1900s and the advent of labor laws, and its relevance today isn't what it used to be.

But "choice of jurisdiction" is a separate issue from "choice of laws," and choice of laws provisions are routinely upheld. So the case may have proper jurisdiction in CA, but the laws of NY can still apply. Then you're getting into that whole Erie line of cases, which I hated in law school, and which prevented me from wanting to take a "conflict of laws" course.

As regards Lee Ving's comments, I suppose that you are correct on an ethical level, at least to some extent. The purpose of a legal statute of limitations is, generally, to weed out cases where the evidence is so "stale" as to be presumptively unreliable.

But there is another purpose to the SOL, and it is also reflected in the equitable principle of "laches." Basically, the notion here is that if someone sits on their rights for too long, that they should be presumed to have forfeitted those rights, and shouldn't be permitted to wait for years down the road and then spring an ancient action on someone.

But I guess I would have to concede that you are correct per the ethics of the matter, in that the debtor received a benefit and should be held to his end of the agreement. But there are nonetheless valid reasons behind statutes of limitations.