Conway v. Portfolio Recovery Assocs.

Conway v. Portfolio Recovery Assocs., LLC, 2014 U.S. Dist. LEXIS 43281 (E.D. Ky. Mar. 31, 2014):

Conway is first case accessible online—state or federal—to reach the issue of the statute of limitations for credit card debts. Conway strongly implies that credit card agreements are not contracts in writing within the meaning of Kentucky’s statute-of-limitations laws. But Conway holds that the debt collector’s cause of action was subject to Virginia’s three-year statute of limitations under a straight forward application of Kentucky’s borrowing statute.

Stratton v. Portfolio Recovery Associates, LLC

Stratton v. Portfolio Recovery Associates, LLC, 2014 U.S. App. LEXIS 20517, 2014 FED App. 0266P (6th Cir.):

Stratton holds that a debt collector cannot recover interest on a debt for a time period before it acquired the debt. The original creditor’s waiver of interest is binding on the debt collector. Stratton construes Kentucky’s usury statute as a consumer-protection statute rather than creating rights for creditors.

How to Challenge a Garnishment in Kentucky

The below is general information only on challenging garnishments under Kentucky law. The information is not legal advice, and should not be treated as such and is subject to the legal disclaimer.

If your Wages or Bank Account have been Garnished

If you’ve been served with a garnishment, unfortunately your options are limited. A bankruptcy can stop most garnishments. But bankruptcy is a very serious financial decision that will have long-lasting implications. You should not file bankruptcy as a knee-jerk reaction to an immediate problem. A garnishment means that a creditor has a judgment against you. (This does not apply to garnishments to collect defaulted student-loan debt.). In most cases, you need to attack the judgment in order to quash or set aside the garnishment.

A Judgment has been Entered Against You

To get a judgment, the creditor first has to serve you with a summons and complaint. The most effective way to attack a judgment is on grounds that you were not served with the summons and complaint as required by law. But this has to be true. If you don’t recall being sued, you should immediately go to the clerk of the court that issued the garnishment and check your case file.

What to Look for in Your Case File

Once you have the case file, you should carefully review the complaint to see if you recognize the debt for which you were sued. Next, you should check the proof of service. Under Kentucky law, there are two means of service: registered mail and personal service, usually by a sheriff’s deputy. If service was by registered mail, there should be a green, return receipt in the file. If service was by personal service, there should be signed summons return in the file. NOTE: the summons will be signed by the Process Server, usually a Sheriff’s Deputy. Kentucky law does not require the recipient of a summons and complaint to sign the summons.

Review the summons return. Is it addressed to you? Were you living at the address at the time of service? Review the green card. Is your signature on the card? Was it addressed to you? Did you live at that address at the time of service? If the file does not provide valid proof that you were served with the summons and complaint, you have valid grounds to quash or set aside the garnishment.

A Non-Wage Bank Garnishment can be Set Aside to Protect Exempt Funds

Certain funds are exempt from garnishment. For example, if your bank account consists of social security payment, disability payment, student loan disbursement, etc., you have grounds to set aside a non-wage bank garnishment.

A Garnishment May be Subject to Attack on Grounds that the Creditor Sued the Wrong Person

If you don’t owe the debt on which you were sued, you may have grounds for setting aside the garnishment. This is not fool proof and may depend in large part on the judge that hears the challenge.

How to File a Garnishment Challenge

The official garnishment challenge form can be found here. Fill out the form, including a brief description of your grounds for challenging the garnishment. For example, the Complaint was served on the wrong person and I never received notice of the lawsuit. The only funds in my bank account are from my social security award. Take the completed form to the clerk of the court issuing the garnishment. The clerk will notify the creditor or the creditor’s attorney of the garnishment and give you a date for a hearing. You need to appear at the hearing in order to argue your case. Be sure to bring any documents that support your argument. For example, bring a copy of your of social security award or an example of your signature to show that you didn’t sign the green return card.

Identity Theft

If you think that you are the victim of identity theft, you probably are. The problem of identity theft is absolutely staggering. Here’s a summary of the problem found on Trans Union’s website:

  • Identity theft is the fastest growing crime in America.
  • The number of identity theft incidents has reached 9.9 million a year, according to the Federal Trade Commission.
  • Every minute about 19 people fall victim to identity theft.
  • It takes the average victim an estimated $500 and 30 hours to resolve each identity theft crime.
  • Studies have shown that it’s becoming more common for the ones stealing your identity to be those closest to you. One study found 32% of identity theft victims discovered a family member or relative was responsible for stealing their identity. That same study found 18% were victimized by a friend, neighbor or in-home employee.
  • Most cases of identity theft can be resolved if they are caught early.
  • Financial institutions – like banks and creditors – usually only hold the victim responsible for the first $50 of fraudulent charges.
  • Only 28% of identity theft cases involve credit or financial fraud. Phone, utility, bank and employment fraud make up another 50% of cases.

We can help you battle identity theft. We can walk you through the steps you need to take when you’re the victim of identity theft, including completing and filing an identity-theft affidavit, filing a police report, and putting a freeze on your credit report. We can and will sue the creditor reporting agencies and the furnishers of  information that have ruined your credit report and complicated your life.

An Abundance of Resources

There are lots of really good resources on the web for dealing with identity theft. The best is supplied by the government on the Fair Trade Commission website. The President’s Task Force on Identity Theft also has some good resources and information, which can be found here. Another helpful resource is located on the website. There are many other sites both good and bad as Google and Bing make clear.

Indeed, everything you need to battle identity theft can be found on the web. You can follow all of the proper steps on your own without our help or anyone else’s. But still the chances are fairly good that despite your best and greatest efforts problems will remain on your credit report. It comes down to the fact that the credit reporting agencies just don’t care about you. It often takes a lawsuit to get their attention and get them to do what’s right. That’s where we come in.

Debt Validation and Dispute Letters under the FDCPA

The below is general information only. The information is not legal advice, and should not be treated as such and is subject to the legal disclaimer.

Debt validation is a specific right you have under the FDCPA. 15 U.S.C. § 1692g(b). Within 30 days of a debt collector’s “initial communication” with a consumer, you the consumer have the right to send a letter to the debt collector disputing the debt or requesting the name and address of the original creditor. If you send a timely validation letter, the debt collector must cease all collection activity against you until the debt collector sends you verification of the debt or the name and address of the original creditor.

What is Verification of the Debt?

“Verification of the debt” is not defined in the FDCPA except in the case where the debt collector is attempting to collect on judgment. In that case, verification requires the debt collector to obtain a copy of the judgment and send a copy to the consumer. As to other debts, it appears that verification requires a debt collector to obtain some sort of documentation from the original creditor and to send copies of the documentation to the consumer.

Why is it Called a Debt-Validation Letter?

The letter is called a “debt-validation letter” because the applicable statute is titled “Validation of Debts.” But the actual text of the statute never uses the word “validation.” Rather, the statute speaks of disputing debts and the debt collector’s duty of “verification of the debt.”

What if you don’t Send a Debt-Validation Letter within 30 Days of the Initial Communication?

The case law is clear that if a consumer does not send the debt collector a validation-letter within 30 days from the date of the debt collector’s initial communication. (To be safe, the validation letter she be mailed within the 30 days of the date on the debt collector’s dunning letter when the initial communication is in writing.). But if you’ve missed the 30-day window, there are still good reasons to send a dispute letter to a debt collector.

A debt collector violates the FDCPA if it reports credit information that it knows is false. This includes failure to report that a debt is disputed. 15 U.S.C. § 1692e(8). Sending a dispute letter to a debt collector may be very helpful in proving that a debt collector knows or should have known that negative information it sends to a credit reporting agency is false. Also, actively disputed debts will not negatively affect your credit score.

What to Put in a Validation or Dispute Letter

If you don’t believe you owe the debt, if you believe that the amount of the debt is wrong, or the dates are wrong, expressly say so in the letter. Use the word “dispute.” Dispute that you owe the debt, the amount of the debt, the date the debt went delinquent, etc. in the letter. If you don’t want a debt collector to contact you, put that in the letter. See 15 U.S.C. § 1692(c). Request that the debt collector cease all communications with you. If you want a debt collector to only communicate with you in writing, put that in the letter. If your employer does not allow you to receive phone calls at work, put that in the letter. 15 U.S.C. § 1692c(a)(3). You can request that a debt collector supply you certain documents or types of documents as part of its duty of verification. The debt collector might not comply, but it’s good practice in terms of notice. If you don’t want a debt collector contacting your friend and family, expressly state in your letter that the debt collector does not have your consent to communicate with anyone else but you in connection with the debt. See 15 U.S.C. § 1692(c)(b).

How to Write Effective Letters to Dispute Credit Report Errors

The below is general information only. The information is not legal advice, and should not be treated as such and is subject to the legal disclaimer. That said, the below offers some guidance for writing effective dispute letters to remove errors from your credit report.

We can help you through the dispute process. Please call or email for a free consultation. But for do-it-yourselfers, what follows is a best-practices guide gleaned from personal experience and authoritative sources such as the National Consumer Law Center’s treatise on Fair Credit Reporting. Because the credit reporting agencies themselves offer no guidance, this is meant only to be a guide and a source of general information and is not intended to be legal advice concerning any specif case or set of facts, and is subject to the Legal Disclaimer. That said and subject to the LEGAL DISCLAIMER, here you go:

File any Dispute Directly with the Credit Reporting Agencies

You MUST file any dispute directly with the Big Three credit reporting agencies: Experian, Equifax, and Trans Union. The FCRA contains an odd quirk. While a furnisher has a duty under the Act to report accurate information concerning debts to credit reporting agencies, you cannot sue a furnisher for reporting false, misleading, or incomplete information. Rather, in order to trigger liability under the Act, a furnisher first must receive notice of a dispute from a credit reporting agency. This is not to say that you shouldn’t also file a dispute directly with the furnisher, but you should do so in conjunction with dispute letters to the credit reporting agencies.

What To Put In A Dispute Letter

A dispute letter should contain the following:

  1. The consumer’s full legal name, including any suffix such as Jr. or Sr.
  2. The consumer’s current address and any other address where the consumer has lived in the past two years.
  3. The consumer’s Date of Birth.
  4. The consumer’s social security number. For security reasons, you should limit this to the last four digits of the SSN # clearly identified as such. For example, ***-**-1234.
  5. The full name of the consumer’s spouse if married.
  6. A clear and plain description of the dispute. The consumer should include a copy of the credit report with the disputed item circled or highlighted in order to avoid any claim of confusion as to the disputed item in question.
  7. An explanation of the dispute. For example, if it’s a Chase credit card account and the consumer has no credit cards with Chase, the letter should state that the account does not belong to the consumer and, therefore, the consumer does not owe the particular account listed on the credit report or any other Chase credit card account.
  8. The letter should clearly and plainly request that the disputed item be deleted or removed from the consumer’s credit report.

Supporting Documentation

Most sources will advise you to include copies of any supporting documentation with your dispute letter, including the FTC. But I think it’s best to wait. If a credit reporting agency concludes that the consumer’s initial dispute is frivolous, the agency can treat as frivolous any repeat dispute based on the same information. But the consumer may be able to avoid this trap by including additional information in a subsequent dispute letter. So I think it’s best to hold at least some documentary evidence for use in a subsequent dispute letter.

The Dispute Letter Must Come From The Consumer

The FCRA is clear that the consumer must directly send the dispute letter to the credit reporting agency: “. . . if the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly . . . .”15 U.S.C.A. § 1681i(a). An attorney, however, may draft a letter on behalf of the consumer and still meet the requirements of the statute.

Consider Including An Affidavit

You can convert a dispute letter into an affidavit by signing it under oath and notarized. You could also include a separate affidavit signed and notarized. An affidavit may increase the credibility of your claim and, consequently, cause a credit reporting agency to take your dispute more seriously.

Keep Records

Document everything. Dispute letters should be sent certified mail with return receipt requested. Keep the green card return. Keep copies of all dispute letters. Keep copies of all correspondence from the credit reporting agencies. Keep copies of your credit reports. Keep copies of your expenses. Document any phone calls. Start a file and keep it updated.

Be Patient

Correcting errors on a credit report requires work and effort. A credit reporting agency has 30 days to respond to a dispute letter. Most likely, the first dispute letter most likely will not fix the problem, nor the second, nor the third, etc. Like the woman in the 60 Minutes story, it may take years for a consumer to fix the problem on his or her own.

Start Early

Most people only become aware of errors in their credit reports after being denied credit, rejected for employment, etc. The best practice is to be proactive. Review your credit report before it becomes an issue. If errors exist, start the long march to fixing the errors now so that the errors won’t cost you later.

Midland Funding, LLC and Your Credit Report

Who is Midland Funding, LLC?

Midland Funding, LLC is one of the country’s biggest junk debt buyers. Midland buys old, charged off debt (usually credit card debt) for pennies on the dollar. Midland then attempts to collect the full amount of this debt from hapless consumers. Junk debt is often referred to as “Zombie Debt” because the debt comes back to bite you long after you thought it was dead. Midland often refers its debts out to Midland Credit Management, Inc. (“MCMC”) for servicing. MCM may have sent you a collection letter.

 Why is Midland on My Credit Report?

“[R]eporting a debt to a credit reporting agency is ‘a powerful tool designed, in part, to wrench compliance with payment terms . . . .’”[1] In other words, Midland is on your credit report in order to coerce you to pay a debt.

I May be able to Help You Remove Midland from your Credit Report

If Midland is reporting a debt that’s not yours, I can help you get Midland off your credit report at no cost to you. If Midland is reporting an incorrect amount of the debt, I should be able to help you get Midland off your credit report at no cost to you.

How do You Tell if Midland is Reporting an Incorrect Amount?

Midland often adds interest to the debts of Kentucky consumers that it reports to credit reporting agencies. It does this because it’s greedy and a 95% percent return on its investment is just not good enough. I can review your credit report to see if Midland is doing this to you and violating your rights.

Call or Email Me for a Free Consultation


How Can You Help Me at No Cost?

Reporting false credit information to consumer reporting agencies violates federal law, including the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. Under both of these powerful federal laws, Midland has to pay my fees and costs if I can win or settle a lawsuit in your favor. I’m so confident that I can get Midland to pay me, I won’t charge you a dime if we lose the case.

[1] Sullivan v. Equifax, Inc., CIV.A. 01-4336, 2002 WL 799856 (E.D. Pa. Apr. 19, 2002)

Medical Debts no Longer Part of FICO Credit Scores

I have some very welcome news. FICO is changing its scoring method . Medical debt will no longer count against you. As explained in a recent New York Times article:

The creator of one of the most widely used and influential credit scores, FICO, said on Thursday that the latest version of its score would no longer weigh medical debts — which account for about half of all unpaid collections on consumers’ credit reports — as heavily as it did in previous iterations.

The newer FICO scores, available this fall, will also ignore any collections that have already been paid; previously, the scores factored paid and unpaid collections equally, though it ignored amounts under $100.


Tax ID Theft

For the 14th consecutive year, identity theft was the top consumer complaint made to the FTC. Of these complaints, one tpe stood out for me: tax-refund id theft. I’d never heard of this one, but this seems to be a serious problem on the rise. As explained by the FTC:

The Treasury Inspector General for Tax Administration found another 1.1 million suspected fraudulent returns that the IRS missed in 2011 alone – which resulted in $3.6 billion in apparent fraudulently-issued refunds. They also identified 174,000 Social Security numbers that were used on multiple tax returns in 2011, resulting in $183 million being paid out to identity thieves who filed fake returns before legitimate taxpayers got around to it. The most targeted Americans don’t even seem to know it – people whose income doesn’t appear to necessitate filing returns are most at risk, followed by students ages 16-22.

Ask any expert what the easiest way to avoid being a victim of this crime is, and you’ll get the same answer: File as early as possible. Once you file your return, it doesn’t matter what information an identity thief has on you – he or she can’t file in your name and collect your return.

So if you haven’t gotten your refund yet, you may want to check on that. If you haven’r filed and are expecting a refund, you should get to work.