Last month, we featured an article from our Debt Defense Attorney, Joe LoTempio. He’s been with our office for over a decade and, in that time, has sued countless banks and creditors on behalf of our clients. Here is another one of Joe’s incredible cases. The Statute of Limitations and Credit Card Companies I’ve learned over the years that there are only two kinds of defendants: those who think they must have done something wrong if they’re on the receiving end of a lawsuit, and those who will swear until the day they die they did nothing wrong whatsoever. Creditors and debt collectors know this, and that’s why they like to pick on the elderly. Older folks immediately think they’re in the wrong and have no legal defense. One day early in my career, the boss called me into a consultation with a sweet older woman. She had just been served with a lawsuit from a debt collector who was trying to collect over $40,000 allegedly run up on a big-box store credit card. Our client said she gave the credit card to her adult son, who proceeded to run up the charges. Unfortunately, she couldn’t afford to pay it back — she was retired, could not work due to poor health, had no savings, and had only her Social Security income, barely allowing her to get by. Why Reviewing Contracts Matters As the case was a breach of contract action, the first thing I did was thoroughly read the contract. In my review, I saw that it contained a “choice of law” provision, which clearly says what state law is to apply if a lawsuit has to be filed to enforce the agreement. That’s important, especially in credit card cases, because each state has different laws when it comes to credit cards. Fortunately, it stated that the law of a different state was to be used in the event of suit. I researched the law and found that the applicable statute of limitations — the specific law that gives a plaintiff an expiration date on its legal claims — allowed the debt collector in my case to file suit within three years after default. I discovered they had missed that deadline by several months, meaning they no longer had the ability to sue my client. Upon finding this happy little nugget of information, I immediately filed defenses on behalf of my client, and further filed a counterclaim against the debt collector under the Fair Debt Collection Practices Act (FDCPA), saying the lawsuit was an effort to collect debt that could no longer legally be taken due to expiration of the statute of limitations. After sending the counterclaim, I heard nothing from the debt collector for several Tenacity and Legal Acumen: Getting Results
weeks. But about a month later, the debt collector’s attorney reached out to me to discuss settlement.
“Listen,” he said. “Your client owes the money. We don’t want to get into a big battle over this. If she pays us $30,000 right now, we can be done with the case. We’ll even give her a generous payment plan.” I laughed. My client had zero money, and she wouldn’t have paid even if she did, because the debt collector had missed its window to file suit and didn’t want to admit it. I told the attorney as such, and we proceeded with the case.
A few weeks later the attorney contacted me again.
“Listen,” he said. “We understand your client doesn’t have a lot of money, but she owes us and we don’t want this to get ugly. We’ll take $15,000 spread out over time, with no interest.” I laughed again. I told the attorney that he didn’t seem to be taking me seriously when I told him that my client had no money, and that the statute of limitations had expired. I reminded him that if the court agreed with me, not only would his client get no money, but it would have to pay my client her attorneys’ fees for pursuing a claim that no longer existed.
Another week passed, and the attorney contacted me once again.
“Listen,” he said. “We get that your client is on Social Security and has no assets, and we couldn’t collect from her even if we got a judgment. So, we’re willing to do a walk-away. We’ll dismiss our case if you agree that everyone will pay their own attorneys’ fees and costs.” I laughed, harder than I had previously. I told the debt collector’s lawyer that he was free to dismiss his lawsuit, but my counterclaim would live on, and I fully intended to pursue it on behalf of my client because she had been wronged and deserved justice. A Successful Resolution
To make a long story short, eventually the case settled. She did not have to pay a dime of the $40K, and they paid all her attorneys’ fees and costs plus some. It just goes to show you what a little legal acumen and a lot of tenacity can do. While not every case ends as well, I’m willing to bet many cases out there are just like this and never receive the proper attention. That’s why it’s so important to see an attorney when you’re served with a lawsuit, no matter the circumstances!
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