Your Survival Guide When Sued By Portfolio Recovery Associates (PRA)
Your Survival Guide When Sued By Portfolio Recovery Associates (PRA)
You have been sued in Alabama by Portfolio Recovery Associates (PRA) and you need to know how to survive this in the best possible way. That’s the point and purpose of this “Survival Guide” so read on to learn what to do to survive, and even thrive, when sued.
Being sued is not the same as having a judgment — you have not lost the case.
Big difference in being sued and losing. Many times when negative things happen to us — and being sued certainly counts! — we tend to immediately assume the worst will happen and then act like it already has.
That’s some strange time travel we do!
Here we are right now.
But we look into the future and say “What is the worst that can happen?”
Judgment by PRA against me.
So then we say, “This is what will happen.”
But then we tell ourselves it is not in the future, but is right now and then we say “Since I already lost, I’ll just do nothing.”
NO!
Being sued does not mean….
- Mean you owe the debt
- Mean you will lose the lawsuit
- Nor does it mean you should give up
It simply means you have been sued.
Don’t make this more than it is — you have options.
But only if you don’t give up right now by failing to respond . . . .
The biggest danger point for you is right now — failing to respond to the lawsuit and getting a default judgment against you.
Yes it is bad you were sued.
Yes in the future you might lose.
But you haven’t lost yet and may never lose.
Unless you do nothing — then you will definitely lose.
The biggest opportunity for PRA, and the biggest danger for you, is to do nothing. Because then PRA will get a judgment against you.
This is called a default judgment and it means you failed to do anything — you defaulted — and now there is a judgment against you.
“So how bad is a default judgment?”
Bad.
It is a real judgment — don’t believe any nonsense you read on the internet or that friends or family tell you — a default judgment will get your bank account wiped out, 25% of your wages garnished, and can result in your car or home or other property being sold to pay this default judgment.
“So what’s the solution?”
File an answer. Do something to respond to the lawsuit within the time limits you have. It is all triggered by when you are officially “served” with the lawsuit.
Sued in district court? 14 days after served is your deadline.
How about small claims court? Take the day you were served and your answer is due in 14 days from when served.
What about if you were sued in circuit court? You have 30 days from when you were served to file your response.
Don’t know how to file an answer or if you should settle? Examine your five options quickly to decide . . . .
Learn your rights — you have five (5) options now.
You have five basic options:
- File bankruptcy
- Fight the lawsuit on your own
- Settle the lawsuit on your own
- Hire a lawyer to fight the lawsuit for you
- Hire a lawyer to settle the lawsuit for you
But which option is the best for you?
Easiest way is to talk to a lawyer who knows about all five options. You can do that if you live in Alabama by calling us at 205-879-2447 or you can read on and get more information before you call us. So let’s look at these options — all five of them . . . .
Decide which of the five options is best for you.
First Option — File bankruptcy
This is the extreme option — normally not appropriate but when absolutely necessary it is extremely effective. Think of this as amputation.
You only do it when you have no alternative.
It destroys your credit report and score for quite some time but if you qualify it does have the advantage of wiping out the PRA debt and other secured and unsecured debt.
Talk to someone who can tell you whether this extreme option is necessary — and remember the old story of the man holding a hammer — everything looks like a nail. The same can be true of lawyers who only file bankruptcy. They can start to view every problem as being solved with bankruptcy even though there normally will be much better options available.
Find out why you need to file bankruptcy and is the cost (now and your long term credit) worth the benefit and can you get the benefit from one of the other options.
To be clear — I am not a fan of bankruptcy but I occasionally refer people to bankruptcy attorneys when it is necessary. Just make sure it is necessary before you do a life altering move like bankruptcy.
Second Option — Fight the lawsuit on your own
I like this one in the right circumstance.
You file your answer in the time limits discussed above.
You get your trial date (and maybe some other activities before then) and then you try your case.
If you are in the right court — small claims or district — this can be a great option. Usually circuit court is too complicated to fight PRA without a lawyer.
You will be saving money — no lawyer fee.
The downside is you won’t have a lawyer to help you.
So you save money and you will need to spend time. This is true of most things in life.
You have a choice — keep your money and spend your time or spend your money and keep your time.
A few examples of how you need to consider spending your time if you want to fight the PRA lawsuit on your own:
- Read materials on what is likely to happen in a trial;
- Go to court and watch your actual judge — not anyone else — handle civil lawsuits filed by PRA or Midland Funding or other debt collectors. Get a feel for the courtroom. Get a sense of how formal, or not, the judge is. So that when your time comes to try your case, you will be as comfortable as possible.
We have had many clients choose this approach and then hire us after they have beat PRA in order for us to sue PRA in federal court for violating Alabama state law and the Fair Debt Collection Practices Act (FDCPA). So if you choose this option, feel free to contact us after you win so you can see if you are entitled to money damages against PRA.
But what about settling with PRA on your own? Read on to find out more about this third option . . . .
Third Option — Settle the lawsuit on your own
You can always try to settle your case so it does not go to trial.
Two basic options in settling on your own:
- Pay a lump sum to settle; or
- Make monthly payments to settle the whole debt.
Lump Sum
Normally this will be between 50-75% of the amount you were sued for, paid all at once (lump sum).
The advantage is you get the case over with immediately upon paying.
Disadvantages include you will still have negative credit reporting, you could get hit with a 1099 for debt forgiveness and have to pay taxes on it, and you will given up a considerable amount of money.
Monthly Payments
Normally PRA will agree to payments made for 1-3 years to pay off the debt.
Do be careful about agreeing to a “consent judgment” — something I rarely think is appropriate and never with a debt buyer. There is no need to have a judgment — you can simply have an agreement to pay the agreed upon amount over time. Most courts will let you do this — it is called the “settle/pay” docket or something similar to this.
Just like the lump sum, this will still remain on your credit report and you are going to be paying the full amount sued for so keep this in mind.
But what if you are not a “do it yourself” person when it comes to a lawsuit and you want to hire a lawyer? You have two choices — hire a lawyer to fight or settle. Let’s start with a lawyer to fight the lawsuit for you . . . .
Fourth Option — Hire a lawyer to fight the lawsuit for you
You hire the lawyer. The lawyer files your answer and handles whatever else is involved in the case.
Then your lawyer goes to trial.
I’ll explain how we do this. You can also read a series of short articles where we walk you through step by step from beginning to the end of your debt collection case.
We electronically file your answer in court and send you a pdf (or hard copy — your preference) that shows you the answer was actually filed so you will be able to rest easy.
Then at the time of trial, we do NOT want you to be at court unless you have been subpoenaed. Unless we need you there to prove an affirmative defense, we will let PRA see if it can prove you owe the debt and PRA owns the debt.
We have not yet seen this happen.
The objective is to win the case so we have a judge’s order saying you do not owe PRA any money on this debt.
When that happens, then we look at suing PRA in Federal Court for violating Alabama state law and the FDCPA.
The disadvantage of hiring us to represent you to fight the lawsuit is this costs money. It can range from $1000 to $10,000 in fees but we almost always make it where you can hire us for the same or less than what you can settle the case with PRA for so you will have a real choice.
The advantage is you would expect to have a better chance of success having a lawyer represent you than representing yourself. We have been fighting PRA for many years and face them in state court (small claims, district, and circuit court) and also in federal court when we sue PRA for damages.
But maybe you want to know about hiring a lawyer to help you settle the case? Read on then . . . .
Fifth Option — Hire a lawyer to settle the lawsuit for you
This is where you hire a lawyer — us or someone else — to negotiate a settlement with PRA.
We have a very simple approach to settlement:
- Case is dismissed with prejudice
- PRA removes the account from your credit report
- You pay PRA no money
Many people find this to be extreme but this is what we do in PRA cases. You see, we actually only accept cases where we have authority to do this or to try the case. We don’t pay PRA any money so if you want to pay PRA money, you’ll need to do it on your own or hire someone else.
We give PRA a simple choice — settle with our terms or let’s go to trial.
It is not unfair — after all they sued you so PRA should be happy to go to trial, right?
I can’t speak to how it works with hiring a lawyer that pays PRA because that is not our approach but if you want that, then find out the cost to settle, the amount of the attorney fee, what happens to your credit report, will you owe taxes, etc.
Take action on the best option for you right now.
Here’s the bottom line — you must take action. So think about these 5 options — call us if you want help thinking through them — and then pick one.
Pick one and be enthusiastic about it. No regrets.
If you hire us then we want you to say, as we have been told before, “That was the best money I ever spent in my life.” We want and expect you to be thrilled with not only the results but also the experience of being our client.
If you handle it on your own, learn what to do and be decisive about it.
However we can help you — figuring out the best option for you or hiring us — call us at 205-879-2447 and we’ll be glad to set up a call or video chat or in person meeting for your case with PRA anywhere in Alabama. Or you can contact us through this website and we’ll be glad to get back with you ASAP.
I’m being sued i just got served this morning i’m current;y in phoenix,az please let me know if you can help. The company is PRA thanks.
Rickeisha,
I don’t practice in Arizona so I can’t help you — do get with a consumer lawyer in AZ to help you with this lawsuit. Portfolio Recovery Associates files a lot of lawsuits around the country and when they do sue us we must take it seriously as they are counting on us to do nothing.
Keep us posted on how your case goes and best wishes!
John Watts
I was Sued in an other state that I have never lived in. Now its on my credit report for a judgement..what do I do
Susan,
The first question is were you properly served in this other state? If you never lived there, then probably not.
Second, if you were properly served, did the other court have power (jurisdiction) over you? Again, not likely unless you agreed to be sued in this state in the contract.
You need to get with a consumer lawyer in your state ASAP to find out if you can challenge this ruling. We have gotten rid of judgments from even 15 years before where our clients were not actually and properly served — without being served the judgment cannot stand.
Once you get rid of the judgment, then you tell the credit reporting agencies (Equifax, Experian, Transunion, etc) to get rid of it. Either they do or you sue. When you sue — as we often have on this exact situation — they get rid of the judgment and pay you money damages.
I hope this helps and if you were sued in Alabama feel free to let us know and we’ll be glad to help you.
John Watts
For PRA to actually win a case in court do they need a copy of the original contract from the original creditor signed by the person being sued. Or is an affidavit from someone claiming to be from the original creditor saying that you had an account there good enough ?
Pete,
This depends on state law but normally in Alabama they will need several things:
First, proof that PRA owns the debt. That it bought the debt from the original creditor. Or that it bought the debt from another debt buyer and also prove that debt buyer bought the debt from the original creditor. This needs to be done normally by the actual contracts and by witnesses testifying.
Second, PRA needs to show that you took out the loan. There may not be an actual “original contract” signed by you as it may have been done over the phone, etc. But some type of proof is needed — it may be asking you questions under oath about whether you took out the Chase card or Capital One card, etc.
Bottom line in Alabama is I see debt buyers such as PRA struggle to prove they own the debt.
If you haven’t already, feel free to watch our 24 minute video on your 5 options when sued in Alabama. After you watch that, if you have any questions, give us a call at 205-879-2447 and we’ll be glad to chat with you.
Best wishes
John Watts
In California do they need the contract signed by you to win a case? Being sued by portfolio recovery. What if it was done over the phone with capital one? And also what if you have an open up to date account with capital one currently as well? Are they required to provide all documentation they have in the papers you were served with? They only provided 2 billing statements from capital one in the paperwork I was served in.
Steph,
I really have no idea about the rules in California — I practice in Alabama.
As a general rule, a written contract signed in ink is not normally necessary as so many contracts are done over the phone, etc. You do need to know what your state law requires. A consumer protection lawyer in Alabama could give you that answer.
Sorry I don’t know more to tell you — but each state is different.
Best wishes!
John Watts
South Carolina
PRA has been calling my 86 year old mother’s (who is in bad health) house on a Time – barred debt looking for me. They call me on my cell phone and I have spoken to them. They have no reason to call her number since she has told them that I don’t live there which is true. My understanding is that once they have my contact info they have no reason to be calling her house. I intend to send them a letter stating that I do not wish to be contacted by them again. Or is a fax receipt proof enough that they have been notified.
Thanks,
Brian
Brian,
Thank you for your comment.
You are correct that once Portfolio Recovery Associates (PRA) has your contact info, then it has no right to contact third parties. Especially your 86 year old mother.
If PRA is doing this, then you need to look at suing PRA in federal court if the Fair Debt Collection Practices Act (FDCPA) applies — it normally will as long as the alleged debt (whether you owed it or not) was “consumer debt” and not “business debt.”
If the debt is “time barred” then PRA can not sue you. Or it violates the FDCPA.
It cannot threaten to sue you. Or it violates the FDCPA.
You need to check your credit reports at http://www.AnnualCreditReport.com to see if PRA is reporting on your credit reports after the time limit to credit report which is basically 7 or 7.5 years after you supposedly defaulted on the debt. If PRA is reporting after this then that is also normally a violation of the FDCPA.
As far as sending them a letter you can send them a letter telling them to “cease” communication or that you refuse to pay (has the same effect). If they are calling your cell you can tell them not to call your cell. Do keep in mind that if you did not give PRA permission to call your cell and you did not give the original creditor permission to call your cell, then normally every call to your cell phone will be a violation of the TCPA (Telephone Consumer Protection Act).
This entitles you to a minimum of $500 per call that violates the law and up to a total of $1500 per call (if the violation was intentional).
If you live in South Carolina, I can recommend a lawyer for you.
If you live in Alabama, feel free to give us a call and we’ll be glad to chat with you about potentially suing PRA in federal court. We currently have multiple cases against PRA and will be filing two more this week or next week.
Best wishes and let us know if we can help you — call us at 205-879-2447.
John Watts
We live in the Atlanta metro area. In the past 2 days, my wife has received 5-6 “Legal Advertisements” from attorneys telling her they can help her with the suit filed by Portfolio. She has not been served with any papers about a suit; so, I guess these attorneys are seeing something that she is going to be served. I would like to get ahead of this, if possible. Do you practice in Georgia, or can you recommend someone who approaches suits from PRA the way you do? Thanks.
Thomas,
If you are getting the advertisement letters then I think the suit is right around the corner.
I am not licensed in Georgia so when I work over there it is with a licensed Georgia attorney. We are often brought into cases in federal court to help resolve them or try them.
I recommend my friend and a great consumer protection attorney Steve Koval:
The Koval Firm, LLC
3575 Piedmont Road
15 Piedmont Center Suite 120
Atlanta, GA 30305
Tel: 404.350.5900
You can also read the transcript of an interview I did with Steve a number of years ago — here is the first part and I believe it has the links to the rest of the interview:
http://www.alabamaconsumerlawblog.com/2012/08/watts_koval_discuss_debt_colle.html
Best wishes!
John Watts
I was served yesterday and I am scared I am being sued for 2682.00 and have a court date in 2 weeks. should I hire a lawyer? I have tried to call the lawyer that is taking me to court 5 times and not have returned my call.
Will I be able to make payments to pay off the debt?
Sandy,
If you live in Alabama you can handle this lawsuit — either fight it on your own or hire a lawyer to do this. Here is an article (and a very long but informative I hope video) on your options.
https://alabamaconsumer.com/2014/09/5-options-sued-debt-collector-alabama/
You can also call my office at 205-879-2447 and ask for Carolyn who can set us up a call. Normally paying on these debts is not your best option but we can discuss it.
If you live outside of Alabama you need to get with a consumer protection lawyer in your state.
Best wishes!
John Watts
I was sued by PAR and I was not served, but appeared in court to ask for extension. went on 2nd date asked for another extension, judge did not grant it, I was then told I had to go to trial if I did not admit the debt.So I filled out the form of grounds of defense due a month before the trial, with three objections, time had expired, (which I think they would have had me on since they filed before the end date), lack of actual knowledge of the debt on the part of plaintiff, and no standing in court due to lack of affidavit of service. I also added that my income was exempt. I am not sure what worked but today I received a non-suit from PAR.
The judge told me on my first court date that the lack of service did not matter since I appeared in court.
This debt was for less than a thousand dollars.
Liz,
First — congrats for taking action!!
Second — that’s great that the case is dismissed.
I’m assuming you are from outside of Alabama? Usually we don’t use the expression “non suit” but my understanding is that this is where the case is dismissed withOUT prejudice. If so, they may can sue you again but at least this case is done with for now.
Each judge can be a bit different but you stuck with it so great job!!
You might check your credit report to see if PRA is now reporting your debt as “disputed” since you filed an answer disputing/denying the debt.
Best wishes!
John Watts
I live in Florida. Do you practice in the panhandle?
I’m sorry I don’t but contact Eric Stevenson — 850-444-0000 — he should be able to help you.
Best wishes!
John Watts
I am working on my Grounds of Defense form in VA. Do you have any recommendations for a like minded law firm that I might call upon here in Northern Virginia? Thanks for what you do. These junk debt buyers are destructive in their preying on those that struggling to make things right in a legitimate way. Thanks again.
Coach
Coach,
Try Jason Krumbein — I think he practices in the entire state of Virginia. Call him at 804.673.4358 — he’s a good guy who can help you or refer you to someone who can.
Best wishes!
John Watts
ps — you are absolutely right about how these debt buyers prey on folks — keep fighting them!
My husband and I started the process for purchasing a home which means we are working on our credit. The original creditor was listed as well as portfolio recovery but for a different amount. (Only $1 difference) but portfolio recovery has the original creditor listed. It has been on his credit since 6/16 with no real contact from them except occasionally a few phone calls which he never answers. Since the dispute he has received two offer letters to settle and then finally a letter stating they have validated the debt with a copy of a statement with his name listed only in the section that shows for mailing purposes. After disputing again we receive a letter from a law firm saying not to pay portfolio recovery and to began making payments to them and that we had 30 days to respond to the letter. On Monday I will be sending them the validation letter and other suggestions should I send portfolio recovery another dispute letter? Should I be preparing for court? I did file a complaint with the cfpb and the bbb against both companies awaiting a response. Also have collection shield disputing anything else I should do?
Joy,
Simple answer is you may be close to a lawsuit so I would get with a consumer protection lawyer in your state (call us at 205-879-2447 if in Alabama).
Here’s a more detailed response/thoughts for you:
1. Is the original creditor showing a current balance of zero or does it show more than zero? Should not have original creditor AND debt collector both showing a current balance as it is deceptive. Makes it look like you owe twice as much. So if you find that, I would dispute through the credit reporting agencies on the original creditor showing a balance.
2. Is the law firm licensed in Alabama (I’m assuming you live in Alabama)? If so, then quite likely about to be sued. You can let us know who it is and we can tell you if they sue in Alabama.
3. If you send a dispute letter to collection lawyer I would also send it to Portfolio — remember to do certified mail and keep signed copy.
4. You need to go back and look at dispute letter previously sent to Portfolio. When was that and compare that to the date of updated credit reporting by Portfolio Recovery on your credit reports. Does it show your account as “consumer disputes” or something similar to that?
Keep fighting and figuring out what’s happening as Portfolio often does sue so you need to be prepared for that.
We’ll be happy to help if you are in Alabama — we can go over your options with you.
John Watts
205-879-2447
So I was not served with papers but a family member notified me that the local court left a card for me to call. Once I did the guy told me I was being sued for debt with PRA from like 2013 I said ok well I haven’t lived at that address in over 10 years so never received anything in regards to the debt from PRA. A firm was hired to handle the case Cooling and Winters I contacted them and told them I no longer lived in that state of SC I currently reside in Idaho and they told me they had to close the account in their office. So then I call PRA and asked how do I pay this debt they told me I had to talk to the law office so I called them back and the law office said they couldn’t handle it because i don’t reside in SC. After the run around for about 3 hours they gave me a different number to call and Portfolio and I was able to set up to pay the account in full. How can I be sure they will withdraw this insane attempt to take me to court without even notifying me of the debt. I have received no official papers from the court but PRA said I will receive a letter stating the account has been paid in full and they will send the info to the court.
I do not want a judgement and also I want the case dismissed not shown up as settled on court records.
Do I need to hire an attorney to show up the day of the case just in case the other parry shows up even though i have already paid the debt.
Misha,
I would definitely talk to an attorney in South Carolina about this to make sure it gets handled correctly. You are absolutely right — you want the case dismissed.
And to make sure on your credit reports it shows up as a zero balance (if it shows up at all).
It is crazy that you have to do this but I think to be safe you should at least talk to a South Carolina consumer protection lawyer to protect yourself from Portfolio.
Hope that it works out and let us know what happens.
Thanks!
John Watts