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Portfolio Recovery Lawsuits – Have they sued you?

Have you received a collection letter from Portfolio Recovery Associates? Have you been sued by Portfolio, either in Magistrate Court or the Court of Common Pleas? Please do not negotiate with them or make a payment to them until you have had a consult with our law firm or with another reputable consumer law firm. The consultation is FREE and there is no obligation to hire us. Don’t make the mistake of calling Portfolio first and then calling a consumer attorney second.  There are very few instances where I would recommend sending money to Portfolio Recovery and I certainly would never do so without first seeking legal advice.

Portfolio Recovery Associates is a company that buys bad debt to try to make a profit. They buy large groups of defaulted credit card accounts for pennies on the dollar (we have seen data that shows that their cost is approximately 1.7 cents on the dollar, though this can change from purchase to purchase) for the sole purpose of attempting to collect whatever they can on those accounts from individuals just like you. They file dozens of lawsuits daily in Pennsylvania in hopes of collecting on old debt claims that have been charged off by the original creditor. As of the date of this writing, April 2016, they are one of the largest debt purchasers that we deal with. They are so big in fact that they are a publicly traded company…buying bad debt is a very big business and it is very profitable for the buyers.

How Do We Defend Portfolio Cases?

If the lawsuit is filed in the Court of Common Pleas, then our approach to defending claims filed by Portfolio Recovery is twofold. First, we defend by making the argument that the lawsuit is legally insufficient or defective.  In almost every claim that I have encountered with Portfolio, the lawsuit was defective, at least at the initial filing. We make a statement to the court that says “we believe that this lawsuit is defective, and here is why”. Credit card lawsuits are based upon certain documents.  They need these documents, and they need stacks of them.   Your lawsuit should be as thick as a small phone book when you receive it, and it should include most if not all of your credit file. Necessary documents include Contracts, Terms and Conditions, Monthly Statements and Assignments, among other documents. Chances are that the lawsuit is not that thick and it is therefore defective.

In almost every instance, the court agrees with us that the lawsuit is legally insufficient.  In most cases, the court makes a ruling that Portfolio has to produce more documentation before it can move forward.

In the event that Portfolio Recovery Associates is able to cure the insufficiency objections, we then move on to defending the claim on its legal merits, i.e. whether you actually had the account, whether you actually defaulted on it, when the alleged default occurred, whether it is filed within the Statute of Limitations, et cetera. This is generally the only time that we consider settlement on a Portfolio case, that is, after they have provided us with substantial documentation showing that they own the specific account and that they can prove the exact amount of the debt. This occurs very infrequently. (Another settlement time would include settling a debt that is very small or if they have already obtained a judgment against you).

If Portfolio is NOT able to cure the defects, then the case is over.  This is a frequent result for our clients on these types of cases though it must be said that no law firm wins 100% of its cases.

What About District Justice Cases?

If the lawsuit is filed at your local District Justice or Magistrate, then our approach is slightly different. Magistrate court is a different animal, there are no briefs or motions or written responses to the lawsuits. We simply attend the hearing (you DO NOT) and defend using our instincts, knowledge of the law, and our stacks of precedential case law. PRA will likely not have a witness at this hearing and likely will not have all of the documentation that it needs to prevail. If the judge follows the law, you will win, period. If the judge does not follow the law, then you can appeal and the case can potentially be won at the next level.

Our firm has a great deal of experience in defending credit card collection cases whether they are filed by Portfolio Recovery or not. Credit card lawsuits are serious matters, this is not something that you should try to handle alone. If you have been sued in any Pennsylvania county by Portfolio Recovery Associates our firm can help you defend this claim at minimal cost with a great chance at success. Contact our office here, call me at 412-823-8003 or visit our Pennsylvania Credit Card Legal Center here.