Can a creditor sue you in a different state?

[GoingDown]

Can they do this without serving the defendent? Do they expect the alleged debtor to travel cross-country to attend the proceedings? This just doesn't make sense.

I live in Arizona.

But Capitol One sued me in Virginia.

They sent me a summons by certified mail.

Of course, I didn't show up in Virginia.

They won a default judgment against me in Virginia.

They called about the judgment, telling me they were going to take my house and my boat and garnish my wages. I laughed. I don't own a house or a boat, and I don't have wages.

So far, they have collected zero dollars of the judgment against me. And the Arizona statute of limitations for judgments is 5 years, so they are almost out of time to do anything about it.

So far, they have not bothered to "domesticate" the judgment in Maricopa County.

Like it would do them any good anyways.

[catleg]

I just got a "complaint" from NAF - the National Arbitration Forum, suing me for a Chase Account by Mann Bracken. Chase still owns the debt, I think.

This is for all practical purposes the same thing as being sued out of state.

I figure I have no chance of winning in NAF, I will have to take my chances on fighting them off from getting a court here to honor their judgment.

Incidentally, I DV'd and C&D'd them a few weeks ago, not sure if that had anything to do with it. This is one of my cards with the longest time in default, so it was probably due to come up.

[catleg]

This case was kind of a victory for the consumer, as she appealed and got a summary judgment from special civil court, which is a very creditor friendly court, overturned.
This looks almost like a roadmap on how to fight them.
http://lawlibrary.rutgers.edu/decisi...26-07.opn.html

Oh, and unfortunately, I signed for the Fedex envelope, not expecting to be served by Fedex!

[treehugger1]

Catleg, This is probably why so many states now have their own "arbitration" rules. I think the state's rights prevail as long as the arbitration is fair to both sides. In Oregon, any civil case under $50K is sent to mandatory arbitration. If the defendant agrees, then there are costs involved, but if your broke, who cares. Opt for the arbitration and gain another few months. The arbitration cases here seemed to be backed up for months!

Here, the case is only sent to arbitration if the defendant files an answer to the orignal complaint. This costs $180+ dollars. However, if one has solid wages, this might beat an additional 2-4 months of wage garnishment under a default judgment.

I am not shocked that any non-local creditors/CA's/JDB's have sued me. They certainly run a risk of the defendant answering a complaint. I have one out-of-state creditor attempting to collect through a local (in-town) CA. But the local CA knows I will answer any and all local complaints (summons.) In addtion, the OC has told me via recorded phone call, that they have NOT sent my account to the particular CA. They did send the account to their CA (unregistered in my state,) and this CA forwarded the account to my local CA. I'd have no problem arguing that the original CA cannot assign a debt to my local CA since the original CA cannot even do ANY business in my state.

On the other hand, I suppose the original CA or OC could sue me int he out-of-state jurisdiction and get a default judgment that could be domesitcated here. They still need to serve me here. And, without proper service, I doubt the local circuit judges would order wage garnishment. The laws in Oregon are very, very detailed in what serves as a proper wage or bank garnishment writ.

[catleg]

Yeah the whole thing is kind of bizarre, I don't see the benefit of the NAF if they have to file suit here to get the judgment to stick. There is a "complementary mediation" thing here in NJ but I'd guess it only gets used by the small minority of real disputes, customer vs business cases. The creditors bar just goes for the throat with their case management systems.

[Worried Mom]

I live in Arizona.

But Capitol One sued me in Virginia.

They sent me a summons by certified mail.

Of course, I didn't show up in Virginia.

They won a default judgment against me in Virginia.

Why did they sue you in another state if they had your correct address? Most folks who are being sued for an alleged debt do not have the funds to travel across the country. This is all kinds of wrong.

[BigJohn]

I live in Arizona.

But Capitol One sued me in Virginia.

They sent me a summons by certified mail.

Of course, I didn't show up in Virginia.

They won a default judgment against me in Virginia.

They called about the judgment, telling me they were going to take my house and my boat and garnish my wages. I laughed. I don't own a house or a boat, and I don't have wages.

So far, they have collected zero dollars of the judgment against me. And the Arizona statute of limitations for judgments is 5 years, so they are almost out of time to do anything about it.

So far, they have not bothered to "domesticate" the judgment in Maricopa County.

Like it would do them any good anyways.

Was this a business loan?

[treehugger1]

I won't go into detail, but my understanding is that many CC agreements (those you agree to by signing off on the first purchase) state the laws of "such-and-such" state apply (Delaware and S. Dakota are what I read in some of my CC agreements.) Interestingly enough, a couple of the states listed on my original agreements have 2-3 year shorter SOL's than my state does. One CC is within a few months of the SOL for the state they claimed that the laws will apply. LOL. I think there is some case laws out there that refer to the strategy of suits out-of-state. If I remember correctly (my age is waning,) some states honor the agreement and others do not under various rules of civil rules of procedure.

One would think that a reasonable argument to shut down a judgment under such circumstances would be to argue before yoru own state courts that you were never a citizen, nor did you ever incur any debt in Delaware, S. Dakota, etc.

Who knows how the CC's go about this, but it has been attempted. Just goggle the topic. I would think it is pretty rare, and depends upon individual state laws.

In the end, it really doesn't matter. You can pull the BK plug and vacate the judgments upon discharge. In some states you can file the papers with the appropriate court by yourself, without paying your attorney to do it.

Is the zombie debt/judgment issue all that big? I don't know, but we all know how the media can take a few small cases and blow this up to epidemic proportion.

But, again, there should be no surprise judgment rendered against you no matter where you live. Proper service is required in all states. What is "proper" varies from state to state.

[catleg]

BB, Now that you mention it, the NAF complaint states that Delaware law prevails. But NJ law also has a 6 yr SOL on open ended contracts. So what is to gain over directly going to court in NJ, except maybe this is because Mann Bracken doesn't appear to have any offices in NJ? Most Chase matters here involve in house counsel and a couple of "distinguished creditors rights" attorneys such as Pressler & Pressler, Goldman Warshaw etc.

And you are very correct in that a major part of any lawyers education involves so-called "conflict of laws" training. In other words, what court and whose laws and rules of court apply. At one point while google searching I found a nice course syllabus and sample final exam on that.

[optimistic1]

The Uniform Enforcement of
Foreign Judgments Act.

http://www.ccaacollect.com/images/enforcing.pdf

Definetely possible for sure.

[treehugger1]

I spoke to legal counsel today in an attempt to get a definitive answer to NAF arbitration. My understanding (and, I could be wrong) is that after congress allowed the arbitration-type process, some states enacted laws to increase protection for their citizens. Again, it is my understanding that in many civil matters state's rights prevail. As an example, The FDCPA does not apply to OC's in many states, but in my state, we have laws that mirror the FDCPA and also apply to OC's. So does Washington and a few other states. MY UNDERSTANDING in my state is that a consumer here is NEVER required to waive their rights to a jury trial.

In general, my take is that states can enact legislation that increases the protection for consumers. The states cannot enact laws that decrease the protection afforded to the consumer under Federal Law.

Other examples are also found in the wage garnishment issue. The Fed's allow 25% of disposable earnings or some minimum related to the minimum wage laws. While one would think this is the LAW, it is not true. Several states have wage garnishment caps under the 25%, and some states don't even allow wage garnishment.

In criminal situations, this can be quite different.

Now, I don't know how one goes about responding to a NAF request and ask that such a matter be sent to my state court system, but it appears the statutes here allow for such a request. My state statutes include "mandatory" arbitration" for civil matters less than $50K. This statute came into being after federal arbitration law. I am guessing that the state statute was enacted to protect the citizens of Oregon from federal mandates. The consumer is required to undergo arbitration, but suit must be filed first.

I'm not an attorney, but I was informed that there are almost no attempts to use the national arbitration ruling in this state.

On the other hand, I can be sued by an out-of-state attorney out-of-state. A judgment can be rendered and then "enforced" in my county. It would be up to me to question proper service, etc. Regardless of whether or not a foreign judgment was obtained, the procedure leading to the judgment probably has to conform to my state statutes in order for the judgment to be enforced.

[treehugger1]

I have to add the following. In Oregon, one can agree to the "Oregon Arbitration Act" or the "Federal Arbitration Act." It appears the Oregon Act has far more protection for consumers than the Federal Act. Again, it would be up to the consumer/citizen to even know such an option is available. Again, not giving legal advice here, but check your own state laws. Do the due diligence.

[GoingDown]

Was this a business loan?

No, it was a regular credit card (Master Card) with a lousy $300 limit. I guess they figured over $300 they could save some money by suing me in their home state of Virginia.

They are the only ones who have ever sued me.

And to the other person who asked a question... No, they did not have my street address for a process server. They did have my P.O. Box address.

My guess is that this was an effort to try to scare me into paying by using a big scary lawsuit to frighten me. They called numerous times after they got the default judgment warning me that they were going to garnish my wages, or sell my house at an auction, etc. I figure they were reading from a script of some kind. I don't have a house. I don't have wages.

One time they sent me a new credit card application for me to sign, which came with the balance from the old charged off credit card, plus court costs, legal fees, plus interest, plus $25 in new credit to spend! Yay! $25! How stupid do they think I am? I tore it up and threw it away.

I think it's a gimick they use with very low balance charge offs.

But it was not very effective. To this date they have received zero dollars from me.

They have stopped calling me and no longer send me anything in the mail.

[Proxy]

??

Hi all,

While reading all this about being served "properly" , would it be better to get a PO box at a post office, rather than have my mail forwarded to a friend's home address? I may have to postpone filing BK for a year(have to leave the US for a year August -2009 to summer 2010) and am afraid of being sued while I am out of the country. I will have a friend check my PO box to get mail for me.

Btw, how does one go about checking th court for possbile judgements? I am in the East District (for BK) in Northern CA.

Thanks for your help!

[optimistic1]

Which county do you live in? They may have public access to court info available online.

I would change your address to the post office, otherwise they might see it as being properly served if your friend answers the door, but, if you change the address, they may still go to his house for all you know.