Recently, a NJ client called me who was sued by a plaintiff named “Cavalry SPV I, LLC,” who had apparently purchased a book of old charged-off credit card debt accounts from GE Retail Bank/ Lowes Consumer Credit.
My client has a vague recollection of once having had a Lowes credit card several years ago, but no longer had any of the paperwork related to it. The plaintiff (Cavalry SPV I. LLC) was suing her for $7800. It was a typical Special Civil Part collections complaint, with scant info other than the last 4 digits of the alleged account number and the defendant’s name and address.
Thanks to my representation, she ended up paying a total of 0 (zero) dollars on this lawsuit, as the entire case was recently dismissed by the Hunterdon County Superior Court, Special Civil Part. Here’s why:
The defendant called me about 5 days after she was served with the Complaint via certified mail. After she paid my $375 retainer fee, I promptly filed an Answer to the complaint, along with about 20 interrogatory questions for the Plaintiff’s law firm to answer. (“Interrogatory” is a legal term for a numbered list of written questions and demands for documents which the Plaintiff must answer both in writing and certify under oath).
It’s important to note that in most cases these questions must be answered by someone working for the original creditor with personal knowledge of the ORIGINAL debt. For example, a record custodian, account manager, or other employee or officer of GE Retail Bank/Lowes Consumer Credit, who can testify under oath about the accuracy of the information.
The beauty of this is that when these delinquent or “charged off” debts are sold “down the line” to assignees (usually collection agencies such as Cavalry SPV, New Century Financial, Jackson Capital, Midland Funding, etc) for lawsuits/collections, the debt assignment package usually only includes a spreadsheet with the last known address of the debtor, the date the account went delinquent, the dollar amount of the delinquency, and other “skeletal” information.
I always demand in my First Set of Interrogatories that the plaintiff produce a copy of the original card-holder agreement or original contract, the original account statements/bills (which must show the interest rate and other relevant information), the date that they purchased the debt from the original creditor, the amount they paid for the debt, and other relevant information & evidence. Since they’re the ones ASKING for money, it’s only fair that they prove beyond a doubt that they are actually the ones entitled to receive the money ! The New Jersey Appellate Division agreed in the landmark 2011 case of L.V.N.V. Funding vs. Colvell, A-1313-10.
Here’s when the collection agency usually runs into a major problem under the judicially required Colvell standard of proof: this original paperwork about your account is often not available to the collector, because as explained above, debt buyers/collection agency assignees usually pay pennies on the dollar for bad debt, and receive very little information about your original account. The full package of paperwork (cardholder agreement, billing statements, etc) is called “media” in debt collector lingo.
Sometimes this “media” is simply lost or unavailable, as the original creditor has already sold the delinquent account “down the line” for pennies and have no further interest in “helping” a collection agency try to recover additional money on the case. Other times the “media” is available for certain books of debt, but obtaining it costs the collector extra money and may take significant time to obtain. On smaller lawsuits ($2500 or less), it often just isn’t worth the collector’s time and hassle to chase this old paperwork down, especially when an aggressive attorney like myself is nitpicking every shred of paperwork trying to find deficiencies/holes in their proofs.
So what happens if the plaintiff fails to respond to my Interrogatories and fails to produce the documents I demand?
Under the NJ court rules for Special Civil Part, the defendant usually has 30 days to answer the interrogatories and produce the documents. If I haven’t received anything by day 25, I send a “good faith” letter as required by the NJ Court rules to “remind” them that their answers are due.
If the 30 days run out and I still don’t have their answers, I file what’s called a “Motion to Dismiss the Complaint for Failure to Answer Interrogatories.” In this motion, I attach a copy of my Interrogatories which the plaintiff has failed to answer, a copy of my “good faith” reminder letter, and the certified mail postcards to prove I sent (and plaintiff received) my papers. The judge then reviews my motion.
The Plaintiff then usually is given 10 more days to either answer the Interrogatories, or else the Complaint (i.e, the entire lawsuit against you) is dismissed altogether. That’s what happened in the above case with GE Retail Bank/ Lowes Consumer Credit.
The law firm that filed the complaint is a smaller operation which I’d never heard of. My hunch is that they simply weren’t willing to invest any time or effort into this case, as their business model is likely built around obtaining default judgments against negligent or forgetful defendants who fail to Answer their complaints, and then suffer the penalty of a default judgment.
It’s amazing the amount of calls my firm receives from clients deep in the “living hell” of default in NJ Special Civil Part. These folks are usually facing wage garnishments, levies on their checking accounts, liens on their home/automobiles, and other nasty consequences, all because they decided to ignore the original lawsuits filed against them. Sadder still are the cases where judgments are the result of poor/sloppy/incompetent legal representation, or those who opted to represent themselves and found out the hard way that NJ Superior Court judges have little patience for non-complying paperwork and unfamiliarity with both court rules and the doctrines of NJ evidence law. While NJ does have basic online forms to assist litigants without attorneys, these forms do not cover every legal situation and the Court staff cannot give you legal advice or opinions about your case.
The client described at the beginning of this blog post paid only my $375 fee for basic representation, and avoided getting slapped with a verdict or judgment of $7800. When it comes to debt collection defense, don’t be “penny wise and pound foolish.”
Call an aggressive and experienced NJ Debt Collection Defense attorney today at 908-782-5313 for a free 10 minute phone consultation about your case.
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