A client called me about 2 months ago after being sued for $3100 in the Special Civil Part of Bergen County, NJ by a purchaser of delinquent debts called Portfolio Recovery Associates.
Her original debt was with Dell Financial Services. It was a Dell “credit card” which could be used to purchase Dell computer systems and products. My client had not made a payment on the account since September 2010, and the lawsuit was filed in December 2014.
As I’ve stated in previous blog posts here, the Statute of Limitations in New Jersey for most bad credit card/contract debts is six (6) years from the date the agreement was breached- i.e, the date you make the last full payment on the account.
However, this particular case fell into a somewhat obscure exception to New Jersey’s 6-year Statute of Limitations. My client’s Dell charge account card did not bear a Visa or Mastercard logo. The Dell card could ONLY be used to purchase Dell products- it could not be used like a regular credit card. It was in effect like those old department store charge accounts.
This is important, because the law views accounts such as these as a “sale of goods” under the Uniform Commercial Code (commonly known as the U.C.C.). When my client used the Dell card to buy a computer and printer, she was essentially entering into an installment payment plan on the goods.
The original Dell Financial Services cardholder agreement admitted as much. It contained language about possible re-possession of the computer system for non-payment, and contained UCC language to that effect.
Most importantly, the State of New Jersey has a separate set of laws which govern transactions under the UCC- including a 4 year Statute of Limitation for lawsuits brought in UCC actions.
After filing an Answer to the complaint (wherein I pleaded expiration of the Statute of Limitations as an affirmative defense), I next filed a Motion for Summary Judgment which cited the U.C.C. 4 year Statute of Limitation and attached a copy of the original Dell agreement as an exhibit. Because my client had made the last payment in September 2010 and the lawsuit was not filed until December 2014, it had been 4 years and 3 months since the Statute of Limitations began ticking. The suit was filed 3 months too late.
After reading my Motion, the attorneys for Portfolio Recovery Associates decided to dismiss their Compliant with prejudice rather than oppose my Motion. My client didn’t have to pay a dime to Portfolio Recovery Associates.
The above story illustrates why it is so important that you retain an experienced debt defense attorney as soon as possible when you’re sued by a debt collector in the NJ Special Civil Part or the NJ Law Division. Certain affirmative defenses such as the Statute of Limitations may be waived at trial if not properly pleaded early in the case and properly litigated via Motion practice.
Call me at 908-782-5313 if you’ve been sued by a debt collector. Initial consultations are always free, and our rates are very reasonable.
Fighting a NJ Special Civil Part lawsuit without an experienced debt defense attorney is penny wise and pound foolish. If you lose the case and the plaintiff obtains a judgment, they can levy your checking accounts, garnish 10% of your wages, and put liens on your NJ real estate. Don’t take that chance- call me TODAY for a free consultation !
Also see the many testimonials from my satisfied clients here.
We routinely defend New Jersey Special Civil Part and Law Division part collection cases against debt buyers:
Cavalry SPV I LLC
New Century Financial Services
Portfolio Recovery Associates
Midland Funding LLC
and many others.