Beginners Guide to Understanding Debt Collection Lawsuits Filed by Portfolio Recovery Associates in Arizona

Portfolio Recovery Associates (“PRA”) is a debt buying company that purchases old, charged-off debts and then tries to collect on them, often by filing debt collection lawsuits.  Portfolio Recovery Associates is one of the largest consumer debt buyers in the United States.

Last year Portfolio Recovery Associates agreed to settle allegations in the state of New York that they continued to pursue consumers even though the statute of limitations had expired on the debt.  The settlement was entered into by Portfolio Recovery and Sherman Financial Group for a total amount of $16 million dollars as well as $475,000 in penalties.

Portfolio Recovery Associates in Arizona

PRA is one of the largest and most active debt buyers in Arizona.  Each and every month it files hundreds to thousands of debt collection lawsuits against Arizona residents.  Most of the debt collection lawsuits end in a default judgment against the consumer because people simply fail to take action.  In this article I want to go over some of the initial steps that you must take if you want any hope of winning your case.

You’ve Been Served!

Getting served with a lawsuit can be a really unsettling experience.  It feels like such an invasion of privacy to have some process server knock on your door (usually at a late or very early hour) and drop off a lawsuit.  As stressful as this event can be, it is important to keep your head and write down some very important information.

First, write down the day that the process server dropped off the summons and complaint.  This date will become very important in calculating when your written Answer is due with the court.

Next, count out 20 calendar days (including weekends) and circle that as your due date for the Answer.  In Arizona you have 20 days to file your written response.  If you don’t do it you run the risk of having a default judgment entered against you.

The Answer

In order to avoid a default judgment by Portfolio Recovery you need to file a written Answer that responds to the allegations contained within Portfolio Recovery’s complaint.  The Answer must be filed within 20 days from the day you were served.  While some people will start this process on their own, it is my recommendation that you at least speak with a consumer rights attorney before you decide to represent yourself.  Attorneys like myself fight these junk debt buyers all day long.  There can be real value in having an experienced fighter on your side.  I have seen many, many people who decide to go it alone, draft the Answer, and admit to a bunch of stuff they shouldn’t have and frankly didn’t need to.

If you live in Arizona I am happy to meet with you for free to discuss your options.  If you don’t live in Arizona and need help I would recommend you find a consumer attorney in your hometown through the National Association of Consumer Advocates (naca.net). There you can find a lawyer who deals with junk debt buyer cases on a daily basis and give you the best chance of winning.

How Good is My Case?

While all Portfolio Recovery Associate collection cases are pretty similar, you won’t know how strong or weak your case is until they provide you with their Initial Disclosure Statement.

In Arizona there is no such thing as “trial by ambush”.  Each side must disclose the names of all of their witnesses, disclose all of their documents and other evidence they intend use at trial, and disclose what legal theories they are suing you on.  This is required to be exchanged by the parties within forty (40) days after the Answer is filed with the court.

Once you receive the Initial Disclosure Statement from Portfolio Recovery Associates you will have a much better idea how strong your case is and more importantly how weak Portfolio Recovery’s case is.

Is Trial a Good Option?

If the evidence, or lack thereof, you receive from Portfolio Recovery in their Initial Disclosure Statement is lacking then trial may not be a bad option.  Before a judge can grant judgment against you Portfolio Recovery must prove that you (1) had a contract with the original creditor; (2) prove what amount is actually owed; and (3) prove that your specific account was actually assigned/transferred to Portfolio Recovery.  If, based upon the evidence they have disclosed, can do that, then trial is not a bad option because you have a good chance of winning.

However, if the evidence they disclose is strong and admissible at trial, then you may want to consider settling the debt by offering Portfolio Recovery an amount that is less than what they claim is owed.

The important thing to remember about trial is that it is an all-or-nothing end to your case.  The court will not find some number in the middle and make you pay that.  You will either win your case outright and owe Portfolio nothing, or you will lose and get hit with a judgment for the full amount.

If you have been served by a lawsuit from Portfolio Recovery Associates or if you are right in the middle of your case and are stressed out of your mind, give me a call.  I can help.  I handle these cases all of the time and there are many different options to bringing the case to a resolution.