3 Immediate To Do’s When Sued by Portfolio Recovery Associates

Learn Who Portfolio Recovery Associates Really Is

It has been wisely stated that one should know one’s enemy so let’s get an understanding of who/what Portfolio Recovery Associates really is. Actually, there are a couple of related entities.

Portfolio Recovery Associates, LLC

A debt buyer. Portfolio Recovery Associates, LLC is a bulk purchaser of defaulted consumer credit card debt. As with many other companies in the debt buying industry, it is widely considered to be a predatory company that prospers in direct proportion to the degree that consumers fail to respond to unsubstantiated collection lawsuits, as corroborated by legal enforcement activity against the company in 2015 by the Consumer Financial Protection Bureau. Portfolio Recovery Associates, LLC is owned by publicly traded parent company, PRA Group, Inc.

PRA Group, Inc. (NASDAQ: PRAA)

Publicly traded debt buyer based in Norfolk Virginia, which operates in America under puppet companies, including Portfolio Recovery Associates. The company’s modus operandi is to mass file unprovable credit card collection lawsuits, without the ability to prove that it owns the underlying accounts and without the ability to prove the legitimacy or the amounts of the underlying debt. The business model is entirely dependent upon consumers failing to properly respond to lawsuits, thereby enabling PRA and its puppet companies, including Portfolio Recover Associates, LLC to obtain default judgments in cases where consumers could easily have prevented this from happening.

First Distinguish Between Being Sued and Receiving a Letter

This article primarily addresses what to do when you have been sued. Being sued is different than simply receiving a collection letter. If you have been sued, then probably somebody came to your door and handed papers to you. Whether you were personally served or not, the papers look different than an ordinary letter, and one of the papers will say that it is a “Summons”.

Alternatively, if you simply received a letter in the mail, and it looks like an ordinary letter, it is not the same as a lawsuit, i.e., it is not the same as being sued. You can check out my thoughts about responding to simple collection letters, here.

If You’ve Been Sued by Portfolio Recovery Associates Do Not Call Them and Do Not Talk to Them

I know, technically this is a “to-don’t” rather than a “to-do” but I’m still counting it as one of the three. (For more “don’ts” here is a list of the five most common mistakes consumers make when they are sued.)

Think about it, after you’ve been sued by Portfolio Recovery Associates, LLC, then in any conversation the objective of Portfolio’s representative is to get you to give it money; money that you and your family are relying upon. It is easy for Portfolio Recovery Associates, LLC to mislead you, because as the debt collector that just sued you, Portfolio Recovery Associates and its attorneys are on their home turf, and you, my friend do not know the territory or the rules.

Remember that great scene in “Escape From New York” where Snake Plissken (Kurt Russel) faced off against some tough guys? Here’s how the scene went:

Don’t be like those tough guys.

It is true that when you are sued by Portfolio Recovery Associates, and when you then talk with the good people employed there, they may offer you a “deal” to settle right away. Who knows, maybe even 50% off if it’s a big debt.

But, there are strings attached that will strangle you (as you will find out after you foolishly electronically transfer your first payment) and Portfolio Recovery Associates will then soon have a judgment against you for the full amount.

You’ll be scratching your head asking “how did that happen, I thought we had a deal?”

You may then hear the sound of Snake’s tin can hitting the ground.

Be Cautious When Hiring Someone to Help You

There are people out there (some of them attorneys) who are glad to charge you lots of money and do absolutely nothing for you. There are companies that focus on “debt settlement” where they will ask to see your credit report and try to do a sales job on you to address your “whole financial scene” when in fact you called to focus on a single compelling problem, namely that you have been sued.

You’re not looking to be sold on expensive services that you do not absolutely need this minute.

Let me tell you a little secret: In a pinch you could represent yourself.  Of course, you still need to know how to do the paperwork, and have some sense of the strategy and tactics involved when deciding what to write.

It does help to talk to somebody who knows what they are doing in this regard, and can save you a lot of time, but ultimately you could do it yourself, and that’s better than going with somebody you don’t trust. (Obviously, the best option is to hire somebody you do trust).

File a Response With the Court Within 30 Days (or Hire an Attorney)

You must file a response with the court within 30-days of when you were served with the lawsuit. Portfolio Recovery Associates wants one thing more than anything else: They want you to fail to get your answer filed in time.

If you fail to file a timely response, Portfolio Recovery Associates may be able to get a “default judgment” against you. That means, without your input, the court will give Portfolio Recovery Associates a judgment against you for the full amount it is asking for. Portfolio Recovery Associates can seek a judgment against you as soon as you blow the 30-day deadline. Even if a later court hearing date has already been scheduled.

Don’t blow the deadline.

Remember, even if you do properly represent yourself, it is possible for a biased trial court to hand an unearned victory to Portfolio Recovery Associates, so that is another good reason to hire an attorney to represent you, because a good attorney will also protect your ability to appeal if necessary.

I’m attorney, Ian Chowdhury and I defend California consumers against debt-collection lawsuits. Find out how to schedule a free 15-minute virtual consultation.