I'm currently enrolled in a debt reduction program and have only one more credit card to pay off. We recently received a court summons on an account that was settled back in 2004 (according to the debt management company and the paperwork from the original debt collector-- National Financial Systems, Inc.)

The complicating factor is that I've moved a little over a year ago from California to Virginia, and the new debt collector has filed the case in California (even though this new company is located in Virginia). We faxed copies of the settlement letter and copies of the cancelled check that were provided by our debt management company) but the new debt collector still insists on taking us to court.

The new debt collectors are claiming the original settlement was voided because the payment was received late (according to them). The copies of the cashed check show it was deposited the day after the due date of payment.

Can we petition to have this case moved to Virginia?
How should we respond th the court summons in California?

Our debt management company has been dragging their feet, basically telling us that this new debt collector has no case-- it took 2 weeks to get the copies of the check. And now they are telling us they can not give any legal advise at all. What should/can we do?

You can try for a change in venue, but I do agree that the court will throw this out once they see the proof of payment.

So you may have to get a representative to go to the court in CA.

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Originally Posted by ScottGem

You can try for a change in venue, but I do agree that the court will throw this out once they see the proof of payment.

So you may have to get a representative to go to the court in CA.

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Not so fast. There may be some coincidental problems related to this. First was it settled or chargedoff? If settled then the new debt collector may be breaking Fair Debt Collection Practices act, and you can have it changed to a federal court, which they do not want. Even if the terms were not completed exactly the originator took your money. You may actually be able to countersue. Do not consider this legal advice as I am not an attorney. You should contact your attorney for such advice

However if it is a chargeoff account they can continue to collect on it, essentially the company that owned the debt said you can pay to keep us quiet but the debt exists. Credit Report FAQ - What is a charge-off

If the debt was truly settled then you should find the wording in your final receipt.

Given that the OP was working through a debt reduction program, I'm confident he is referring to a settlement. Especially since he refers to a "settlement letter" and terms of settlement.

The problem here is that the collector deposited the payment one day after the deadline. While that may give them grounds to sue, I seriously doubt if any judge is going to side with them on this. We don't know WHEN the payment was actually received, they could have gotten the previous day. And the fact that they cashed it and waited over 4 years to come back after him is just going to make a judge mad.

Not sure about the change to federal court if the suit was filed in small claims court, but its certainly worth a try to countersue as an FDCPA violation.

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Originally Posted by ScottGem

Given that the OP was working through a debt reduction program, I'm confident he is referring to a settlement. Especially since he refers to a "settlement letter" and terms of settlement.

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Granted however some recent evidence shows that these debt settlement companies are doing anything but settling. Because financial regulations are a little bit behind the times, some of these debt relief programs are doing things like buying the old debt, which is a settlement with the previous company, but now you owe the debt relief org. and they are telling the clients that they are settling the debt, which is true somewhat. Some also use different terms because they falsely believe, or sometimes try to prove, they are not under the same regulations as other FDCPA organizations. The debt relief company says that they produced a settlement when by the definition of the owner of the debt they consolidated or charged off the debt. And since the company has already shown that they either don't have a spine, or they are a little shady I am guessing that these are possibilities. Again, we don't even know if the debt relief company actually paid the original creditor (if they took the money and then paid the creditor). We assume all the literature is factual, but that assumption is based upon the assumption that the debt relief organization in question has not committed fraud of any sort. Any simple search on line will tell you if the debt relief organization in question has committed fraud in the past (don't trust the BBB on this since several court cases have shown local BBB complicit in fraudulent activities) there are a couple of whistleblower websites where people with complaints can voice their concerns.

In this case you may need to request a lawyer's help. There are some free law clinics that offer help regarding debt consolidation. In this case you may be able to contact the Virginia bar association to see if there is any legal aid for people who may be sued without due cause.