Chrysler Financial repossessed a vehicle of mine in May of 2007. I have just received a phone call about a week ago from a debt collector threatening to have Chrysler Financial file a lawsuit against me for the remaining debt plus interest. Is this something that can actually happen due to the fact that the suit has not happened as of yet and it's been 6 years since the vehicle was repossessed?
2 Answers from Attorneys
Would have to see the contract, and learn a little more, but the general rule is that a case based on contract must be filed within 4 years of breach, unless there is further acknowledgement of debt at a later date. Trying to collect a debt beyond the statute of limitations may be a violation of the law for which you could sue the creditor. Feel free to email me with more questions.
Chances are that the statute of limitations on any deficiency owed on the car repo has expired, assuming that you bought the car in PA and that PA law applies (4 year statute of limitation).
However, the statute of limitation is ONLY a defense that is asserted in court. It does not mean that you do not owe the debt or that a debt collector cannot try to contact you and collect it. They can certainly write to you or call and seek payment. They cannot threaten to sue if a lawsuit is not possible and that may be a violation of the FDCPA.
Any creditor has the right to sue you even if the statute of limitations has expired. Will they? Very doubtful. To sue you, this would have to be sent to a PA-licensed attorney. Any decent attorney is going to look for the date of last payment (basically when the car was sold) and know that the statute has expired. The attorney would not risk filing suit only to have you file an answer and assert the defense so that the case will be dismissed.
This is what you need to do - wait 5 business days. The collector is required to send you a letter about the debt. And while the FDCPA only applies to original creditors, PA has its own version of it that applies to original creditors.
If they send you a letter about the debt, you send a letter back to them advising that you believe that you have no legal duty to pay on this account as the statute of limitations has expired. Ask them to send you verification of the debt including the date of last payment on the account. Send the letter certified return receipt requested. Under both the PA law and the FDCPA if the creditor knows you are represented they cannot contact you any further.
If you do not receive a letter and they call again - find out who is calling and what about. Get the name of the person you talk to and the date/time of call. Ask if the debt collector sent you a letter as required by the FDCPA and PA law. If they say yes, find out where it was sent and tell them you did not receive the letter. See if they will re-send it. If not, tell them they are in violation of the law, that you have been advised of your rights under the FDCPA and PA law, and that you are contacting an attorney. Then hang up.
Do not, under any circumstances, agree that this is your debt or make any kind of promise to pay. It will revive the statute of limitations if you do that.
If the creditor is indeed violating the law, you might want to sue. Lawyers like these kinds of violations because the FDCPA and PA law provides for the recovery of attorney fees. Your damages though are capped at $1000 under the FDCPA (unless you have actual damages which most clients don't if this is really their debt).
If you just want to get the debt collector off your back, I can do a letter for a reasonable fee. Please contact me at [email protected] if interested.
If you want to sue under the FDCPA or PA Fair Credit Extension Uniformity Act, then seek out a local (PA) attorney specializing in credit card defense (same types of issues are involved as here) or FDCPA violations. I know attorney Greg Artim here at Law Guru handles it although there are others. If you get sued, by all means go seek legal help immediately. PA only gives you 20 days to respond to a lawsuit and if you do not file an answer with the court raising the statute of limitations defense, then its waived meaning that it does not apply. And that would be a bad thing if the creditor got a judgment against you.