No Need to Reinvent the Wheel: Where to find evidence against Portfolio Recovery Associates
You may feel alone as a pro se litigant. But you are not.
My mother used to say, “books are your friends”. The World Wide Web extended your friend list exponentially.
That attorney who earned $199,856.00 for representing a class action against PRA, he is your friend.
He is a nice guy and kinda smart.
Read this deposition and you may feel like you are in the room with your new friend and the folks representing the goliath debt buyer.
This deposition was posted on PACER. It costs 10 cents per page to download documents from the public access site, but your bill is forgiven if you stay below a minimum.
Hey, you and I are friends now, too. If you want to find some fun facts on PACER and want to post them on this blog, feel free to email the download to me at bohemian_books@yahoo.com.
Here’s two more docs that I paid for: the complaint against Portfolio Recovery Associates, LLC and the settlement agreement that came after the deposition above.
Does (Alleged) Debt Cancelation Give Standing to Sue Portfolio Recovery Associates, LLC?
Portfolio Recovery Associates, LLC and other debt buyers have a potential tax loophole.
The original creditor of an alleged debt that cancels the debt must report the cancellation to the IRS on forms 1099-C and 1096. This alerts the IRS that the alleged debtor had “income” the amount of the canceled debt.
If the debt is low and the alleged debtor’s income is too low to require filing, this will be of no consequence to the alleged debtor. If the alleged debtor has enough income to require filing taxes, the write-off might create a tax burden for the debtor.
This is where the real fun starts. The original creditor can write off the bad debt, then sell the bad debt to a buyer like Portfolio Recovery for pennies on the dollar.
I am not an accountant. I am not a lawyer.
I am a thinker. And I think the debt buyer can write off the exact same debt as the original creditor. I think this because Portfolio Recovery has sent some alleged debtors a 1099-C.
I think it would be fair to limit the tax write-off to the amount paid for the unrecoverable debt, and then only if the debt is verifiable. There is an exemption if the debt is disputed. I have not found any code or caselaw limiting the write-off to the once taken by the original creditor.
If the debt buyer opts to write-off a debt, it is supposed to send a 1099-C to the debtor and to the IRS.
Portfolio Recovery Associates, LLC is a wholly owned subsidiary of PRA Group, Inc. PRA Group, Inc. has other debt buying subsidiaries.
Can Portfolio Recovery Associates, LLC “sell” its bad debts to a sister subsidiary? Can the sister subsidiary churn the bad debt through the IRS one more time? Is the alleged debtor responsible for paying tax on the canceled debt two, three or more times?
And what happens if the debt is disputed?
I am suing PRA, LLC for violations of the FDCPA, among other things. PRA, LLC said it decided to “waive” my alleged debt “in light of” the litigation. But, the goliath debt collector claims the stated debt was accurate before they magnanimously called it zero. PRA has no account level documentation of the alleged original debt. PRA knows the portfolio that had the debt listed was full of errors. It already reimbursed about $19M to other alleged debtors who naively gave money to Portfolio Recovery for similar alleged debt. But PRA literally swears under penalty of perjury that I had a debt of $2,297.63 that it bought from the original creditor and that it “waived” the debt.
But PRA told me, in writing, it has no intention to report the waiver to the IRS. Hmmm?
Debt collectors love to quote a case called Spokeo that says if a plaintiff did not suffer actual harm he does not have “standing” to sue over a statutory violation.
Does creation of a tax burden give the alleged debtor standing? I think so. That is why Portfolio Recovery Associates agreed it was not going to file a 1099-C about my “waived” debt.
What will PRA say to the IRS about its decision to waive debt without reporting the waived debt to Uncle Sam?
And when the IRS notices that debts are being churned to multiply the available write-offs, will it endeavor to close the loophole that is so profitable to Portfolio Recovery Associates, LLC?
I hope so.
Helpful Hints of the Day
If you have been wronged by a big business or a government official and you can’t afford an attorney to help you…
heavy sigh…
get ready for years of abuse by the same system that is supposed to protect you.
There are good judges. There are even a few good lawyers.
Mostly, there are greedy people who want to keep the little guy down and protect the earning capacity of their fellow attorneys.
I have taken on some snakes in the system. But as my son, one of the victims of a bad family law judge said, “you can cut off the head of one snake and ten more will pop up.”
My intention was not to discourage you today. It was to bring you advice.
So, here are some important pointers that helped me to remove one bad guy from the bench and prevail in a civil suit facing five law firms.
- Read the rules. Read the rules of civil procedure for the “jurisdiction” your case is in.
- Read the rules II. Read the rules of evidence for the “jurisdiction” your case is in.
- Watch YouTube videos or similar. Search by key words, like “debt collector harassing me”. I listen to a video each day while I walk for exercise.
- Stay balanced. Play with your kids, the dog, your spouse. Eat right. Exercise.
- Document everything. Be professional in all you do. Be polite. Save the receipts, warranties, emails.
- If you are in a “single party consent” state, record every conversation you have with a company. It amazes me that so many people are willing to lie for their employer. When they hear that you taped the conversation (in a legal state or where they say “this conversation may be recorded”) they usually start offering to do what they were supposed to do in the first place.
It is up to you to decide if you will accept the right thing after whatever hell they put you through first. Or, if you are willing to stay the course and maybe get a jury verdict including punitive damages, enough to punish and deter the wrong-doer.
We’ll talk more another day. But for now, I’m going to take my own advice and go play.
A Higher Law 