5 Steps to Handling a Portfolio Recovery Lawsuit


April 20, 2020

Lawsuits can be scary, but doing nothing is the worst possible option.  When someone doesn’t defend a lawsuit filed against them, they can have their wages garnished, their bank account garnished, or suffer other legal penalties.  Here are 5 steps to get your Portfolio Recovery Associates lawsuit under control NOW!

Who is Portfolio Recovery Associates?

If you are receiving collection notices from Portfolio Recovery Associates (or “PRA”), you may be wondering who they are.  You probably never took a loan out from PRA, and you may hardly recognize the debt they claim you owe.

PRA is one of the biggest debt collectors in the country.  In fact, they are publicly traded under ticker symbol “PRAA.”  They often buy old debt from credit card companies and other lenders at a reduced amount, and then seek to collect on the debt for themselves.

You might be wondering “well if these guys buy the debt for pennies on the dollar, I should be able to pay it off for pennies on the dollar.”  Under the way the law is written, debts are generally assignable.  What this means is that one lender can transfer a debt to another lender.  The cost of the transfer does not affect the amount that is owed.  So while PRA might be willing to negotiate on a debt they have acquired, you don’t get the same deal that they get.  So what can you do if you are faced with a Portfolio Recovery lawsuit or collection notices?

1. Show Up 

Have you ever heard the express “80% of success is showing up”?  Well that rule  holds true in the law.  When a lawsuit is filed, the court system assigns the case based on the amount sought.  In Florida, any claims up to $8,000 are in Small Claims, up to $30,000 are in county court, and anything more is in circuit court.  In small claims, there is a case management conference at the beginning of the case.  Whereas in county court and circuit court, there is no immediate hearing but the defendant has a 20-day response time from the day the lawsuit papers are served.  If a defendant doesn’t appear (in small claims) or file their response (in county court or circuit court), a default judgment will likely be entered against them.  Make sure to respond so you don’t lose off the bat!

2. Review the claim

When one company is suing based on the records of another company, it may be that the records are inaccurate.  Review the claim.  See if the claim and the amount are accurate.

3.  Consider your options

Evaluate the Portfolio Recovery debt, along with your other debt and your income.  Is it financially realist to be able to afford settlement, or does it make more sense to consider bankruptcy?  Here is where you may want to have a consultation with a debt resolution professional who can help you to objectively review your options.

4.  Communicate

If you hire a debt settlement attorney to assist you with resolving the Portfolio Recovery Associates debt, your attorney will communicate for you.  Generally, if someone hires our firm for debt collection, I suggest the client does not communicate with the collectors because it could mess up our settle discussions.  But if you are determined to go it alone, you are generally better talking to the collection company than putting your head in the sand (*this is a generalization; each situation is different).  Just keep in mind, they are not looking out for your best interest.  They won’t tell you if your income qualifies for a legal protection like “head of household” or social security.  In fact, in some cases, if the debt is too old, it may be that making a payment is the worst thing you can  Their job is to get you to pay.

5. Get Your Deal in Writing

Before you pay a dime toward any settlement, get the settlement in writing.  Otherwise there is no way to document the benefits you are entitled to under your deal.

If you have questions about your Portfolio Recovery Associates lawsuit, contact us for a complimentary consultations 1-on-1 with our experienced attorneys.  We’ll help you evaluate your options to see what course is best for you in our opinion.  Options may include debt settlement, litigation, and bankruptcy.

He represented my husband. We felt cared about and confident with the help of Mr .Zeigler .In court it was clear he knew what he was talking about. The outcome was in our favor. I recommend him 100 percent!!!!!

Client Review

Related:  The Role Debt Plays in Poverty

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