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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38910
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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I am a 3rd-party debt owner of a credit card account. I filed

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I am a 3rd-party debt owner of a credit card account. I filed a proof of claim in a bankruptcy case in the Eastern District of California. The debtor's attorney has objected to my claim, based on the following:
1) I did not attach the written contract creating the credit card account, so therefore, the contract must have been oral;
2) The statute of limitations for oral contracts in California is two (2) years;
3) The last payment on the credit card was over two (2) years ago; and therefore,
4) The statute of limitations has run and thus, the proof of claim should be disallowed.

I did not attach the written contract establishing the credit card account because I don't have it. The bank only keeps contracts of this nature for two (2) years. Unfortunately, I do not have any account statements to attach. I ordered the statements, but am advised it could take up to nine (9) months to receive them. I attached to the POC bills of sale, the account data file from the bank, and an affidavit.

The debt is approximately $16,000. The debtor listed the debt on his Schedule F.

Is there any way for me to refute this objection? It's well established that credit card accounts are not oral, but I don't know any way to back up this fact. The account is within the California statute of limitations for written contracts.

You could respond to the objection that:

1. there was a written contract between the debtor and bank;
2. the bank has destroyed the original contract under its document retention policy;
3. the credit card accounts issued by the bank at the time that the first debt was incurred were substantially identical to the attached contract *fn1;
4. the bank has never issued a credit card without a written contract;
5. therefore, there was a written contract between debtor and bank, even though it is no longer available for production.

FN1. As a creditor with a filed proof of claim, you can use the federal court powers to subpoena the bank custodian of records to a hearing on the proof of claim, and bring with him/her, the debtor's statements on the account. If the custodian is out of range of the court's subpeona powers, then you could arrange a deposition at the custodian's location, and then use the deposition transcript as your evidence. You could also force the bank to produce a contract form of the type which it used at the time the credit card was originally issued. And, you could have the custodian of records testify to the fact that the original contract existed, that the bank never issues credit cards without a written contract, that the contract must have been identical to the form contract used at the time that the account was first opened that the account was opened on [date], etc.

This would force the bank to produce all of the records immediately, and testify to whatever you need to make your claim.

This would be a costly exercise, and there may be some workarounds (e.g., you could have the bank produce the various records without the custodian's personal testimony, but rather based upon a written declaration of the authenticity of the records. But, you wouldn't be able to have the custodian in the courtroom, unless he/she is located within the district court proximity. On the other hand, setting a deposition of a witness in a different jurisdiction would be very costly -- it would probably be cheaper to pay the witness's travel and hotel costs to come to the federal courthouse.

Anyway, that's how I would do it if I were representing you. Otherwise, your claim is likely to be denied.

Please let me know if I can clarify or further assist.

Hope this helps.
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Customer: replied 3 years ago.

This is the most comprehensive and thoughtful answer I have ever received from JustAnswer. I very much appreciate your time and effort.