Creditor sent a credit card dispute to arbitration. The arbitration was held in Delaware pursuant to the credit card agreement. (Probably a violation of the Fair Debt Collection Practices Act) Creditor then sought to reduce the arbitration award to judgment in Michigan. A provision in the credit card agreement provided that Delaware law applied to the agreement. Delaware law provided that the arbitration award was to be enforced in Delaware. Despite Delaware law the creditor sought to reduce it to judgment in Michigan.
The action was met with an immediate motion to dismiss for lack of jurisdiction. The Michigan court agreed that Delaware law applied and the proper place to bring the action was in Delaware. Ironically the creditor argued that it was forbidden to bring suit in Delaware under the Fair Debt Collections Practice Act. The Michigan court ruled that the specific language of the contract bound the creditor and dismissed the case. To date the suit has not brought in Delaware and the creditor has an unenforceable $27,000.00 arbitration award.
Once again, debt collection actions are defensible. Contact me to see if you wish to defend rather than go into bankruptcy.
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#4 by Expert Lawyer on June 10, 2010 - 7:25 pm
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Basically the Arbitration Agreement provided that Delaware law governed the arbitration. Delaware law required all arbitration hearings to be held in a Delaware court. Based upon this the Michigan court refused to take jurisdiction. Since filing for judgment in Delaware would violate the Fair Debt Collection Practices Act the creditor is left without a remedy.
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