The following material is from "Pinklady" a Cardreport Poster, who successfully
defended herself pro-se from a lawsuit filed against her in Iowa.This material is
for use as a GUIDE only, as she took the trouble to research HER State's laws
and rules of civil procedure.She used the basic format in the "How To Answer A Lawsuit".
This is NOT legal advice, but an "example" of one person's successful use of
the material on this website.
PORTIONS ARE STATE SPECIFIC
THE BOLDFACE PORTIONS ARE OPTIONAL, (AND NOT RECOMMENDED)
(1) Iowa Code §614.1 & §614.5
(2)Defendant’s credit report(NOT RECOMMENDED)
(3)Fair Debt Collection Practices Act §808
(4)Iowa Statutes Of Frauds § Iowa Code Ann. §535.17 (West Supp. 1996)
(5)Federal Truth In Lending Act Title 15 § 103
(6)§Section 226.28 of Regulation Z
(7)Iowa Code §535.17
(8)The reasons that credit card agreement does not fall under written
(9)Discover card online application (refer to page 5’s Card Member
Agreement section)ANY CURRENT ON LINE CC APPLICATION,PREFERABLY FOR
THE SAME CC AS YOU ARE BEING SUED ON
(10)Back copy of Capital One billing
ANSWER AND AFFIRMATIVE DEFENSES
Defendant answers the complaint as follows:
1. Affirm that the defendant's name is YOUR NAME and current address is YOUR ADDRESS.
2. Deny all the claims of the plaintiff.
II. AFFIRMATIVE DEFENSES
Defendant's defenses are:
1. This ALLEGED debt, from plaintiff's complaint, is time-barred under
Iowa statute § 614.1, (Attached exhibit #1). *Based on defendant's
credit report (Attached exhibit #2), the last purchase or charge (Iowa statute § 614.1, attached exhibit #1) on the account was Feb 1999. Thus, the account had past Iowa's Statute of Limitation. Filing a lawsuit on debt that appeared to be time barred, without debt collector having first determined after reasonable inquiry that limitations period has been pasted, was unfair and unconscionable means of collecting debt, within meaning of Fair Debt Collection Practices Act §808 (attached exhibit #3).
* I SUGGEST THE ALTERNATIVE PHRASE, "BASED ON RECORDS, THE LAST ACTIVITY ON
THE ALLEGED ACCOUNT WAS PRIOR TO XXX*
This alleged account is an open-end credit agreement and does not fall
under the Iowa Statutes for written contracts for the following reasons:
(i) They are excluded under Iowa Banking & Interest Definitions Statute.
(ii) They are excluded under Iowa Statutes Of Frauds § Iowa Code Ann. §535.17 (West Supp. 1996), (attached exhibit #4).
(iii) They are excluded under the Federal Truth In Lending Act Title 15 § 103, (attached exhibit #5).
(iv) It is not plausible for a credit card agreement to be classified as an open-end agreement while it is active, but to be claimed to be a closed end "written" contract after default based on §Section 226.28 of Regulation Z (attached exhibit #6).
2. The legal interest rate for a collection agency to charge after an
account is charged off and no longer subject to the original credit account
rate is 5% in IOWA under Iowa Code §535.17, (attached exhibit #7).
The plaintiff has violated the FDCPA by charging 19.8% interest rate to
YOUR PHONE NUMBER
Notice Of Appearance
YOUR NAME aka
NOTICE OF APPEARANCE
To: PLAINTIFF'S NAME Plaintiff AND TO: Clerk of the Court
YOU AND EACH OF YOU PLEASE TAKE NOTICE: that Defendant hereby appears
in the above entitled cause and requests that all further papers and
pleadings herein, except original process, be served upon the Defendant at
the address below stated, pursuant to Civil Rule 5.
Dated this _______________ day of ___________, 2004
YOUR PHONE NUMBER
Actions may be brought within the times herein limited, respectively,
after their causes accrue, and not afterwards, except when otherwise specially
4. Unwritten contracts--injuries to property--fraud--other actions.
Those founded on unwritten contracts, those brought for injuries to
or for relief on the ground of fraud in cases heretofore solely cognizable
in a court of chancery, and all other actions not otherwise provided for in
this respect, within five years, except as provided by subsections 8 and 10.
When there is a continuous, open, current account, the cause of action
shall be deemed to have accrued on the date of the last item therein, as proved
on the trial.
THE FAIR DEBT COLLECTION PRACTICES ACT
§ 808. Unfair practices [15 USC 1692f]
A debt collector may not use unfair or unconscionable means to collect or
attempt to collect any debt. Without limiting the general application of the
foregoing, the following conduct is a violation of this section:
(1) The collection of any amount (including any interest, fee, charge,
or expense incidental to the principal obligation) unless such amount is
expressly authorized by the agreement creating the debt or permitted by law.
(2) The acceptance by a debt collector from any person of a check or other
payment instrument postdated by more than five days unless such person is
notified in writing of the debt collector's intent to deposit such check or
instrument not more than ten nor less than three business days prior to such
(3) The solicitation by a debt collector of any postdated check or other
postdated payment instrument for the purpose of threatening or instituting
(4) Depositing or threatening to deposit any postdated check or other
postdated payment instrument prior to the date on such check or instrument.
(5) Causing charges to be made to any person for communications by
concealment of the true propose of the communication. Such charges include,
but are not limited to, collect telephone calls and telegram fees.
(6) Taking or threatening to take any nonjudicial action to effect
dispossession or disablement of property if --
(A) there is no present right to possession of the property claimed as
collateral through an enforceable security interest;
(B) there is no present intention to take possession of the property; or
(C) the property is exempt by law from such dispossession or disablement.
(7) Communicating with a consumer regarding a debt by post card.
(8) Using any language or symbol, other than the debt collector's address,
on any envelope when communicating with a consumer by use of the mails or by
telegram, except that a debt collector may use his business name if such name
does not indicate that he is in the debt collection business.
IOWA STATUTE OF FRAUDS
535.17 Requirements of credit agreements Statute of frauds Modifications.
1. A credit agreement is not enforceable in contract law by way of action or defense by any party unless a writing exists which contains ALL of the material terms of the agreement and is signed by the party against whom enforcement is sought.
2. Unless otherwise expressly agreed in writing, a modification of a credit agreement which occurs after the person asserting the modification has been notified in writing that oral or implied modifications to the credit agreement are unenforceable and should not be relied upon, is not enforceable in contract law by way of action or defense by any party unless a writing exists containing the material terms of the modification and is signed by the party against whom enforcement is sought. This notification can be included among the terms of a credit agreement, can be included on a separate form or together with other disclosures that are provided when the agreement is made, or can be given wholly apart from the agreement and at any time after the agreement has been made. To be effective, the notification and its language must be conspicuous. A person who gives a notification is bound by it to the same extent as the person notified. A notification with respect to any credit agreement is effective with respect to all other credit agreements then in effect between the parties if the notification conspicuously so provides. When a modification is required by this section to be in writing and signed, such requirement cannot be modified except by clear and explicit language in a writing signed by the person against whom the modification is to be enforced.
3. A notification referred to in subsection 2 in the following form in boldface, ten-point type, complies with the requirements of this section:
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD
BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE.
NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY
BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY
ANOTHER WRITTEN AGREEMENT.
4. Notwithstanding subsections 1 and 2, a credit agreement or
modification of a credit agreement which is not in writing, but which is
valid in other respects, is enforceable if the party against whom
enforcement is sought admits in court that the agreement or modification
was made, but no agreement or modification is enforceable under this
subsection beyond the terms admitted.
5. For purposes of this section, unless the context otherwise requires:
a. "Action" includes petition, complaint, counterclaim, cross-claim,
or any other pleading or proceeding to enforce affirmatively any right or
duty or to recover damages for the nonperformance of any duty.
b. "Contract" means a promise or set of promises for the breach of which
the law would give a remedy or the performance of which the law would recognize
a duty, and includes promissory obligations based on instruments and similar
documents or on the contract doctrine of promissory estoppel.
c. "Credit agreement" means any contract made or acquired by a lender to
loan money, finance any transaction, or otherwise extend credit for any
purpose, and includes all of the terms of the contract.
"Credit agreement" does not mean a contract to loan money, finance a
transaction, or otherwise extend credit by means of or pursuant to a credit
card, as defined in section 537.1301, subsection 16, or pursuant to open-end
credit, as defined in section 537.1301, subsection 29, or pursuant to a home
equity line of credit, as defined in section 535.10 whether the loan,
financing, or credit is for consumer or business purposes or a consumer rental
purchase agreement as defined in section 537.3604, subsection 8.
DEFINITION OF "OPEN-END CREDIT"
(15 USC 1602(i)):
"(i) The term ''open end credit plan'' means a plan under which the
creditor reasonably contemplates repeated transactions, which prescribes
the terms of such transactions, and which provides for a finance charge
which may be computed from time to time on the outstanding unpaid balance.
A credit plan which is an open end credit plan within the meaning of the
preceding sentence is an open end credit plan even if credit information is
verified from time to time."
537.1301 General definitions.
29. "Open-end credit" means an arrangement, other than a consumer rental
purchase agreement, pursuant to which all of the following are applicable:
a. A creditor may permit a consumer, from time to time, to purchase or
lease on credit from the creditor or pursuant to a credit card, or to obtain
loans from the creditor or pursuant to a credit card.
b. The amounts financed and the finance and other appropriate charges are
debited to an account.
c. The finance charge, if made, is computed on the account periodically.
d. Either the consumer has the privilege of paying in full or in
installments, or the transaction is a consumer credit transaction solely
because a delinquency charge or the like is treated as a finance charge
pursuant to subsection 19, paragraph "b", subparagraph (1) of this section
or the creditor otherwise periodically imposes charges computed on the
account for delaying payment of it and permits the consumer to continue
to purchase or lease on credit.
It is not plausible for a credit card agreement to be classified as an
open-end agreement while it is active, but to be claimed to be a closed end
"written" contract after default.
Referring to: §Section 226.28 of Regulation Z
As a general matter, state laws are preempted if they are inconsistent
with the act and regulation, and then only to the extent of the inconsistency.
A state law is inconsistent if it requires or permits creditors to make
disclosures or take actions that contradict the requirements of federal law.
§Sec. 226.28 Effect on State laws.
(a) Inconsistent disclosure requirements.
(1) Except as provided in paragraph (d) of this section, State law
requirements that are inconsistent with the requirements contained in chapter
1 (General Provisions), chapter 2 (Credit Transactions), or chapter 3 (Credit
Advertising) of the act and the implementing provisions of this regulation are
preempted to the extent of the inconsistency. A State law is inconsistent
if it requires a creditor to make disclosures or take actions that contradict
the requirements of the Federal law. A State law is contradictory if it
requires the use of the same term to represent a different amount or a
different meaning than the Federal law, or if it requires the use of a term
different from that required in the Federal law to describe the same item.
A creditor, State, or other interested party may request the Board to
determine whether a State law requirement is inconsistent.
After the Board determines that a State law is inconsistent,
a creditor may not make disclosures using the inconsistent term or form.
(2)(i) State law requirements are inconsistent with the
requirements contained in sections 161 (Correction of billing errors) or 162
(Regulation of credit reports) of the Act and the implementing provisions of
this regulation and are preempted if they provide rights, responsibilities,
or procedures for consumers or creditors that are different from those required
by the Federal law. However, a State law that allows a consumer to inquire
about an open-end credit account and imposes on the creditor an obligation
to respond to such inquiry after the time allowed in the Federal law for the
consumer to submit written notice of a billing error shall not be preempted
in any situation where the time period for making written notice under this
regulation has expired. If a creditor gives written notice of a consumer's
rights under such State law, the notice shall state that reliance on the
longer time period available under State law may result in the loss of
important rights that could be preserved by acting more promptly under
Federal law; it shall also explain that the State law provisions apply only
after expiration of the time period for submitting a proper written notice
of a billing error under the Federal law. If the State disclosures are made
on the same side of a page as the required Federal disclosures, the State
disclosures shall appear under a demarcation line below the Federal
disclosures, and the Federal disclosures shall be identified by a heading
indicating that they are made in compliance with Federal law.
(ii) State law requirements are inconsistent with the requirements
contained in chapter 4 (Credit billing) of the Act (other than section 161 or
162) and the implementing provisions of this regulation and are preempted if
the creditor cannot comply with State law without violating Federal law.
(iii) A State may request the Board to determine whether its law is
inconsistent with chapter 4 of the Act and its implementing provisions.
(b) Equivalent disclosure requirements. If the Board determines that
a disclosure required by state law (other than a requirement relating to the
finance charge, annual percentage rate, or the disclosures required under
Sec. 226.32) is substantially the same in meaning as a disclosure required
under the act or this regulation, creditors in that state may make the state
disclosure in lieu of the federal disclosure. A creditor, State, or other
interested party may request the Board to determine whether a State disclosure
is substantially the same in meaning as a Federal disclosure.
(c) Request for determination. The procedures under which a request
for a determination may be made under this section are set forth in appendix
(d) Special rule for credit and charge cards. State law requirements
relating to the disclosure of credit information in any credit or charge card
application or solicitation that is subject to the requirements of section
127(c) of chapter 2 of the act (Sec. 226.5a of the regulation) or in any
renewal notice for a credit or charge card that is subject to the requirements
of section 127(d) of chapter 2 of the act (Sec. 226.9(e) of the regulation)
are preempted. State laws relating to the enforcement of section 127 (c) and
(d) of the act are not preempted.
535.2 Rate of interest.
1. Except as provided in subsection 2 hereof, the rate of interest shall
be five cents on the hundred by the year in the following cases, unless the
parties shall agree in writing for the payment of interest at a rate not
exceeding the rate permitted by subsection 3:
a. Money due by express contract.
b. Money after the same becomes due.
c. Money loaned.
d. Money received to the use of another and retained beyond a reasonable time, without the owner's consent, express or implied.
e. Money due on the settlement of accounts from the day the balance is ascertained.
f. Money due upon open accounts after six months from the date of the last item.
g. Money due, or to become due, where there is a contract to pay interest, and no rate is stipulated.
2. a. The following persons may agree in writing to pay any rate of interest, and a person so agreeing in writing shall not plead or interpose the claim or defense of usury in any action or proceeding, and the person agreeing to receive the interest is not subject to any penalty or forfeiture for agreeing to receive or for receiving the interest:
(1) A person borrowing money for the purpose of acquiring real property or refinancing a contract for deed.
(2) A person borrowing money or obtaining credit in an amount which exceeds twenty-five thousand dollars, exclusive of interest, for the purpose of constructing improvements on real property, whether or not the real property is owned by the person.
(3) A vendee under a contract for deed to real property.
(4) A domestic or foreign corporation, and a real estate investment trust as defined in section 856 of the Internal Revenue Code, and a person purchasing securities as defined in chapter 502 on credit from a broker or dealer registered or licensed under chapter 502 or under the Securities Exchange Act of 1934, 15 U.S.C., ch. 78A, as amended.
(5) A person borrowing money or obtaining credit for business or agricultural purposes, or a person borrowing money or obtaining credit in an amount which exceeds twenty-five thousand dollars for personal, family, or household purposes. As used in this paragraph, "agricultural purpose" means as defined in section 535.13, and "business purpose" includes but is not limited to a commercial, service, or industrial enterprise carried on for profit and an investment activity.
b. In determining exemptions under this subsection, the rules of construction stated in this paragraph apply:
(1) The purpose for which money is borrowed is the purpose to which a majority of the loan proceeds are applied or are designated in the agreement to be applied.
(2) Loan proceeds used to refinance or pay a prior loan owed by the same borrower are applied for the same purposes and in the same proportion as the original principal of the loan that is refinanced or paid.
(3) If the lender releases the original borrower from all personal liability with respect to the loan, loan proceeds used to pay a prior loan by a different borrower are applied for the new borrower's purposes in agreeing to pay the prior loan.
(4) If the lender releases the original borrower from all personal liability with respect to the loan, the assumption of a loan by a new borrower is treated as if the new borrower had obtained a new loan and had used all of the proceeds to pay the loan assumed.
(5) This paragraph does not modify or limit section 535.8, subsection 2, paragraph "c" or "e".
(6) With respect to any transaction referred to in paragraph "a" of this subsection, this subsection supersedes any interest-rate or finance-charge limitations contained in the Code, including but not limited to this chapter and chapters 321, 322, 524, 533, 534, 536A, and 537.
3. a. The maximum lawful rate of interest which may be provided for in any written agreement for the payment of interest entered into during any calendar month commencing on or after April 13, 1979, shall be two percentage points above the monthly average ten-year constant maturity interest rate of United States government notes and bonds as published by the board of governors of the federal reserve system for the calendar month second preceding the month during which the maximum rate based thereon will be effective, rounded to the nearest one-fourth of one percent per year.
On or before the twentieth day of each month the superintendent of banking shall determine the maximum lawful rate of interest for the following calendar month as prescribed herein, and shall cause this rate to be published, as a notice in the Iowa administrative bulletin or as a legal notice in a newspaper of general circulation published in Polk county, prior to the first day of the following calendar month. This maximum lawful rate of interest shall be effective on the first day of the calendar month following publication. The determination of the maximum lawful rate of interest by the superintendent of banking shall be exempt from the provisions of chapter 17A.
b. Any rate of interest specified in any written agreement providing for the payment of interest shall, if such rate was lawful at the time the agreement was made, remain lawful during the entire term of the agreement, including any extensions or renewals thereof, for all money due or to become due thereunder including future advances, if any.
c. Any written agreement for the payment of interest made pursuant to a prior written agreement by a lender to lend money in the future, either to the other party to such prior written agreement or a third party beneficiary of such prior agreement, may provide for payment of interest at the lawful rate of interest at the time of the execution of the prior agreement regardless of the time at which the subsequent agreement is executed.
d. Any contract, note or other written agreement providing for the payment
of a rate of interest permitted by this subsection which contains any
provisions providing for an increase in the rate of interest prescribed
therein shall, if such increase could be to a rate which would have been
unlawful at the time the agreement was made, also provide for a reduction
in the rate of interest prescribed therein, to be determined in the same
manner and with the same frequency as any increase so provided for.
Why credit card agreement does not fall under written contract:
In order to use the SOL for a written contract, the contract itself must
be signed by the party who is being sued. Just putting the contract terms on
paper is not sufficient, it needs to be signed. This is where credit cards
typically fail to satisfy the written contract requirement for Statute of
Limitation, as most "Cardmember Agreements" are not signed by the cardholder.
Cardholders will typically sign an "Application," but that is not a contract.
At best that could be considered an "Offer" to enter into a contract, but as it
typically does not contain the terms of the contract, it cannot be the
contract itself (attached exhibit #9).
Additionally, the amount sued for on a written contract must be
ascertainable from the written part of the contract itself. i.e. the amount due
needs to be able to be calculated from the written contract. This is another
problem with credit cards as written contract.
The fact that the credit card application is signed does not make it a
written contract because it has no “fixed” terms and does not contain ALL
of the material terms of the agreement based on Iowa Statute of Frauds § 535.17
(exhibit #4), and therefore does not meet Iowa’s criteria for a written
A NEW written contract would have to be singed each time the account terms
changed in order to fit the definition of a “written contract” but this is not
the case with credit cards. Interest rate and fees often change with only the
“use” of the card after the “effective date” as “acceptance” of the new terms
which hardly qualifies as a “written contract”.