Portfolio Recovery Associates Is Suing Me in New York — What Do I Do?

Portfolio Recovery Associates LLC (PRA) is a wholly owned subsidiary of PRA Group, Inc. (NASDAQ: PRAA), one of the two largest publicly traded debt buyers in the United States. PRA is headquartered in Norfolk, Virginia, and it is among the most active debt-buyer plaintiffs in New York — it files more consumer debt collection lawsuits in this state than almost any other plaintiff.

PRA buys portfolios of charged-off consumer debt — primarily credit cards from Capital One, Synchrony Bank, Citibank, and various store-card issuers — at deep discounts, typically four to seven cents per dollar of face value. PRA's business model depends on default judgments: when defendants do not respond, PRA recovers the full claimed balance plus interest from a portfolio it paid pennies to acquire.

The Consumer Financial Protection Bureau has taken two major enforcement actions against PRA. In 2015, the CFPB ordered PRA to pay a total of $27 million — $19 million in consumer refunds, an $8 million civil money penalty, and an agreement to vacate approximately $3 million in judgments obtained without adequate documentation. The 2015 consent order found that PRA collected on unverified debts, filed collection lawsuits using false affidavits, and pursued consumers without the documentation needed to establish that PRA owned the debt and that the claimed amount was accurate.

In 2023, the CFPB returned and labeled PRA a "repeat offender," issuing a second consent order totaling $24.18 million — a $12 million civil money penalty and $12.18 million in consumer redress — for continuing the same documentation and verification failures the 2015 order required PRA to fix. Both consent orders are public and available on the CFPB's enforcement actions page at consumerfinance.gov.

Why this matters specifically in New York: the New York Consumer Credit Fairness Act, signed November 8, 2021, imposes pleading requirements that map almost exactly onto the documentation gaps the CFPB sanctioned PRA for — twice. New York is the most defendant-favorable state in the country for fighting back against PRA.

One important factual note: New York did not participate in any multistate attorney general settlement against PRA, and there is no New York AG enforcement action against PRA at scale comparable to those in certain other states. The consumer protections available to New York defendants flow entirely from the CCFA, the CPLR statute of limitations, state consumer protection law, and federal enforcement — not from a state-level regulatory settlement.

If you were just served with a summons and complaint from PRA in New York, here is what almost certainly happened. You fell behind on a credit card or other consumer account. The original creditor — Capital One, Synchrony Bank, Citibank, or another issuer — wrote the account off as uncollectible and sold it as part of a portfolio to PRA. PRA is now suing you in New York Supreme Court, Civil Court, or a lower court because obtaining a default judgment is the most efficient way to convert that portfolio purchase into a full-balance recovery.

Industry data and CFPB research confirm that the majority of consumers sued in consumer debt cases never file an Answer. They get scared, do not understand the process, or assume the lawsuit will go away if ignored. When that happens, the court enters a default judgment automatically under CPLR § 3215. Default judgments are PRA's primary profit driver in New York — and the CFPB has criticized PRA specifically for filing lawsuits designed to maximize default rates rather than to litigate on the merits.

In New York, a default judgment carries serious consequences. PRA can garnish up to 10 percent of your gross wages — among the lowest caps in the country, but still real money. PRA can also obtain a restraining notice on your bank account, freezing up to the full judgment amount while you scramble to vacate it. Both remedies are available without further court hearings once the judgment is entered.

The critical fact for New York defendants: New York is unusually powerful ground for fighting back. The Consumer Credit Fairness Act creates pleading requirements that PRA frequently cannot satisfy. The three-year statute of limitations is the shortest for consumer credit card debt of any state in our network. Madden v. Midland Funding creates a federal interest-rate defense unique to the Second Circuit. And PRA's twice-sanctioned CFPB record is direct evidence of the systemic documentation failures that the CCFA was designed to catch. Filing a real Answer in New York is unusually likely to succeed against PRA.

New York gives you twenty days to file your Answer if you were served personally — in person by a process server — or thirty days if you were served by another method, such as substituted service (leaving papers with a person of suitable age and discretion at your home or workplace) or service by mail combined with a "nail and mail" posting. This deadline is set by CPLR § 3012(a). Whether you have twenty or thirty days is determined by how service was completed — check the affidavit of service that the process server filed with the court if you are unsure.

You count starting the day after service. Weekends and holidays count as days. If your deadline falls on a weekend or court holiday, it extends to the next business day under CPLR § 2103. Do not subtract weekends.

If you miss your deadline, PRA will move for default judgment under CPLR § 3215. The court will normally grant it if PRA's application is procedurally complete. Under CPLR § 3215(a), PRA must include an affidavit of facts in any default application, and under the CCFA, a default application for a consumer-credit debt must include the same six-element disclosure required at the complaint stage. PRA's documented CFPB violations make these default-stage defects unusually common — even consumers who failed to answer sometimes have grounds to oppose the default application itself.

If a default has already been entered against you, your path is a motion to vacate under CPLR § 5015(a)(1). That motion requires showing both a reasonable excuse for the default and a meritorious defense. CCFA pleading defects, an expired three-year SOL, or PRA's failure to attach required documentation all qualify as meritorious defenses. The longer you wait to bring this motion, the harder both showings become.

The single most important step right now: confirm exactly when and how you were served, calculate your deadline, and treat that date as the most important date on your schedule.

New York has the most consumer-protective debt-buyer pleading law in the country, and against PRA specifically, it is the most powerful procedural tool available to defendants.

The Consumer Credit Fairness Act was signed by Governor Hochul on November 8, 2021. It took effect in two tranches. The statute of limitations provision — reducing the SOL on consumer credit card debt to three years under CPLR § 214-i — became effective April 7, 2022. The pleading, notice, and default provisions — codified primarily at CPLR §§ 306-d, 3015, 3016(j), and 3215 — became effective May 7, 2022.

Under CPLR § 3016(j), every consumer-credit complaint filed in New York must plead six specific elements on the face of the pleading: (1) the name of the original creditor; (2) the account identifier, or at minimum the last four digits of the account number; (3) the date of default; (4) a statement that the applicable statute of limitations has not expired; (5) the complete chain of title from the original creditor to the current plaintiff, including every intermediate assignment; and (6) an itemization of the charge-off balance showing principal, interest, and fees separately.

In addition, the complaint must attach either the signed credit agreement (the original cardholder contract) or the charge-off statement. Missing any of these elements is grounds for dismissal under CPLR § 3211(a)(3) for lack of capacity or standing.

New York appellate courts established foundation-defect requirements for debt buyers before the CCFA. In Palisades Collection, LLC v. Kedik (4th Dep't 2009), the Appellate Division held that the chain of title must appear on the face of the complaint and that a debt buyer that cannot establish its chain of assignment has no standing to sue. Unifund CCR Partners decisions from the Appellate Division reinforced similar assignment-documentation requirements. The CCFA codified and substantially strengthened these pre-existing judicial requirements, making them statutory obligations rather than common-law standards.

The overlap between CCFA requirements and CFPB findings is not coincidence. The six elements CCFA mandates are almost exactly the documentation the CFPB sanctioned PRA for failing to obtain before filing suit in 2015, and for still failing to produce in 2023. In practice, PRA complaints filed in New York frequently fall short: the chain of assignment is often a generic block transfer affidavit rather than document-by-document proof; the post-charge-off itemization is often absent or incomplete; the original cardholder agreement is often not attached. Each gap is a CCFA defect.

New York has the shortest statute of limitations on consumer credit card debt of any state in the Answered network — three years under CPLR § 214-i, effective April 7, 2022. For comparison, Wisconsin, Ohio, and Michigan each have six-year statutes. New York's three-year limit dramatically reduces the window in which PRA can file an enforceable lawsuit.

The three-year clock starts running on the date of your last payment or the charge-off date, whichever is later. If you made your last payment on a Synchrony Bank account in February 2021 and the account was charged off in August 2021, the clock began on the charge-off date and expired in August 2024. Any lawsuit filed after that date is time-barred — even if PRA acquired the portfolio recently and even if PRA claims the debt in a different dollar amount than what you remember.

New York courts have applied CPLR § 214-i to bar PRA suits filed outside the three-year window. Portfolio Recovery Associates, LLC v. King is among the New York decisions applying the shortened consumer-credit SOL to time-bar a PRA complaint — it is a statute of limitations ruling, not a pleading or chain-of-title case.

The statute of limitations is an affirmative defense in New York. It does not trigger automatically — the court will not dismiss the case just because the debt is old. Under CPLR § 3018(b), affirmative defenses must be specifically pleaded in your Answer or they are waived. If you fail to raise the SOL defense in your Answer, you cannot raise it later.

The CFPB found in both 2015 and 2023 that PRA filed lawsuits on debts it knew or should have known were past the applicable limitations period, and failed to disclose SOL status to consumers as required by the 2015 consent order. Three years is an unusually short window for a portfolio buyer's litigation strategy, and a meaningful share of PRA complaints filed in New York are already time-barred at the moment they land on the docket.

New York is in the Second Circuit, which creates a federal defense against PRA that does not exist for defendants in most other states: the Madden doctrine.

In Madden v. Midland Funding, LLC, 786 F.3d 246 (2d Cir. 2015), the Second Circuit held that the National Bank Act's interest-rate preemption — which allows national banks to charge interest permitted by their home state, regardless of the borrower's state — does not follow the loan when a national bank assigns it to a third-party debt buyer. Once PRA purchases the account, PRA is not a national bank and cannot claim the national bank's preemption rights. PRA's interest claims are therefore subject to New York's usury laws.

New York's civil usury ceiling is 16 percent per annum under New York General Obligations Law § 5-501 and New York Banking Law § 14-a. The criminal usury ceiling is 25 percent under New York Penal Law § 190.40. If PRA is asserting post-transfer interest above those ceilings on an account it acquired from a national bank, that interest cannot be collected under Madden.

However, Madden's practical reach has been narrowed, and you must evaluate this defense carefully before relying on it. In 2020, the Office of the Comptroller of the Currency promulgated a valid-when-made rule at 12 CFR § 7.4001(e), providing that an interest rate that was validly set when a national bank originated the loan remains valid when the bank later transfers or assigns it. Federal district courts in New York have applied that rule: in Cohen v. Portfolio Recovery Associates (E.D.N.Y. 2020) and in Peterson v. Portfolio Recovery Associates (W.D.N.Y. 2020), courts limited Madden's scope in light of the OCC's valid-when-made position.

What this means in practice: if PRA's complaint asserts only the charge-off balance at the original contractual interest rate set by the national bank when the account was opened, the valid-when-made rule likely applies and Madden does not help. But if PRA is adding post-transfer interest at a rate above the original contractual rate — or asserting interest above New York's 16 percent civil usury cap on amounts accruing after PRA's purchase — Madden remains a live defense even after the OCC rule.

Check the complaint's interest calculation. If PRA claims a balance that has grown substantially from the charge-off amount due to post-acquisition interest, and if that implied rate exceeds the original contractual rate or New York's usury ceiling, raise Madden as an affirmative defense. The Second Circuit decision is binding; the valid-when-made rule creates a narrowing argument PRA will likely make in response, but the defense itself is not foreclosed.

Most credit card agreements from the issuers PRA typically purchases — Capital One, Synchrony Bank, Citibank, Chase — contain mandatory arbitration clauses requiring that any dispute be resolved through binding arbitration administered by the American Arbitration Association (AAA) or JAMS. When PRA acquired your account, it acquired the account subject to the original cardholder agreement, including its arbitration clause.

The arbitration clause belongs to both sides. PRA could theoretically invoke it — but more importantly, you can invoke it against PRA. This creates the "arbitration fee trap" that frequently ends PRA's New York cases.

AAA's Commercial Arbitration Rules require the business claimant — PRA — to pay the initial filing fee. For a consumer debt dispute, the AAA Consumer Arbitration Rules cap the consumer's fee at $200 while requiring the business claimant to pay filing fees ranging from $1,575 to $5,125 or more depending on the amount in controversy, plus a portion of the arbitrator's hourly fees. When the disputed debt is $3,000, the cost of arbitration for PRA can equal or exceed the entire claimed balance. PRA very commonly abandons cases rather than pay those fees.

Under CPLR § 7503(a), you can file a motion to compel arbitration in the New York court where PRA filed its complaint. If the court grants the motion, PRA must either initiate AAA proceedings — paying the business filing fee — or face dismissal for failure to prosecute. Many New York PRA cases are voluntarily dismissed after a motion to compel is granted.

To use this defense, you need a copy of the original cardholder agreement showing the arbitration clause. PRA is required under the CFPB's 2015 consent order to obtain the original cardholder agreement before filing suit, and it is required to produce that document in discovery. Pair the arbitration motion with a CCFA dismissal motion under CPLR § 3211(a)(3) for maximum leverage — the combined pressure of potential CCFA dismissal and compelled arbitration is frequently enough to prompt a settlement or voluntary dismissal.

Your Answer is the most consequential document you will file in this case. It is your formal response to PRA's complaint, and it locks in your defenses for the rest of the lawsuit. A complete Answer in New York does three things: it admits or denies each numbered allegation under CPLR § 3018(a), it raises every applicable affirmative defense under CPLR § 3018(b), and where FDCPA violations are present, it raises or preserves counterclaims.

For the admit-or-deny portion: you are not required to know or verify what PRA claims. Under CPLR § 3018(a), you can deny "knowledge or information sufficient to form a belief" as to any allegation you cannot personally confirm — and that is the correct response for most allegations about account balances, transactions, assignments, and chain of title. Do not admit anything you cannot independently verify from documents you actually have.

The affirmative defenses to consider in a New York PRA Answer include the following. First, lack of standing under CPLR § 3016(j) — PRA failed to plead the required CCFA elements on the face of the complaint. Second, failure to attach required documentation — PRA did not attach the signed contract or charge-off statement as required by the CCFA. Third, the statute of limitations under CPLR § 214-i — three years from last payment or charge-off date. Fourth, failure to state a cause of action. Fifth, account stated cannot be established because PRA cannot authenticate the account records. Sixth, the Madden interest-rate defense if the claimed interest exceeds New York's usury ceiling and was accrued post-acquisition. Seventh, arbitration clause — an agreement to arbitrate exists and PRA must arbitrate if the defendant demands it. Eighth, lack of personal jurisdiction or improper service if service was defective.

Where FDCPA violations are present — and PRA's twin CFPB consent orders document a pattern of collecting on unverified debts, using false affidavits, and filing without required documentation — consider asserting an FDCPA claim in federal court. The FDCPA entitles a successful plaintiff to statutory damages up to $1,000, plus actual damages, plus attorney's fees. An FDCPA counterclaim creates additional litigation cost for PRA and is a significant source of settlement leverage.

What you should never do: do not admit in your Answer that you owe the debt, do not call PRA's attorney to discuss the case without a plan, do not promise to pay, and do not ignore the lawsuit. The 20- or 30-day Answer deadline is unforgiving.

New York has assembled one of the strongest consumer protection regimes in the country for debt collection defendants — and a regime that maps almost exactly onto the conduct the CFPB sanctioned PRA for in 2015 and again in 2023.

The Consumer Credit Fairness Act (CPLR § 3016(j) and related provisions, effective May 7, 2022 for pleading requirements) is the centerpiece. It requires the six-element complaint disclosure, the signed contract or charge-off statement attachment, and applies the same six-element requirement to default applications under CPLR § 3215. The CCFA also shortened the credit-card SOL to three years under CPLR § 214-i, effective April 7, 2022.

The Fair Consumer Judgment Interest Act, signed as part of the same November 2021 legislative package as the CCFA, amended CPLR § 5004 to reduce the post-judgment interest rate in consumer credit cases from 9 percent per year to 2 percent per year, effective April 30, 2022. Critically, the rate change applies retroactively to judgments entered before April 30, 2022. This matters for PRA defendants because PRA's enforcement strategy includes holding and aging old judgments with accumulated interest. At 9 percent compounding, a $5,000 judgment grows to roughly $10,000 in eight years; at 2 percent, that same judgment grows to about $5,850. Old PRA judgments are dramatically less profitable to pursue than they were before 2022, which reduces PRA's leverage when it tries to collect on aged New York judgments.

New York General Business Law § 601 and related provisions prohibit false, deceptive, or misleading representations in the collection of consumer debts. While GBL § 601 is primarily enforced by the New York Attorney General, it informs the definition of unlawful conduct and supports federal FDCPA claims.

The federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., applies directly to PRA. PRA is a "debt collector" under the statute. The FDCPA prohibits false statements, misrepresentations of the amount or character of the debt, threats to take actions PRA does not intend to take, and abusive collection conduct. Violations entitle the consumer to statutory damages up to $1,000, actual damages, and attorney's fees in federal court. PRA's twin CFPB consent orders — documenting collection on unverified debts, use of false affidavits, and suit-filing without required documentation — are direct evidence of FDCPA-compatible violations.

Important scope note: New York did not participate in any multistate attorney general settlement against PRA, and there is no New York AG enforcement action against PRA at scale comparable to actions in certain other states. The protections above are the operative framework for New York defendants.

After you file your Answer with the New York court clerk and serve a copy on PRA's attorney, the case enters discovery. Discovery in New York consumer debt cases is governed by CPLR Article 31 and gives each side broad rights to demand documents and information from the other.

In a PRA case, discovery is where the CCFA chain-of-title defense gets tested in practice. Under CPLR § 3120, you can serve a notice for discovery and inspection demanding production of: every assignment document in the chain from the original creditor to PRA; every bill of sale; the original cardholder agreement; the complete account history from origination through charge-off; and all records related to the charge-off balance itemization. PRA must respond within twenty days under CPLR § 3120(2). Given PRA's CFPB enforcement record — twice sanctioned for failing to obtain and maintain exactly this documentation — the odds of a gap in PRA's production are materially higher than with a typical commercial plaintiff.

What very commonly happens after a real Answer is filed in a New York PRA case is a settlement offer. New York practitioners consistently report that PRA settles real-Answer cases for forty to sixty cents on the dollar — and sometimes far less when the debt is near the edge of the three-year SOL, when CCFA disclosures are defective, or when the original cardholder agreement cannot be located. PRA bought the debt for pennies; their incentive to settle rather than litigate a contested case with document-production obligations is strong.

If the case does not settle, it proceeds on the court's calendar. In New York City Civil Court, consumer credit cases under $10,000 often move through the dedicated consumer credit transactions calendar. Outside New York City, cases may proceed in District Court or City Court depending on amount and geography; cases over $25,000 are in Supreme Court. A meaningful share of New York PRA cases are voluntarily dismissed after discovery, particularly when CCFA defects are clear or the debt is time-barred.

Answered is a self-help legal platform built for pro se defendants in consumer debt collection lawsuits. The New York playbook was reviewed by a New York-licensed consumer-rights attorney and is built around the specific statutes, rules, and doctrines that govern PRA cases in this state — the Consumer Credit Fairness Act (CPLR § 3016(j)), CPLR § 214-i, CPLR § 7503(a), the Madden doctrine, and the Fair Consumer Judgment Interest Act.

When you upload your summons and complaint, Answered does the following: it reads your service date and calculates your 20- or 30-day Answer deadline under CPLR § 3012; it scans the complaint for CCFA pleading defects — missing chain-of-title disclosure, missing charge-off itemization, missing signed-contract attachment — the exact defects the CFPB sanctioned PRA for in 2015 and 2023; it identifies whether the claimed debt may be time-barred under CPLR § 214-i's three-year clock; it checks whether an arbitration clause is likely enforceable under CPLR § 7503(a); and it flags whether post-acquisition interest in the complaint may implicate Madden.

The output is a court-ready Answer formatted for the correct New York venue — Civil Court, City Court, District Court, or Supreme Court — with the proper caption and case style, and all applicable affirmative defenses drafted under CPLR § 3018(b). Answered also generates a CPLR § 3120 discovery request package designed to push PRA to produce or fail to produce the chain-of-title documents required by the CCFA.

Pricing is simple: free to start. The Answer Packet is $60 to unlock a filing-formatted Answer, print/PDF workflow, and filing checklist. Full Defense is $99 if you need deeper case analysis, motions, discovery, counterclaims, playbooks, or case chat. No subscription. No per-document charge.

The platform was built by John DiSalle, who was sued by Plaza Services LLC — another debt buyer — in Eau Claire County, Wisconsin in 2025. He had no lawyer and had never been in a courtroom. He read the original credit agreement, filed a Motion to Compel Arbitration, and the plaintiff dismissed the case when it failed to comply with AAA's procedural requirements. He built Answered from that experience so other defendants do not have to assemble the defense from scratch.