Sued by Portfolio Recovery Associates in South Dakota? Here's What to Do Next

2015 · consent order

$27M total ($19M consumer refunds + $8M civil penalty)

CFPB found that PRA collected on unsubstantiated debt, filed misleading affidavits in debt-collection lawsuits, misrepresented its intent to prove debts if contested, and sued consumers on time-barred debts.

CFPB source

2023 · consent order

$24M+ total ($12.18M consumer redress + $12M civil penalty)

CFPB found that PRA violated the 2015 order by continuing to collect on unsubstantiated debt, suing without required documentation, suing on time-barred debt, and failing to investigate consumer disputes in its credit reporting.

CFPB source

Statute of Limitations Defense

In South Dakota, the statute of limitations for credit card debt is 6 years. If your last payment was more than 6 years ago, the debt is time-barred. Portfolio Recovery Associates has been the subject of CFPB findings related to suing on time-barred debts — check your dates carefully and raise the SOL defense in your Answer.

Lack of Standing / Chain of Title

As a debt buyer, Portfolio Recovery Associates must prove they actually purchased your specific account. Demand the complete chain of title — the purchase agreement, bill of sale, and assignment documents. In South Dakota courts, failing to produce this documentation can result in dismissal.

Challenge the Amount

Demand a complete accounting from the original creditor's last statement through the current claimed balance. Any unauthorized fees, post-charge-off interest, or collection costs not in the original agreement should be disputed line by line.

South Dakota Wage Garnishment Exemptions

Only 20% of disposable earnings can be garnished. Head of household gets additional protections.

South Dakota Deceptive Trade Practices Act

In addition to the federal FDCPA, South Dakota's South Dakota Deceptive Trade Practices Act may provide additional protections and remedies against Portfolio Recovery Associates's collection practices.

South Dakota Court System

Small claims limit $12,000. Circuit court handles larger civil cases. Filing fees in South Dakota typically range $40-$200.

Who is Portfolio Recovery Associates?

Portfolio Recovery Associates (PRA) is a major debt buyer owned by PRA Group, Inc. They purchase defaulted consumer debts from banks and credit card companies and pursue collection through calls, letters, credit reporting, and lawsuits.

Has PRA been in trouble with regulators?

Yes. In 2015, the CFPB ordered PRA Group to pay $108 million for using litigation tactics that violated the law, including suing consumers without verifying debts and collecting debts that were not owed.

Can I beat a PRA lawsuit?

Yes. Many PRA lawsuits can be successfully defended by challenging their standing to sue, demanding proof of the chain of title, raising statute of limitations defenses, and challenging the accuracy of the amount claimed.

What should I do if PRA contacts me?

Request debt validation in writing within 30 days of their first contact. Do not acknowledge the debt or make any payments, as this could restart the statute of limitations in some states. Consider consulting with a consumer rights attorney.

Can PRA garnish my bank account?

Only after obtaining a court judgment. If PRA sues you and you do not respond, they will get a default judgment that allows wage garnishment and bank levies in most states. Filing your Answer is the critical first step to prevent this.

How long to respond in South Dakota?

30 days from service.

What is the SOL?

6 years for all contract types.

Can wages be garnished?

Yes, but only 20% of disposable earnings.

Where are cases filed?

Small claims up to $12,000. Circuit court for larger amounts.

How much of my paycheck can a debt collector garnish in South Dakota?

South Dakota provides slightly stronger wage garnishment protection than the federal minimum. Under SDCL § 21-18-1, after a judgment, a creditor can take the lesser of 20% of your disposable earnings or the amount by which your disposable earnings exceed 40 times the federal minimum wage per workweek. Disposable earnings means what is left after legally required deductions like taxes and mandatory retirement contributions. The 20% figure compares favorably to the federal 25% floor used by most states. South Dakota also allows a debtor to claim a head-of-household exemption that can further limit the garnishment. Federal student loans, taxes, and child support follow different rules and can result in garnishments above the 20% cap. If a collector is threatening to garnish more than the statutory cap for a non-government debt, that is a basis for objection and potentially an FDCPA violation.

What is the statute of limitations on debt in South Dakota?

South Dakota applies a six-year statute of limitations to most written contracts and account debts under SDCL § 15-2-13. Open accounts and goods sold and delivered also fall under the six-year period. The clock generally starts on the date of the first missed payment that was never cured. Once six years have passed without a payment or written acknowledgment, the debt is generally time-barred. Making a partial payment or written acknowledgment of an old debt can restart the clock, so do not pay anything on an old debt without legal advice. For installment loans, courts sometimes apply the limitations period to each missed payment, although acceleration by the lender starts the full balance running. If you are sued in South Dakota on a debt that is more than six years past the last payment, raise the statute of limitations as an affirmative defense in your answer. The defense must be raised or it is waived.

Can I lose my home in South Dakota if a debt collector wins a judgment?

Generally no. South Dakota has a strong homestead exemption under SDCL § 43-31. The exemption protects a homestead, defined by acreage and use rather than dollar value, from execution by general unsecured creditors. For an urban homestead, the exemption covers one acre with the home; for rural property, it covers 160 acres. There is no dollar cap for most claimants. This means a debt buyer who wins a judgment against you for a credit card or medical debt usually cannot force the sale of your home in South Dakota. The exemption does not apply to mortgages, mechanic's liens, or property taxes, all of which can still result in foreclosure or tax sale. A judgment lien may still attach to non-homestead real estate, and the homestead protection only applies to your primary residence, not to a vacation home or rental property. If you are facing a judgment, claim the homestead exemption in any execution proceeding.

I was sued in South Dakota small claims court. What do I do?

South Dakota small claims jurisdiction is up to $12,000 under SDCL § 15-39-45, and the process is designed to be simple and informal. When served, you will receive a complaint and a notice with a specific court date. Show up. If you do not appear, the court will almost certainly enter a default judgment against you. Bring all documents you have, including the original contract if available, payment records, and any letters from the collector. Make the debt buyer prove ownership of the debt by demanding to see the bill of sale, the chain of assignments, and the original account agreement. Many small claims debt buyer cases fall apart when the plaintiff produces only a one or two page affidavit without supporting documentation. If you lose at the small claims level, your right to appeal is limited because the small claims process is designed to be final. Consider whether a counterclaim under FDCPA or the South Dakota Deceptive Trade Practices Act is appropriate based on the collector's conduct.

Can I report a debt collector to the South Dakota Attorney General?

Yes. The South Dakota Division of Consumer Protection, under the Attorney General, accepts written complaints against debt collectors at consumer.sd.gov or by phone at 605-773-4400. The Division enforces the South Dakota Deceptive Trade Practices and Consumer Protection Act and can investigate violations, seek civil penalties, and obtain injunctive relief. To file an effective complaint, gather copies of any letters from the collector, recordings of phone calls if you have them, a log of dates and times of calls, and any documents showing the alleged debt. Submit the complaint and keep a copy for your records. Filing a complaint does not directly recover money for you, but it creates a regulatory record that can support a private action and can prompt the collector to address your individual matter. Many South Dakota debt collectors are based out of state and operate at scale, so a documented pattern of complaints can lead to enforcement that benefits multiple consumers.