Archive for September, 2010

Pres. Bill Clinton Error on “Meet the Press” about Credit Reporting

Monday, September 27th, 2010

On September 19, 2010, Pres. Bill Clinton made several remarks about the current economic crises on NBC’s “Meet the Press.”  In particular, the President stated that “over two million of our fellow citizens are living in homes that are worth less than their mortgages, so if they move, their credit is ruined for life.”

Clip of this interview may be available at, last linked at:

Perhaps President Clinton was exaggerating the impact of a foreclosure or short sale on a person’s credit report to make his point, that more people need more freedom to move to places where their job skills are needed by employers.  The fact is, a foreclosure and other negative credit entries cannot be reported for the rest of your life, they must be removed after seven years.  (See 15 U.S.C. § 1681c(a).)

The relevant exemption in the Fair Credit Reporting Act (FCRA) to the seven-year limit is for credit transactions where the principal amount exceeds $150,000 and jobs applications where the annual salary is expected to be $75,000 or more. (See 15 U.S.C. § 1681c(b).)

The other exception to the seven-year rule may also apply to unpaid judgments, such as on debt collection lawsuits and credit card lawsuits that have resulted in a judgment that remains unpaid. Such a judgment could remain enforceable in California for up to 20 years, if timely renewed.  While there is no definitive interpretation of this point, a credit reporting agency might report a California unpaid judgment for up to 20 years, which is still not “forever.”

Under California law, our anti-deficiency statutes prevent a lender to obtain a deficiency judgment on many secured, real estate loans.  The facts need to be evaluated individually to ensure that the anti-deficiency statutes apply, but please review sections 580a thru 580d of the California Code of Civil Procedure, or contact me or a real estate attorney for an evaluation. With our anti-deficiency statutes, more people should properly evaluate their situation to learn if the are able to leave their homes that are upside-down to seek employment.

Robert Stempler

Dave Ramsey Outs Credit Card Collectors for Over-the-Top Tactics

Sunday, September 26th, 2010

For all consumers who have been victimized by debt collectors and the rest of America who has only heard the stories and were not sure if the victims were exaggerating, you need to watch the Dave Ramsey video on at this link:

Mr. Ramsey responds to a letter by the president of a debt collector known as Global Acceptance Credit, located in Arlington, Texas.  In the video, Mr. Ramsey hold no punches as he read and then immediately critiques each line in Global Acceptance’s letter. Mr. Ramsey does this in contest of his 20 year history dealing with debt collectors and numerous victims, some of which are described during the video. The video concludes when Mr. Ramsey states, “credit card collectors are scum.”

Mr. Ramsey also refers to the Fair Debt Collection Practices Act as being violated daily and seriously by debt collectors and asserts that the threat to garnish someone’s wages before a debt collection lawsuit has been filed violates the Act.  I agree that such representation might violate the Act, but not always.

Robert Stempler

Debt collectors of Payday Loans sink to new low, but certainly can go much lower

Wednesday, September 22nd, 2010

In a recent news story, Police in West Hartford, Connecticut have been putting out the word to beware of debt collectors from India calling consumers in the United States.  The debt collector caller tells the person that you will be “facing federal prosecution over a bad debt from two years ago.”

The debt in question was a so-called “Payday Loan.”  Debt collectors  of Payday Loans  frequently operate far outside of the debt collection harassment laws, some even operate far outside of North America.  They skirt the law frequently and with reckless abandon, because they know from experience that  the consumers and family members whom they are calling either do not know that such harassing calls are illegal or the consumers fear that consulting with an attorney to exercise their rights may make things “worse” for them.

Even more serious are the number of debts that these debt collectors are able to collect from consumers who were not a party to the debt, but their names are the same (or sort of similar). Or the victim knows the debtor.  With over a third of a billion people living in the United States and almost every one of us searchable online by name or address,  people are finding that many debt collectors do not care who pays the debt, so long as they convince someone to pay it.

Sometimes, debt collection lawsuits are used for the same improper end.  Debt collection law firms (such as the now-defunct Mann Bracken national law firm) file numerous debt collection lawsuits on credit card accounts against consumers who are the victims of identity theft.  Similarly, they also file many debt collection lawsuits in the actual debtor’s name, but collect the default judgment against someone else, with the same (or similar) name.  These are people who don’t even know a debt collection lawsuit was filed against them, having been denied the most basic due process right to receive notice and the opportunity to defend the lawsuit and prove they are not the debtor.

Can a debt collector or debt collection attorney go any lower than getting average folks not liable for a debt to fork over hundreds or thousands of dollars to end the calls, threats, and other harassment?  Stay tuned, we live in interesting times.

Today A Court Entered Money Judgments Against Consumers Who Tried DIY Lawsuit Defense

Thursday, September 2nd, 2010

This morning I had an appearance in court for a client in Los Angeles Superior Court (LASC).  The court’s docket was very busy, as most state court dockets have become since the economic crisis.  Virtually all courthouses are packed with banks, lenders, and debt collectors suing consumers on unpaid credit cards, medical bills, payday loans,  vehicle repossessions, and mortgage loans.

Whenever someone wants to appear in California Superior Court to defend a case, the clerk of the court is required to charge a “first appearance fee,” which is usually $200 to $330 per person.  If the lawsuit names both spouses, then they should expect to pay $400 to $660 just for the court’s initial fees in one case.

While I waited an hour and a half for my client’s case (Asset Acceptance sued my client) to be called, I had the chance to observe other lawyers and people who were trying to handle the case for themselves, as defendants.  It was sad that these nice people paid their hard-earned money for the first appearance fees to the clerk, only to have the judge enter a judgment soon after, because of the defects in their paperwork.

Maybe these good people thought that they may be able to delay having a money judgment against them for six months or a year.  Or maybe they thought that they could make it to trial and convince the court to not award a money judgment against them or it should be much less.

However, because the papers that these people filed were  improper, they now will have a larger total judgment, because of additional attorney’s fees that may be added to the principal and interest.

Below are the rulings in two of the cases, in this courtroom this morning:

Capital One Bank v A_______
Plaintiff’s motion for judgment on the pleadings is granted.
no affirmative defenses
judgment for plaintiff.
principal $3935.19
interest 1070.91
atty fees 326.11
costs 302.00
total 5634.21

Chase Bank v R_______

Plaintiff’s motion for judgment on the pleadings is granted.
answer does not state facts sufficient to constitute a defense
judgment for plaintiff.
principal $17062.10
interest 1257.45
atty fee 901.86
total 19221.41

I wish these people would have contacted me or someone who could have steered them into a more productive use of their resources of time and money.  Even for those situations where the court will waive the court fees, because they are unemployed or have very low income, it still seems unproductive to fight the lawsuit for a month or two, then have a judgment entered against you.

Please, if you or someone you know has been served with a debt collection lawsuit, contact an experienced collection defense attorney immediately, so you will hear your options and make the best decision, under the difficult circumstances.

If you have questions about credit card and debt collection lawsuits, please feel free to contact me for a consultation. I can also be reached by using the contact page on or

Robert Stempler