Archive for January, 2011

No Easy Form to Remove a Bad Default Judgment

Sunday, January 16th, 2011

Question:
I learned that a debt collector has a default judgment against me on a credit card lawsuit, but I was not served. I need to get it dismissed.  What form would I use for this?

My response:
There is no standardized form for setting aside a default judgment.  The default case file must be evaluated.  A plan proposed. Then the appropriate papers prepared by someone who has taken the time to become familiar with the case file, the evidence available that proves lack of service, and the law that permits the court to set aside a default judgment.  Legal briefing is required and the court often requires counsel to appear for oral argument.

I have filed many such motions and other proceedings to help clients set aside a default judgment that was entered without valid service on the consumer defendant.  The papers require careful preparation and evaluation of all available evidence and the applicable law. I have also seen plenty of cases in which the consumer has tried to set aside a default judgment themselves or with limited help by an attorney, which results in the court refusing to set aside the default.

As with any court proceeding, each individual must decide whether to retain competent counsel or go it alone, acting as their own legal counsel (known as “pro per” in state court and “pro se” in federal court).  The two common mistakes by consumers for this decision are: (a) not asking an experienced collection defense attorney for a fee quote to be represented; and (b) not considering the downside price, if they fail trying to do it themselves.

In more than 14 years of working for consumers, I believe that in most cases, the cost of hiring competent defense counsel is much lower than the price of handling it without counsel.  There is no guarantee of success, but if you are not attorney, then the court will not receive the briefing that it expects, making the outcome more likely to be unfavorable, if the plaintiff’s professional debt collection lawyers mount an opposition.

One more advantage of hiring a lawyer to represent you: once the court restores the case to active status, what is your plan to win the case?  Unless you know what to do, after the court sets aside the default judgment, the debt collection agency could convince the court to enter judgment against you, if you are unfamiliar with California Civil Procedure and Rules of Evidence.

Robert Stempler

Received papers for a judgment in my DIY defense credit card lawsuit

Sunday, January 2nd, 2011

Question:
I was sued on an old credit card.  I filed an answer in court and paid the fees.  There is a Case Management Conference in a few months. Can I ignore the papers that I received from the debt collection attorney? I want to wait for the hearing and speak with the judge, but the papers show another hearing date and something about a judgment.

My response:
No, you cannot ignore these documents if you want to avoid a judgment against you.  My web site has examples of debt collection lawsuits and other common papers used in court by professional debt collection attorneys against consumers.  See:  Case Examples from the Web Site.

Many people who try to represent themselves don’t realize that their plan to speak with the judge is not what the debt collection defense attorney wants.  Judges are prohibited from giving legal advice to either side.  Seasoned collection attorneys want the court to enter a judgment in your case as soon as possible, with the least amount of work.  Keeping the court costs low also is important, unless they know the defendant cannot file bankruptcy, such as their income exceeds the means test or they filed a Chapter 7 Bankruptcy within the last few years.

Debt collection attorneys are experts in getting a judgment against unrepresented consumers and against general practice attorneys, who don’t know what weaknesses to expose at trial of the debt collection case.  In most collection cases, a default judgment is entered for the debt collector after the consumer misses the deadline to file responsive papers in court and pay the filing fee.  See the sample PDF of a “Request for Entry of Default form.”  Many consumers believe that they may wait until the hearing to file their papers or that a verification letter can protect them.  I discuss these myths on my blog posting entitled: “You are Summonsed to Court for an Unpaid Debt: Your Next Steps Count.”

After the unrepresented consumer files a response in court and pay the court fees, debt collection attorneys have several procedures that can use to get your papers stricken and a judgment entered.  I discuss some of these in by blog posting entitled: “Today A Court Entered Money Judgments Against Consumers Who Tried DIY Lawsuit Defense.”  They can also file a motion for summary judgment (known as an “MSJ”), which means that the consumer will almost always lose, unless they have an experienced defense attorney representing them.  The main problems with the MSJ is that the state court now charges $500 to file an MSJ.  Unless the collection attorney believes that the consumer will have the funds to pay this fee if a judgment is entered, they may refrain from filing an MSJ.  Thus, I expect that debt collection attorneys will file fewer of these since the court fees more than doubled from $200 before October, 2010.

Thus, I would suggest that you contact an attorney whose practice focuses on helping consumers against debt collection lawsuits.  Time is crucial, as many of the motions that the debt collection attorney may file have a limited amount of time in which to file opposition.

Robert Stempler

Twitter: @RStempler