Archive for July, 2011

The Four Most Common Ways that Debt Collection Law Firms Can Get a Money Judgment

Sunday, July 24th, 2011

When consumers do not pay their credit card bills and other personal debts, the credit card bank or the debt collection agency that has acquired the unpaid account receivable, will refer the debt to a debt collection law firm. I have on my web site an article that explains this process, “Understanding why you were sued.”  Here’s the link to that: Sued Article.

If the debt collection law firm cannot get the debtor to agree to a settlement, then it files the summons and complaint with the court. These terms are described on my web site in an article entitled, “Terminology of Collection Lawsuits.”  Once filed, the debt collection agency then has someone (typically a private process server or deputy sheriff) attempt “service” of the summons and complaint and other papers on the defendant(s).

Once the defendant has been served, a proof of service is prepared and filed with the court to show the date, time, manner, and address where service was performed. After the required number of days have expired, if the court does not receive a response filed by the defendant, the clerk of the court will permit the debt collection law firm to file papers for a default judgment.

A default judgment can be prevented if the debtor files a response for him or herself in court and pays the court’s filing fee or arranges for financial aid to take care of the filing fee. Because the consumer does not know what they must do next, the debt collector is still able to get a judgment against them during the lawsuit.  Sometimes, the judgment is entered on the pleadings very early in the case (see my blog posting regarding judgment on the pleadings).  More typically, the court will review the evidence and enter a money judgment for the plaintiff on a motion for summary judgment or at trial.

To review, the most common ways for a money judgment to be entered in a debt collection case are by default judgment, judgment on the pleadings, summary judgment, or judgment following trial.  I have not had the honor of meeting a consumer who is properly equipped to represented him or herself in a debt collection case, which is why the first video on my web site’s home page discusses all possible options that may be available when sued on a debt collection lawsuit.

Robert Stempler

A Judgment in a Debt Collection Lawsuit is Not Inevitable

Sunday, July 3rd, 2011

I found out I had a judgement for wage garnishment, but I was never served any papers. Another lawyer on suggested that if I file a motion to set aside the invalid default judgement, it only postpones the inevitable of the creditor getting a valid judgement against me. Should I file bankruptcy to get rid of my one credit card debt?

You get what you paid for, when an attorney offers an opinion on a web site about the “inevitable” outcome of a debt collection case, without knowing the specific facts and potential defenses. In my experience helping consumers defend these cases in the courts, there are many debt collection lawsuits that get dismissed and many more that get settled if there is no default judgment against the debtor. There is typically a higher price required to payoff a default judgment and compared with settling a debt collection lawsuit with no default judgment. Also, a default judgement shows up on your credit reports, until it is paid off (satisfied in full) or discharged.

The only thing inevitable in your case is that if you do nothing about this default judgment, it will remain in place and be enforceable until it is paid, settled, or discharged in bankruptcy. The idea of filing bankruptcy for a single debt does not make sense to me, except if you have hired a debt collection DEFENSE attorney, and the situation was not resolved in a favorable way.  There is no guarantee in court on the outcome.  Please search my blog postings for more under: “default judgment” and “bankruptcy alternative.”

Robert Stempler