Posts Tagged ‘’

Debt Collection Lawsuit for Unpaid Balance of a Car Loan Contract

Friday, March 8th, 2013

Question: About three years ago, I was unemployed and did not have enough money to keep paying for the insurance, gas, and installment payments. I contacted the finance company and they told me to surrender my car at the dealership and they would take care of the paperwork. The car was in great condition and I got a notice from the lender after the drop off that they would sell the car at an auction if I did not want the vehicle back. I thought that it would be over, but it wasn’t. They sent me a bill for the unpaid balance, reported it on my credit reports as a repossession, and now they hired a debt collection law firm from Orange County, which is pursing me in court. I was served with the debt collection lawsuit yesterday.

My response:
Please review my legal guide on which explains the California consumer’s rights following repossession of a motor vehicle. The fact that you took it yourself to the dealership and voluntarily surrendered it during business hours rather than have a repo agent come to your home at night to seize it does not change the fact that it was a repossession and the finance company’s duty to give you proper notice before they may sell the vehicle at auction or private sale. Essentially, before the finance company may sell the vehicle and then have the right to the unpaid balance, they must send you a proper notice of intent to sell or dispose and then perform the sale in a commercially reasonable manner. More details are in my repossession legal guide.

Once you have an idea of the substantive law regarding repossession from my legal guide, now you can review my blog on your options and the civil procedure for defending a debt collection lawsuit, in my “Next Steps” blog posting. That blog posting provides guidance on the defendant’s options when receiving a debt collection lawsuit and how much time is appropriate to avoid a default judgment, as some people confuse a hearing date with the due date for a proper, written response. Usually, the defendant has 30 days to file the defense papers in court from date of personal service by a process server.

To reduce the risk of losing and a money judgment entered against you, I’d recommend hiring an experienced consumer attorney who handles debt collection lawsuit defense. Most of these cases are settled or dismissed, once the consumer and his or her lawyer see what documents the debt collection law firm has or is missing. Sometimes the notice of intent was missing a required disclosure or the amounts were not correctly stated or the vehicle was not sold in a commercially reasonable manner. These are challenging arguments to present in court and not for the do-it-yourself types, even if you’ve been in a courtroom before.

Robert Stempler
Twitter @RStempler


Credit Card Lawsuit: A Money Judgment Is Not Inevitable

Thursday, March 15th, 2012

I know that I owe this credit card debt. I don’t dispute it, though I don’t have money to pay it. Is there any point to fighting the credit card lawsuit? Shouldn’t I just declare bankruptcy, so that my wages will not be garnished for many years?

My response:
It may seem bleak, right now. You’ve just been sued by a professional debt collection attorney.  You are not sure what your options are or how to best proceed. My web site’s homepage has several short videos which you should watch, starting with #1 on understanding your six options.

Bankruptcy is one of the options, but please give each of the six options your careful consideration, both with respect to the lawsuit itself and your overall financial situation. I suggest that you submit a detailed account to an experienced attorney to help you get a handle on your rights and options, so that whatever you decide to do, you will understand and possibly be happy with the decision and outcome.

The one thing about bankruptcy is that it often can be done later. Other options need to be considered right away and a certain process and timetable followed, but bankruptcy often can be done later, if necessary. Sometimes, bankruptcy is appropriate, and sometimes it is better to try an alternative and if that fails, then review bankruptcy later. Sometimes, in fact, bankruptcy must be delayed, such as when there are income taxes to be discharged or other issues to be handled before the bankruptcy can be filed.

Simply because the credit card lawsuit is for a debt that you stopped paying a while back, does not make a judgment against you in court inevitable.  One of the options discussed in the video is settlement. You can settle and not have any judgment or risk, if both sides agree to a settlement that you can afford to comply with. I have a legal guide on Avvo on documenting settlement agreements.

Also, if you defend this lawsuit, it is entirely possible that the plaintiff will not ready to take the case to a judgment and may dismiss their claims. I have defended many cases in which this was the result. Maybe it is me or the way that I take care defending my clients.  Or, perhaps the debt was not that easy to present in court or there was something in the paperwork that may have been challenging.  Plaintiff collection agencies and creditors have the right to dismiss before trial, even on the day of trial.  Sometimes they dismiss at trial when they see an experienced debt collection defense attorney show up to defend the case, with papers for the judge to read.

Or, perhaps after the trial presentation. the court determined that the plaintiff’s evidence was inadequate or improperly presented. Perhaps the plaintiff fails to satisfy the rules of evidence for key evidence.  Perhaps the debt collection lawsuit was filed after the statute of limitations had expired or some other defense to the lawsuit was available, such as a prior settlement or illegible or lost documents.

There are so many reasons and possibilities that can occur in any debt collection lawsuit, which can take several months to more than a year to get from filing to trial.  With an experienced attorney defending his or her client against a debt collection lawsuit, a positive outcome is more likely, making bankruptcy or a money judgment not inevitable.

Robert Stempler
Twitter @RStempler

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

Freebies that Make Your New Year Bright

Friday, December 17th, 2010

The best thing you can do to ensure that you are not the victim of identity theft and that there are no bogus default judgments filed against you by debt collection lawyers in the court system is to check your credit report.  Now is a great time to get your credit report, because it will help you start the coming year by cleaning your financial slate.

Anyone with a television or a radio knows how to get a credit report, because the advertisers want you to believe it is free and memorize their jingle.  Free credit reports do not pay for expensive TV commercials and radio spots. Charging you an annual subscription and other fees is how they “get ya” to help them make a profit.  Besides, a report that merges the big three credit reporting agencies into one, mish-mashed report can be difficult to decipher who is reporting what.

Instead, I advocate people order every 12 months their annual credit report from, which is a web site set up by Experian, Equifax, and Trans Union to comply with federal law that requires them to provide every consumer with a free credit report once per year.  Here is a link to the Federal Trade Commission that has more information about the annual free report: At this site, you can order one credit report at a time from each of the big three agencies.  For your privacy and protection, you must answer correctly some questions, such as your monthly mortgage payment, the name of the lender on your home mortgage, or how much was the original loan balance. The system allows you to print or save the report to your hard drive. If you save it, then you may print or view it on screen as many times as you like. If you exit without printing or saving the report, then the system will not let you view it for another 12 months for free.

To find out if there are any debt collection lawsuit default judgments against you, view the area on the report that shows public records.   Public records are court judgments, tax lien filings, and bankruptcy filings.  Some credit reports also show certain debt collections in this area.  There are other ways to see if a court has any judgments or cases against you, which is the subject of a legal guide I have on and another blog posting.

If the report contains any judgments, accounts, or inquiries by companies with whom you never had a credit relationship nor have authorized them to review your credit reports for an application for credit, employment, or insurance, then you may be the victim of identity theft or an attempt to steal your personal information and illegally use your credit. I prepared for a legal guide on how to protect yourself from identity theft, which is at this link:

My other web site has a free sample letter that you can send by Certified Mail to companies that you do not recognize on your credit report under the inquires section.  See sample letter 4.1 at:

Happy New Year,
Robert Stempler