Posts Tagged ‘California Superior Court’

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I was just served with a credit card collection lawsuit. Now what?

Monday, March 4th, 2013

Question: I stopped paying on my credit card a while back, because I was tired of paying a high interest rate and I did not have enough money to pay it all off. I sort of suspected that this debt would be sold to a debt collection agency for pennies on the dollar, but the papers are asking for me to pay the full balance, plus the high interest rate that I thought I was going to avoid. I contacted the company and they are holding firm on that number. I don’t have the money for this and my income is too high to qualify for a Chapter 7 bankruptcy.

My response:
First, please check out the short videos on my home page. The first video is a quick overview of all options that are possible to the situation of being served with a debt collection lawsuit. That will help you narrow down your options to the one or two that suit your situation and your own preferences. Your posting did not specify what bank had the original credit card or when you last paid it, which will help determine if they filed the lawsuit after the statute of limitations period had expired. That is very important in these cases and makes a big difference.

I’d then suggest reading my blog posting on the defendant’s Next Steps when the consumer has been sued in a debt collection lawsuit on a defaulted credit card. That blog explains 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. If you want to defend this lawsuit and have a good chance to settle for much less or possibly get the case dismissed, do not miss the deadline for filing a response or having a lawyer do this for you. It is usually 30 days from the date of being personally served, but please don’t wait for the last minute.

I don’t suggest that consumers or non-litigation attorneys try to handle the lawsuit defense for themselves, as I have seen too many people either pay way more than they should to settle with the debt collection law firm or they file papers with the court, which get stricken as being defective or improperly admit most or all of the debt collection lawsuit. Almost as bad, is when the debt collection lawyers press the case very hard against the defendant, using court procedures and formal discovery requests to overcome the defendant’s attempt to get the case to trial. I have some of these as PDFs on my website, in the Case Examples tab.

To avoid the risk of losing a money judgment for the full balance in the lawsuit plus accrued interest, I urge you to contact an experienced consumer attorney, who regularly handles debt collection lawsuit defense. An experienced attorney should be able to help negotiate a satisfactory settlement or get the case dismissed, depending on the admissible evidence that the debt collection law firm can obtain or not obtain.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Facebook: www.facebook.com/SoCalConsumerLawyer

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Posted in DIY Lawsuit Defense, FAQs Collection Lawsuits, Service, Stop Collection Lawsuits | No Comments »

Collection Call from Out Of The Blue for a Credit Card Not Paid In Five Years

Saturday, February 2nd, 2013

Question: Is there any chance that I can be prosecuted for not paying credit card from five years ago? I have been clean and on probation and received a call out of the blue that they have sued me for $2000. Help, I need to stay out of jail. They said they would not dismiss until I make a large down payment and sign an agreement for monthly payment until paid in full, but I cannot afford this.

My Response:
I am very suspicious when a consumer gets phone calls from collectors from out of the blue. If I read your question correctly, you have not heard from these people, never received any collection letters from them, and you were not served with the summons and complaint. Though you did not pay this debt in almost five years, there are those debt collection agencies which prey on consumers for old debt that are expired, because of the statute of limitations.

In California, a debt not paid in more than four years is almost always past the statute of limitations, provided that a debt collection lawsuit was not filed within the correct limitations period for the particular account. Thus, the filing of an untimely lawsuit or threatening to sue you for an expired debt also violates the Fair Debt Collection Practices Act (FDCPA) for harassment and misrepresentations. FDCPA violations can allow the consumer-victim to recover in court his or her actual damages, statutory damages, court costs, and attorney’s fees.

Since you have not received anything in writing from this collection agency, please advise this collector that you need something in writing and to send you the required initial letter, which contains the mini-Miranda statement, required by the FDCPA, for initial contacts of a consumer regarding collection of a debt. Verify that they have your correct mailing address. I do not believe that you should give them your cell phone number or email address, to protect your privacy, but you regular mailing address should be fine. You really don’t want them to contact you in too many ways, regular mail and regular phone calls at home are more than sufficient.

Assuming that they did file a debt collection lawsuit within the proper statute of limitations period, you need to get a copy of the lawsuit and understand your options. The first video of my website’s home page is “Understanding Your Options” when sued on a credit card debt. Please watch my video and a few of my blog postings, such as “Next Steps,” which explains what steps to take and the timing involved, so that you will understand the deadlines that are coming up for you. Please consult with a debt collection defense attorney to ensure that you have covered your bases.

The short answer to your question about going to jail for a probation violation is that our society does not have “debtors prisons.” We did away with that at the time we founded this Country. I would want to review the terms of your probation, but it is doubtful that missing payments on a debt or being sued for an unpaid debt would violate probation. Also, I would not tell the debt collection agent about your probation, as it is none of their business. If you discuss this, I can assure you that they will make all sorts of statement to belittle you. If they threaten you with trying to use this to get you in trouble criminally, that may also be a violation of the FDCPA.

Until you verify whether or not a debt collection lawsuit has been filed, I would ask for the documentation of this lawsuit, the debt collection letter, and check with the court’s online to see if you can determine if the documentation is genuine. Also, reviewing your own personal credit reports may help yield information about this debt collection agency and if there are outstanding judgments against you. I have a legal guide on Avvo.com that help people navigate case information that they can get for free or almost free online. Otherwise, you may need to take a trip to the local Superior Courthouse to ask of any civil cases have been filed against you.

When a debt collection agency calls out of the blue, be ready to ask for everything in writing and refuse to give in to their demands for your credit card number or banking information so that they can take your money over the phone. Until you have verified everything, you don’t know if the person on the phone is a scam debt collector or worse: an identity thief, who will take your credit card number to charge your credit to the max and your bank account information to clean out your account. Also, don’t provide this person with your SSN, DOB or DLN. All of these are private and should not be disclosed by phone from someone who happens to call you, even if they appear to know so much about a particular debt or other credit information about you.

A regular debt collection agent will understand and want to ensure that you get the information verified and in writing. A scam artist or identity thief wants you to give them the money now, right now, without anything in writing. Do not give into high-pressure tactics and risk becoming another victim of identity theft or bogus debt collection operations, collecting on time-barred debts.  Verify everything and consult with a lawyer. You could be waiving many rights by agreeing to pay on a time-barred debt from a high-pressure phone call.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Facebook: www.facebook.com/SoCalConsumerLawyer

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Posted in FAQs Collection Lawsuits, Harassment by Collectors, Identity Theft Protection, Stop Collection Lawsuits | No Comments »

DIY Collection Lawsuit Defense: Key Pitfalls

Tuesday, January 15th, 2013

Question: I am not attorney, but I want to represent myself in a debt collection lawsuit. What are the major pitfalls that I should study at the law library or online, so that I am ready to take the case to trial?

My response: There are so many books on the web that brag about having had one or two victories in court against debt collection lawyers. While I have gotten many collection cases dismissed for my clients and settled many others, when an individual expects to prevail in court on an unpaid debt, probably they have read too many web sites selling books and other materials that probably will do nothing, other than get a money judgment entered against them for the full balance, plus interest, costs and attorney’s fees.

Here are several of the major pitfalls, which is why it takes years of law school and experience defending debt collection cases, to really be able to have a sound strategy to help the client reach the outcome they desire for the case:
a. If the answer to complaint contains errors, the court may disregard it and enter a money judgment, if the Plaintiff’s attorney files a motion to strike or demurrer to the answer to complaint. Sometimes, the Defendant does not pay the court’s appearance fee.
b. The Plaintiff’s attorney sends written discovery to the Defendant or sets their deposition to answer questions under oath. If the defendant fails to respond timely and in proper form, the Plaintiff’s attorney can seek sanctions of more money or limit the important facts at trial.
c. The Plaintiff’s attorney can file a motion for summary judgment, which adds more costs to the case ($500). If granted, there is no trial, only a judgment.
d. The Plaintiff’s attorney can ask questions at trial of the Defendant, many of which might result in the court entering a judgment.
e. The court can set hearings and conferences that require both sides to attend. Missing these can cause the court to strike the answer to complaint.
f. The Plaintiff’s attorney offers evidence at trial that is hearsay or unreliable, but the defendant does not object properly or fails to explain why the evidence should be rejected, so the evidence is admitted and a money judgment entered.
g. The Defendant does not understand the rules that apply to the debt lawsuit, such as the Statute of Limitations, so they expend their efforts on incorrect views of the law and don’t pursue legitimate defenses that an experienced attorney would have found.

I have had many clients come to me after they try to represent themselves. They typically received papers from the Plaintiff’s attorney or from the court, but didn’t know how to respond, so that they are facing sanctions or have been sanctioned by the court for noncompliance. Or, even worse, a judgment has been entered at trial, but the defendant still believes that they should spend more time and money on an appeal.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Facebook: www.facebook.com/SoCalConsumerLawyer

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Virtual Law Firm Prepared Legal Papers for Debtor Pro Per, Money Judgment Now Imminent

Thursday, November 1st, 2012

Question:
I found an attorney online and used my only good credit card to have his firm prepare and file the legal forms for me to prevent a default judgment in Superior Court. This was a lawsuit on an old credit card which hired debt collection lawyers in San Diego, California. I read that the collection agency paid pennies on the dollar for my account.  My attorney said they did great paperwork, and that I can handle the rest of this myself, since their papers were so thorough, and that I should win a dismissal at trial.   Now the collection lawyers filed papers for a full money judgment, plus they want their attorney’s fees, too.  I don’t know how to respond to this and my lawyer now wants more money to prepare the papers, otherwise it will become a money judgment. No trial, just a judgment. This is very upsetting and no one told me this might happen and now I may need to explain this to the judge.  Help!

My response:
Virtual law firms preparing legal papers, without representing the debtor consumer, is a new low for lawyers.  In my 19 years as a lawyer, I understand why you should be upset. Lawyers are supposed to take responsibility for handling the case, not dump a bunch of papers onto their client without any guidance.  When a lawyer prepare the legal forms for someone as a “pro per,” then the client is 100% responsible for what happens next and for dealing with the debt collection lawyers and their debt collectors.

Did you know that the collection lawyers still call you and file papers in court to get a money judgment without trial?  Who would be comfortable with that. If you have a lawyer on the case, then you should not need to deal with debt collection calls. Filing the initial papers and sending some written requests is the tip of the iceberg, it does not win the case, without an attorney backing up those documents with actual, legal representation and efforts.

Also, what happens if the case goes to trial?  Do you know how to object to improper evidence, when to object, and what are proper objections? These are legal skills that lawyers take years to develop, even after several years studying at law school and passing the bar exam. I have read trial transcripts of a debtor who represented himself at trial, and he objected at all the wrong times and did not object to the evidence that resulted in a full money judgment against him.

I agree with you. Filing the documents for you and then leaving you to defend this lawsuit is shocking. Perhaps I am too old school, but if a judgment for the debt is entered against you, then I don’t see how this lawyer helped one bit. They charged you money and gave you some sheets of paper that looked really nice, but now you must hire an attorney to see if the case can be salvaged, before the court enters a judgment for the full balance against you. You should call me or another experienced lawyer to oppose this motion and take the immediate steps, before the trial date and to prepare for trial.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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Posted in FAQs Collection Lawsuits, Stop Collection Lawsuits | No Comments »

They did not say, “You’ve been served,” so can I just ignore the Summons Form SUM-100?

Friday, September 21st, 2012

Question: The Summons (Citation Judicial), Form SUM-100, that came with the lawsuit for an unpaid credit card debt has a handwritten date to the left of the Clerk’s signature line.  The summons does not have a date at the bottom, where it says “Notice to Person Served.”  Box 1 is checked for individual defendant.  Someone handed it to me a week ago, but they did not say anything, such as “You’ve been served!” I just received a letter from the attorney firm that says I should call them to settle, because I was served.  Can I just ignore this, until they come back? If I must respond to it, when does my 30 days expire?

My response:
The date on the summons next to the clerk’s signature is the date the summons was endorsed by the Clerk of the Court, typically the same date as the collection complaint was filed. Thus, the summons date should match the complaint filing date.  It would be pretty rare for a lawsuit to be served on a defendant the same day that it is filed with the clerk. Thus, the filing date is usually not used to calculate the due date of the defendant’s response in court.

The date when you (the defendant) must file a response in court is determined by the date and method of delivery to you of the lawsuit papers.  For instance, if the defendant was personally served (meaning the summons and complaint were handed personally to the defendant), then he or she has 30 days from that date to file a written response in court.  If not personally served, but a method known as substitute service was used, then the due date is 40 days from the mailing date, which is why I recommend people save even the envelope, to keep the postmark date on the envelope.

In California, the process server need not say anything if the defendant is being personally served.  The movies about someone saying, “You’ve been served,” either reflect laws of other states or are entertaining in their drama.  Only where the person is not the defendant, should the process server explain that they are being given the legal papers for a lawsuit for the defendant and those papers should be given to the defendant right away.  Problems arise, such as a default judgment, when the recipient receives the papers, but fails to promptly give them to the defendant.

I have on the home page of my web site, a video of understanding your options to consider, before filing a DIY response yourself, against these professional debt collection lawyers.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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How long to file papers in court, after receiving the summons and complaint via U.S. Mail?

Thursday, September 13th, 2012

Question: No process server ever approached me, but gave the summons and debt collection complaint to my wife.  A few days later, another copy arrived in the mail. I still have the envelope with the postmark. Do I still need to respond within 30 days and from when?

My response:
Under the California Code of Civil Procedure, which governs in Superior Court cases, the defendant must file their response in court not later than 30 calendar days from the date of personal service, which occurs when the server hands the summons and collection complaint personally to the defendant.

Substitute Service occurs after satisfying due diligence in trying several times to perform personal service on the defendant.  After due diligence, the process server hands the summons and collection complaint to an adult member of the defendant’s household or the person who appears to be in charge at the defendant’s place of business, then mails another copy of the summons and collection complaint to the defendant at that same address.

In this case, the process server has performed Substitute Service on you, which adds 10 calendar days, making a total of 40 days from the date of mailing for the defendant to file his or her response in court.

Some defendants receive only a copy of the summons and collection complaint by U.S. Mail and no one at their home or place of business advised them that they were served.  In those cases, you should still go on the premise that you have only 40 calendar days from the mailing date in which to file a response in court, to prevent a default judgment from being entered. Please see other blog postings about default judgments.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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Should I hide from the process server or refuse to sign for the lawsuit papers?

Sunday, September 9th, 2012

Question: I found out that a process server is trying to find me to hand me lawsuit papers. If I hide and stay away from home, so that he cannot serve me, will they eventually dismiss the lawsuit? What if I refuse to sign for it?

My Response:
That’s not how service of process works.  After the debt collection lawsuit has been filed, the court will set a return date by which the proof of service (“POS”) must be filed. The POS states that the process server handed to the defendant a copy of the summons, complaint, and any other documents, including the date, time, and location where this occurred.  It does not require that the defendant sign for the papers, nor does it require any other proof, such as video or a photo.

If the process server goes to the defendant’s home, but was unable to serve the defendant there, he or she can hand it to anyone age 18 years or older at the residence, then mail an extra copy to the residence. The POS that is filed with the court must state the name of the person served and each of the previous attempts to serve the defendant at home, and state the date on which the documents were mailed to the residence.  This is known as substitute service (aka “sub-service’), and it is a valid manner of serving a credit card collection lawsuit in California.

If a POS cannot be filed due to the process server being unable to locate defendants, either their residence or where they work, the plaintiff’s collection attorney will often ask for more time, because their process server has been trying to serve the defendants, who are evading service or not yet located.  If the process server has performed the proper steps and still unable to find the individual defendants to serve them, the court can allowed service by publication in a newspaper of general circulation.

Thus, hiding or evading a process server rarely results in the case being dismissed, due to lack of service.  Beware that sometimes the process server files a POS saying that they served the defendant, even that was not so, which can result in a default judgment being entered when the defendant did not know.  Please see my blog on no service but a default judgment was requested.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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Never Served, but Now Something Came by Mail, a Request for Entry of Default Judgment

Saturday, August 18th, 2012

Question:
What does it mean when the collection lawyers sent me a Request for Entry of Default Judgment? The only thing that I received from this law firm before now were a couple of letters, which I did not call back, because I didn’t have money to settle.  The papers show they have filed a lawsuit in the courthouse near me, which the online case summary shows they claim they served the summons and complaint by mail on me a couple of months ago. I thought that the law requires personal service of lawsuits, something called “due process”?

My response:
You are correct, there is a Constitutional principle known as Due Process, which requires that a defendant be given notice of a pending lawsuit, preferably by personal service on the defendant. However, California civil procedure permits alternative forms of service, if the process server declares that they tried several times to serve you personally at home or at work, but you were never present.  This is known as due diligence.  After due diligence, they can hand the summons and complaint to someone who is an adult at the defendant’s house or apparently in charge at your workplace and then mail a copy to you at that address.  This is known a substitute service.

If you have been substitute served, rather than the usual 30 days to respond in writing to the lawsuit, California civil procedure adds 10 days from the date of mailing, giving you or your defense attorney a total of 40 days from date of mailing to file in court your response.  One point about substitute service: it must be delivered to someone at your residence or work address, or it is invalid and can be challenged, but act promptly and consult with experienced counsel on that, as there is no standard DIY form to set aside a default judgment.

Now that a couple of months have passed since the process server said he or she substitute served you, the debt collection lawyers have sent you a copy of the Request for Entry of Default, which they have also probably sent to the Clerk of the Court to be filed.  If the Clerk files it, then it becomes an enforceable judgment against you, unless you set aside the default judgment, satisfy the default judgment by paying money to settle in full with the plaintiff, or file bankruptcy to have it discharged.

A California judgment must be renewed every 10 years, or it expires, but many collection agencies keep track of judgment expiration dates and renew it until satisfied in full or discharged in bankruptcy.  Thus, I would suggest you deal with it now, if possible, as it can remain out there forever and pop up and be very annoying and vexing at the most inconvenient times.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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How much should I offer to settle a debt collection lawsuit?

Friday, August 10th, 2012

Question: I’ve never been sued before, this is all new. I read your Settlement Guide #1 on Avvo.com, which explained many of my questions. I’m sure that I will read your other two Settlement Guides, once I know how much to offer to settle. Should I offer 10% of the amount stated in the lawsuit?  Bankruptcy is something I want to avoid.  I have a home with some equity in it, but not much. The lawsuit is not by the bank, but filed by a debt collection agency, so shouldn’t they be willing to settle for much less?

My response:
How much to offer is probably the top question on everyone’s mind.  First, understand the debt collection agent’s perspective.  The goal of the collection attorney and their agents is to maximize the recovery from each case and turn a profit for a particular portfolio of debts.

Time is money, so the sooner the funds are received, the less costly a settlement proposal can be.  If you can pay the settlement funds soon (such as within 30 to 90 days), that will usually make the settlement a lower dollar amount.  Settlements can often be approved with payments for 12 to 36 months, sometimes longer. Some companies will agree to waive interest, so long as the payments are received timely and don’t bounce.  Some debt collection agencies insist on full payment of the principal amount, if the settlement payments are made over a year or more.

Then, there are those debt collection agencies who like to squeeze everyone, because they believe they have the upper hand over unrepresented consumers.  They squeeze the debtor consumer into paying every cent, even obnoxious rates of interest and attorney’s fees.  Why bother settling if there is almost no difference between what would be the result if you go to trial and lose and making settlement payments of the full amount plus interest, etc?

The risk of heavy-handed debt collection practices is that when push comes to shove, people will learn their options (see the first video on my website’s home page).  Once they know their options, if the debtor cannot get a reasonable, affordable settlement, they may reject settlement and see if the judgment will be enforced, file bankruptcy, or hire an attorney to defend them in the collection lawsuit and likely negotiate fairer settlement terms.

Ten percent up to half of the amount in the lawsuit might be accepted by the collection company, if the debtor can show at least one good reason why the company risks get nothing and wasting its time and money in the case, if they don’t settle.  For instance, perhaps the lawsuit was filed too late, well past the statute of limitations, which should result in immediate dismissal if proven.  Perhaps the debtor has many debts and their income is such that they qualify for a Chapter 7 Bankruptcy, in which case if the debtor is faced with an unreasonable settlement posture, the bankruptcy option may be explored and the debt collection agency may get nothing.

Even if the debt collection agency purchased the debt for less than ten percent of the amount of the unpaid principal, unless the lawsuit was not filed timely or the debtor is a good candidate for bankruptcy, I would not expect the company to accept 10%. That is because they speak with debtors every day who are unable to pay.  In their view, they must turn enough accounts into a profit over the purchase price, or they will no longer have enough income to pay employees and other business expenses.

There really is no magic number to offer or that all debt collection agencies will find acceptable, each case can be negotiated, if a difficult situation is properly and accurately presented.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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Posted in Credit reporting, FAQs Collection Lawsuits, Options to Bankruptcy, Stop Collection Lawsuits | No Comments »

I was not properly served, so can I file something to dismiss the case?

Tuesday, June 5th, 2012

Question: I did not pay one of my credit cards, because it was too much for me.  Now, I received in the mail a summons and complaint for that credit card debt.  No one in my home knows anything about this, so I don’t believe that this is proper substitute service. Can I file something in Superior Court about not being served? Can I get the case dismissed or put off a long time?

My response:
Whenever the defendant located within California has not been properly served with the lawsuit, in addition to their six options that I explained in the first video on my home page, the person could file a motion to quash.  There is no check-the-box form for this motion in California Superior Court.  Motions to quash are unusual.  People should either file a response to the debt collection lawsuit or exercise one of their other options, such as settling the case.

If the defendant or his/her attorney files a motion to quash and properly presents the Superior Court with the lack of valid service, the result is often the same: the court can grant the motion to quash and some time later, the lawsuit is served properly on the defendant, who then has the given number of days to file a response in the case.  The Judge could also ask the attorney or defendant in court at the hearing: “When do you want to file a response to this lawsuit?”  In other words, you’ve won the battle, but lost the war, since a response to the complaint must still be filed and the case will proceed about the same, as if service has now been properly effected.

The motion to quash is really only an effective means of stopping a lawsuit if the case was filed against an out of state defendant, who has no contacts in California, which would mean the California Superior Court lacks jurisdiction for such lawsuit. Then the motion to quash would have a substantial effect on the outcome of the case.  For this reason, a motion to quash should be reserved for cases where the defendant is out of state, with no connections to California.

Thus, when people post on Avvo.com or ask elsewhere about not being properly served, I typically refer them to my blog posting on making their next steps count.  Defendants should respect the normal time to respond in court to the lawsuit as about the same, if they wish to avoid a default judgment and preserve all of their six options, noted in my first video.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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