Posts Tagged ‘debt collection attorney’

« Older Entries

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 Avvo.com 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
www.StopCollectionLawsuits.com
Twitter @RStempler

Facebook: www.facebook.com/SoCalConsumerLawyer

Tags: , , , , , ,
Posted in DIY Lawsuit Defense, FAQs Collection Lawsuits, Repossession, Stop Collection Lawsuits | No Comments »

Living Paycheck to Paycheck, Debt Collector Wants Too Much to Settle

Monday, February 18th, 2013

Question: Like so many others in this economy, I can barely pay my current bills, so I had to stop paying the minimum on some of my credit cards. The phone calls and final notices for payment from the banks stopped about a year ago, but I just received a letter with a settlement offer from a debt collection company, which also says that I can dispute the debt within 30 days of receipt. What do you suggest? At the end of the month, there is still nothing left over, after regular expenses, living as cheap as we can. I cannot pay the settlement, but I am afraid their next move will be to sue me in court, like your website says. My wages are higher than the bankruptcy means test amount, so I need help.

My response:
As you know, you are not alone. Now, 41% of Americans live each week paycheck to paycheck, according to a recent survey by Allstate, covered in the LA Times Business/Money Section. After several months of no credit card payments, the bank charged off your account as a bad debt. A charge off is an accounting term to show that the debt is probably not collectable, so bank auditors will no longer allow this to be considered an asset of the institution.

At that point, the credit card bank reviewed its uncollectable accounts and sold many of them to a debt collection agency, known in the industry as a “debt buyer.” Either this debt collection agency or another debt collector is now contacting you to settle this debt, which now belongs to them. If you do not settle soon, they may refer the debt to a collection lawyer licensed in California, who will probably file a lawsuit in the Superior Court that covers where you live, if settlement arrangements are not made in writing. I explain the reasons in an article on my website, Understanding Why You Were Sued.

It can be less costly for the consumer to settle when no lawsuit has been filed and the lawyer has not been retained, because the debt buyer has not paid for those costs and fees. However, depending on the debt buyer’s policies, it still may be unaffordable or you may feel that they want too much to settle the debt, which did not cost them much to buy. Bear in mind, however, that if they sue you in court and win a money judgment, the amount will probably be the full balance on one of your last statements, plus accrued interest, court costs, and maybe attorney’s fees. The judgment may then appear on your credit reports and be secured as a lien on any real property (such as your home) by recording an abstract of judgment with the County Clerk or Recorder’s Office. There are numerous other ways that the collection agency’s lawyers can enforce this debt, such as by levying the consumer’s bank account and wage garnishment.

As painful as a settlement would be now, a worse alternative is having to pay this entire account plus interest and attorney’s fees on a money judgment that itself yields 10% interest per year and many costs can be added to the balance. By the same token, I would not accept any settlement offer that the consumer cannot ensure will be paid, exactly as promised. This would only put you in a worse position, as the discount that you negotiated in the settlement will be lost and the payments will merely be applied as credits towards the full balance due.

When agreeing to a debt collection settlement, you as the debtor should know that the collection agency will require you to acknowledge in writing the full balance due. If you miss one or more of the settlement payments, then they will have a much easier time enforcing in court the full unpaid amount of the debt. This would not limited by the settlement amount. This lawsuit would also not be limited by the fact that some debt buyers lack adequate documentation of their debts and it can challenging to obtain the full records for the account.

Your question also asked about a written dispute, because the debt collection letter states that you have the right to get it verified in writing or to dispute it. You may want to access the free consumer letters on my other web site, sample letter #1.1, which contains the language that I recommend for this purpose. Be prepared, however, for a simple letter back from the debt collection agency that says we have verified it. There are court cases that make this an adequate verification of the debt, so they can continue their collection efforts. I am not aware of potential harm from sending the dispute letter, but asking them to verify the debt in writing can make them more “aware” of you.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Facebook: www.facebook.com/SoCalConsumerLawyer

Tags: , , , , ,
Posted in FAQs Collection Lawsuits, Options to Bankruptcy | 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

Tags: , , , , , ,
Posted in DIY Lawsuit Defense, FAQs Collection Lawsuits | No Comments »

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

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

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

Tags: , , , , , , , , ,
Posted in default judgments, FAQs Collection Lawsuits, Service | No Comments »

Hospital Overcharges Discovered After Signing A Settlement with Debt Collection Law Firm

Saturday, May 5th, 2012

Question:
I was served with a debt collection lawsuit for an unpaid debt at a hospital. The amount seemed high, but I was not sure what to do and was afraid of having a default judgment entered against me, if I did not do something before my due date to respond to the complaint. I had not contacted any lawyer, so I did not know my rights.  I spoke with someone from the collection lawyer’s office and they sent me a stipulation agreement to settle in full, which I signed and returned, because the payments were affordable. I now learned from reviewing the hospital’s billing records that I was badly over charged and the amount that I agreed to pay was much more than I really should owe. What can I do about this?

My response:
Hospital overcharges and billing errors of uninsured patients are one epidemic that the medical profession has not done much to address. I have represented consumers sued on medical debts, including a couple of cases involving hospitals, which resulted in substantial billing adjustments for improper or excessive charges and errors.  Negligent or ineffective treatments may be one further area for adjusting excessive bills, when appropriate and timely raised by the patient.

In this situation, courts typically enforce written settlement agreements, unless you have convincing evidence that the agreement was induced by fraud. The fact that you did not investigate the bill before signing the settlement agreement may not be enough to avoid the settlement afterwards. Before deciding to not pay the settlement, please consult an attorney with the documentation and any evidence of fraud.  Not paying a settlement usually allows the debt collection attorney to obtain a full money judgment against you, which may make a bad situation worse, as this will show up on your credit report, wage garnishment, and levies on your bank account.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Tags: , , , ,
Posted in Uncategorized | No Comments »

Exemptions for Retirement Pension and Social Security Benefits

Thursday, March 8th, 2012

Question:
A bank got a money judgment on me for an old credit card debt in a debt collection lawsuit. I receive retirement from my state job and Social Security benefits. Can they garnish either of these?

My response:

Except for child, family, or spousal support, public retirement benefits are exempt from garnishment, per Cal. Code of Civil Procedure, Section 704.110. Similarly, private retirement benefits are exempt from garnishment, per Cal. Code of Civil Procedure, Section 704.115.

Be sure you notify the bank, credit union, or other institution in which such funds are electronically deposited that these funds are exempt from levy.  Verify that they understand the funds are exempt and should not be released if levied.  Otherwise, find another financial institution which will reject attempts to levy exempt public retirement funds and Social Security Benefits, per Cal. Code of Civil Procedure, Section 704.080.

Do not put other funds in the account with exempt funds, or those funds may be levied and the funds applied to satisfy a bank levy.  If the account balance is below $1225 for a single account, then the bank should automatically consider them exempt, under Section 704.080, subdivision (b)(1), for direct deposits. There are other amounts that are automatically exempt, so please see that statute to see if your situation applies.  Otherwise, keep no more than the exempt amount in the account, if an outstanding money judgment is lurking against you.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Tags: , , , , , ,
Posted in FAQs Collection Lawsuits | No Comments »

Tips to a Former Small Business Owner, Now Trying to Settle Remaining Debts

Friday, December 30th, 2011

Question:
I had a small construction business that went under a couple of years ago when housing took a nose dive.  Some business debts remain and I am getting calls from a manager of one of my suppliers, who wants me to settle up on a $2500 account, but I have nothing to pay them. They are now threatening to sue me for the debt.  Any suggestions? Should I call the manager?

My response:
If you can borrow the funds from family and friends to settle the entire debt for less than the full balance due, then that is a good reason to negotiate with the manager.  I would not propose that you simply borrow the full amount from your friends and family, so that you would owe the same amount of debt to them. When your pockets are empty, that is the time to negotiate with your creditors to settle for much less than the full amount, such that you reduce your debts to something that you can pay off quickly to your friends, when things turn around for you.

In settling any debts, be sure that you have written confirmation that the amount you are paying will settle the full balance.  It is not unusual for a debtor to believe that they have negotiated a very good settlement, then learn later that the money paid was applied merely as a credit towards the balance, and the creditor still demands payment on the rest (or files a debt collection lawsuit) or has assigned the unpaid balance to a debt collection agency.

I have posted on Avvo.com three legal guides on how to negotiate a debt, including specific information on the documentation that should be prepared to ensure that the debt is considered fully satisfied by both sides.  Link to Avvo.

Robert Stempler
www.StopCollectionLawsuits.com

Tags: , , , , , , ,
Posted in Uncategorized | No Comments »

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
www.StopCollectionLawsuits.com

Tags: , , , , , , , , ,
Posted in Uncategorized | No Comments »

A Judgment in a Debt Collection Lawsuit is Not Inevitable

Sunday, July 3rd, 2011

Question:
I found out I had a judgement for wage garnishment, but I was never served any papers. Another lawyer on Avvo.com 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?

Response:
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
www.StopCollectionLawsuits.com

Tags: , , , , , , , , , ,
Posted in FAQs Collection Lawsuits, Options to Bankruptcy | No Comments »

« Older Entries