Posts Tagged ‘debt collection defense lawyer’

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 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
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

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

Friday, December 30th, 2011

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 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

No Easy Form to Remove a Bad Default Judgment

Sunday, January 16th, 2011

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

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

Wage Garnishment on a Default Judgment. Help!

Friday, December 24th, 2010

My employer has received an order to garnish my wages. I am already living paycheck to paycheck. I cannot afford to lose any of my wages on an old debt.  I didn’t even know or receive anything about a credit card lawsuit or a judgment until this happened.  What can I do?

My response:
Many people who call me have this situation.  First, perhaps nothing will be taken from your wages or you can any part of your wages that may be garnished exempted.  Please see my legal guide on at this link, which will take you through all the steps you need to figure out how much can be deducted and how to lower that amount so it is bearable: Making Garnishment Bearable.

The next step you should also take right away: go to the courthouse and get a copy of the entire file.  You need not pay to have the court clerk “certify” the copy, a regular copy of the entire case file is fine for this purpose. If you have the case number, you may be able to go to the court’s web site and see the register of actions and perhaps print many of the documents.  I have another legal guide on on how to get civil court records online for free or almost free at:

At this point, you are ready to consult with a debt collection defense attorney, who has experience in setting aside default judgments.  Some lawyers don’t know how to get an old judgment set aside and mistakenly believe that after two years, a default judgment cannot be set aside.  That is not true, because the United States Supreme Court has held in numerous cases that the Due Process clause requires you to have your day in court, if you were not properly served.

When I am contacted for a default judgment, I typically ask for documents the client has proving where they were when the credit card lawsuit was supposedly served.  Many times a former or incorrect address is used for service. Then I will ask the client to provide me with documents proving that they lived at a different address, such as drivers license, DMV records, bank and credit card statements, lease agreements, business and official mail, and records from family court cases.  Anything that shows the actual address is good, so please do not throw away these documents, keep them organized in file folders or scanned into your computer.

Robert Stempler

You Are Ordered to Appear in Court on a Debt

Thursday, November 11th, 2010

Imagine a sheriff’s deputy coming to your home or workplace, asking for you, and handing you a legal document that summons you to appear in a courtroom on a debt collection lawsuit for a hearing or deposition. You show up at the building at the appointed time, enter the courtroom, and are sworn in by the bailiff. Then the judge or someone else asks you questions about a debt you did not pay and why you have not settled it. You provide your credit card number or sign over title to a vehicle, so that they can settle the debt, then you leave.

It’s all true, except that the sheriff’s deputy, the bailiff, the judge, and others involved are all employed by a debt collection agency, not the government. The courtroom was a mock courtroom in office facilities rented by the same debt collection agency. This happened recently to hundreds of consumers in Erie, Pennsylvania, according to charges brought by the Pennsylvania Attorney General.

The news story and video are at this Pittsburgh News site:

Yet another low for debt collectors trying to collect credit card debts in a tight economy. Who could have expected that they could go any lower than the automated phone calls that debt collectors place day and night to consumers, the calls about the debt to family members and friends, and the over-the-top harassing calls from debt collectors based outside of the United States? But, they managed a new low!

This conduct violates several provisions of the Fair Debt Collection Practices Act and may also violate laws against impersonating an officer or a government official. Don’t let this happen to you. Any document or calls to collect an unpaid debt should be carefully vetted using reliable websites or direct contact with a consumer attorney, with expertise in defending debt collection lawsuits and credit card lawsuits. And, don’t waive your rights. Ask for written verification of the debt in writing, as stated in letter 1.1 at .

Robert Stempler

Settle credit card debts yourself: It’s better than loading up the moving truck

Thursday, November 11th, 2010

In this era of tight consumer credit and mortgage lending criteria, getting financing for a home is nearly impossible. For the same reasons, selling one’s home can take months or years and require considerable price reductions to accomplish.

That is why I found financial author Suze Orman’s article in November, 2010 “The Costco Connection” magazine ( somewhat naive. A reader asked Ms. Orman what he and his wife should to do about a home “appraised” at $470,000 with a mortgage of $147,000 and too much credit card debt to handle. The reader had applied to refinance their home, but the bank refused.

Ms. Orman’s response: sell the family home and pay off all credit card debts. I have a different suggestion for this reader and others in a similar bind, while our economy continues to falter.

There was a time from about 2002 to 2007 when the housing market was taking off and mortgage loans were being offered to anyone with a job and some savings, who wanted to buy into the American dream of home ownership. After the crash, in 2008, all major lending institutions put the brakes on home ownership, as they saw property values plummet and unemployment soar.

Ms. Orman’s advice is unrealistic for today’s tight-money environment. The reader and his wife will probably end up giving away their home, to get it sold reasonably soon. How much would remain after satisfying their debts is not clear.

Had the reader asked a debt collection defense lawyer such as me what to do, I would have reviewed with them all possible options, but I would have focused them on trying to negotiate all their debts for a discounted amount, starting with not paying the credit cards for a while. This will result in settlement offers from the credit card bank for a discounted amount. Yes, it will hurt your credit scores for several years, but at least you would keep your home and no longer have the credit card debts hanging over you.

Many people may consider this a very aggressive strategy. It requires that you be patient, carefully saving every dollar to be able to accept the settlements when offered, and a backup plan (that is, “Plan B”), if there are one or more credit card lawsuits if you cannot settle. Plan B is to defend any lawsuits using a debt collection attorney with considerable experience defending these cases. Perhaps you will win such lawsuit with the lawyer or perhaps you can accept a settlement offer that is affordable, negotiated by the lawyer.

Robert Stempler