Posts Tagged ‘debt collection lawsuits’

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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Trying to get Dismissal With Prejudice After Voluntary Dismissal

Friday, April 20th, 2012

Question:
I read on your blog at Dismissal without prejudice of a credit card lawsuit that a dismissal with prejudice is better than without prejudice, because the claims cannot be filed again. How can I get the court to dismiss a credit card lawsuit with prejudice, if the court has already dismissed it when the Plaintiff’s lawyer failed to show up for a second hearing?

My response:
To obtain a dismissal with prejudice, the court must have enough information presented to it to decide the case on its merits.  That does not necessarily require both parties to appear and present evidence, but it would require that there be an active case. To make a decision on the merits of a case would require both sides to each have an opportunity to present their side. Whether one or both sides take that opportunity is a separate issue.

Once a case has been dismissed (such as for the plaintiff’s debt collection lawyer failing to appear multiple times), the court loses jurisdiction (power) to decide the case on its merits, because there is no longer an active civil case.  Unless the Plaintiff’s lawyer gets the dismissal reversed, such as by filing a motion to explain the failure to appear multiple times, and you prove to the court that you are entitled to a judgment of dismissal in the action, there is no way for the judge to decide the case, if it was already dismissed.

One other way to have a similar result as a dismissal with prejudice would be to enter into a settlement agreement with the Plaintiff, such that once you have paid the agreed settlement amount, the debtor is released from the lawsuit and underling debt.  The debtor should have something from the Plaintiff or their lawyer approving the settlement or confirming the specific terms, in case there is a dispute later, but a settlement and release would have almost the same result as making the Plaintiff or any subsequent assignee unable to file another case for the same debt.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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Protection of Homeowner Equity for Declared Homesteads from Debt Collection Judgments

Thursday, December 1st, 2011

Question:
I tried to represent myself against a professional debt collection law firm on a debt that I thought would be easy to defeat at trial, when I could tell my side of the story. A few days ago, the court allowed a summary judgment against me on the debt, plus interest and attorney’s fees.  There is no trial anymore, the case is over.  Is there anything that I can do to protect my home, which has about $50,000 in equity, based on current market values?

My response:
Sorry to hear about the court ruling against you and awarding a judgment for all the items sought in the complaint by the debt collection law firm.  Most debt collection cases are decided without trial.  See my prior blog on this at this blog link.

Protecting the equity in your home from a money judgment (other than for child or spousal support) is pretty easy.  A homestead declaration is available online for FREE at Los Angeles County Government’s web site.  Form Link Declaration Otherwise, you can get one at the local law library or many mailbox stores with legal forms.  Prepare the form and take it to a notary public who will notarize your signature on the form, then you must record the original with the county recorder or county clerk’s office. Record the declaration as soon as possible, preferably before the debt collection law firm records its judgment in your county of residence.

The homestead declaration will protect the equity in your home, up to the statutory amounts.  For example, a single individual may keep up to $75,000 in homeowner’s equity.  Low income families can protect even more equity.  The funds must be applied towards another home, with a homestead declaration, purchased within six months of the sale of the former home.

There are other advantages to having the homestead declaration recorded. For instance, if the creditor attempts to sell the property of the judgment debtor, when a homestead declaration has been recorded, the court must presume that the homestead exemption applies.

I have other blog postings and a legal guide on Avvo.com to help you deal with other aspects of a money judgment, such as wage garnishment. Wage Garnishment Legal Guide. Please do this immediately, as it may only be a few days before the debt collection lawfirm records the abstract of judgment in your county.

Robert Stempler
www.StopCollectionLawsuits.com

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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

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Complaining to BBB About Debt Collection Harassment

Saturday, June 18th, 2011

Question:
I don’t want to sue in court, but my family and I have been harassed by a debt collector and I don’t want to let them get away with it. Should I complain to the Better Business Bureau (BBB)?

Response:
No, I don’t see that as getting what you want, which is to not let them “get away with it.”  Debt collectors are looking to collect as much money as they can on the debts they are responsible to enforce.  They maximize recovery by filing lawsuits, reporting the accounts to the credit reporting agencies, and making calls.  They know that people pay more when they are afraid and not thinking clearly, than if the situation is calmly presented without any stress from imposing phone calls, fear of a lawsuit, or adverse credit reporting hanging over the debtor.

Logically, debt collectors have no concern over their ratings with people who are the subject of their collection calls.  There are several debt collectors who boast about such things, such as having web sites that emphasize how ruthless they are towards the debtors and how they can get money from them, almost no matter the circumstances.  The BBB rates people who are comparing services, but debtors have no choice as to who a company hires to perform collection and many collection companies collect their own debts, which they purchased from other companies.

Finally, the BBB’s ratings have become almost meaningless, in my opinion.  A report by ABC News in 2010 found that the BBB rating system had been rigged by highly-compensated BBB local managers to increase “membership” fees and membership numbers.  BBB dues-paying members received a superior score. Companies that failed to pay dues to the BBB fees were downgraded, often substantially.  ABC News’s investigation found business that members received top ratings simply for joining, while non-members (such as the well respected Ritz Carlton Hotel in Boston) received bottom ratings when they did not join.

In any event, at some point debt collection agencies who are not paid will likely file a debt collection lawsuit in court against the debtor, which will force the consumer to play defense against the debt.  If you are harassed by the collection agency, it may be smart to consider taking the first move, rather than sitting back and waiting. Also, the statute of limitations period could work against you by waiting, because you have one year to sue them for collection harassment, but they have several years (depending on the debt and when it went into default and was last paid) to file a debt collection lawsuit, so they have the luxury of time that you may not have. See my blog posting on default judgments, linked here: Default Blog Posting.

Also, sometimes these debt collectors file a lawsuit, but fail to deliver the papers to you, as required by Due Process. When that happens, the court may mistakenly enter a default judgment against you, because the process server falsely stated that they gave you the papers. Thus, if you don’t wait for a default judgment, perhaps you can prevent a debt collection lawsuit and default judgment by hiring counsel and taking on the debt collector for harassment.

Robert Stempler
www.StopCollectionHarassment.com

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Wrong Person Served: A Case of Mistaken Identity

Thursday, February 3rd, 2011

Question:
Someone handed me a summons and complaint for a credit card lawsuit with my name on it.  I did not have any credit card with this lender. What should I do?  How do I know if I am the victim of identity theft?  If this is someone else’s debt, can I ignore the lawsuit?  I don’t want to pay the court’s filing fees or hire an attorney, if possible.

My Response:
Credit card lawsuits are serious business and without a proper response filed in court, the debt collection attorney will request that a default judgment be entered against the defendants who are served but fail to respond.  If the summons and complaint are in your name, then the judgment will also be in your name.  Thus, the debt collection lawyer may apply the judgment as a lien on your real property, a levy on your bank and investment accounts, a garnishment against your wages, and other enforcement attempts.

The fact that this is not your debt is something that you can present to the court only if you or your debt collection defense attorney file a response in court before the deadline expires. See my blog posting on this deadline:   http://www.stopthecase.com/blog/?p=81 Otherwise, a default judgment may then be entered, which terminates the defendant’s right to oppose the judgment, without considerable extra paperwork and expense.  You may end up having your personal funds used to satisfy a default judgment for the full balance claimed in the credit card lawsuit.

It feels pretty bad paying someone else’s credit card debt.  Top off that feeling with having someone else’s bad debts also ruin your good credit by appearing as an derogatory public record on your credit report and jeopardize your employment, if the nature of your work requires that you have no bad debts.

Please see my blog posting on how to respond to a credit card lawsuit: http://www.stopthecase.com/blog/?p=121

If this turns out to be an identity theft account or you would like to see if that is the case, as opposed to mistaken identity with someone else having a similar name, please see my identity theft legal guide on Avvo.com.

Never ignore a credit card lawsuit without consulting experienced defense counsel.  If you are able to get the case dismissed, you may be able to recover your court costs and attorney’s fees.

Robert Stempler
www.StopCollectionLawsuits.com

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Wage Garnishment on a Default Judgment. Help!

Friday, December 24th, 2010

Question:
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 Avvo.com 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 Avvo.com on how to get civil court records online for free or almost free at:

http://www.avvo.com/legal-guides/ugc/getting-online-case-information-from-many-california-superior-and-small-claims-courts-1

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

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Today Show on Debt Collection Harassment Gave Bad Legal Advice

Thursday, October 21st, 2010

On October 19, 2010, NBC’s “Today Show” (TodayShow.com) aired an investigation on extreme debt collection calls and debt collection lawsuit abuses.  The threats and insults left by debt collectors on recorded voice messages was shocking, to say the least. The shocking calls should be heard by every American who is old enough to apply for a credit card or personal loan.  Please follow the link: http://today.msnbc.msn.com/id/3041440/vp/39737563#39737563

At the end of the report, the NBC senior investigative correspondent, Lisa Myers, offered her thoughts on how to deal with a debt collector.  Ms. Myers stated: (1) “If you get contacted by a debt collector, the worst thing you can do is ignore it.” (2) “If you do owe it [the debt], make some arrangements to start paying at least a little something.”

The first comment about not ignoring the call may or may not be a good tip, and Ms. Myers was short on specifics.  What if the debt collector has no regard for the collection laws?  Will responding to the debt collector really help or will it encourage more calls and more aggression?  Ms. Myers suggests that consumers contact the collector for documentation of the debt, but she does not suggest how to make such contact.

To call a debt collector may put the consumer on a fast track for the extreme insults and threats aired in the Today Show report.  Also, phone requests leave no paper trail.  The debt collector may violate the Fair Debt Collection Practices Act, if they ignore a timely written request for verification, but continue collection attempts.  Thus, verification requests should be by written letter, sent certified mail, within 30 days of receiving an initial letter from a debt collector.  A sample letter with more tips is at www.StopCollectionHarassment.com, letter number 1.1.

The second comment to arrange to pay “at least a little” on the debt could be a disaster, if the debt collection agency later files a credit card lawsuit against the consumer.  Under California law, these small payments may be used by the debt collector’s collection attorney to show that the lawsuit is timely, within the statute of limitations period.  Without these small payments, many debts become unenforceable in court.  Even small payments could extend the enforcement period for several extra years, under California law.

As to both comments, Ms. Myers would have been wise to suggest that consumers promptly consult with a consumer attorney experienced in debt collection harassment or debt collection lawsuits, for a credit card lawsuit or debt collection default judgment.  Ms. Myers also might have suggested that consumers file complaints about harassing debt collectors with the Federal Trade Commission, which tracks consumer complaints and reports to Congress, or complain to their state attorney general or department of consumer affairs.

The report remarked that “the deck is stacked heavily against consumers.” An experienced consumer attorney can help stop the collection calls and prevent a lawsuit from garnishing wages or freezing your bank account.

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Payday Lenders and their Debt Collectors Take Aim at Military Families

Sunday, October 10th, 2010

In September, 2010, the Attorney General of the State of New York announced that the investigation into the Buffalo, New York, debt collection industry has netted some pretty slimy catch: debt collectors aiming at our military families, who were unable to pay the incredibly high fees and interest rates on payday loans. The owner of one of the companies, Stephanie Lowinger, allegedly instructed his employees to threaten to contact and sometimes actually contact the commanding officers of the service members. See: http://www.consumeraffairs.com/news04/2010/09/debt-collectors-harassed-military-families.html.

Threatening to notify one’s employer or commanding officer in the case of a member of our military violates the Fair Debt Collection Practices Act, 15 U.S.C. Sec. 1692 et seq., which severely limits communications by debt collectors to third parties. My firm has prepared a number of complaints filed in Federal District Court for service members here in California, involving similar threats and calls by debt collectors.

Also, I have represented consumers who have experienced debt collectors calling and revealing personal information to neighbors, siblings, parents, employers, coworkers, and children.

If the calls are intentionally placed to third persons who are not liable on the debt, then the only sure way to terminate such illegal collection acts is with a lawyer filing a collection under the Fair Debt Collection Practices Act (FDCPA), which provides for actual damages and attorney’s fees. If it is not clear that these debt collectors intended to reveal personal information to a third person, the consumer should put the debt collector on notice of their correct address and phone number and request that all communications be directed to this correct address and phone number. Such requests are best done in writing by certified mail, with a copy of the letter and postal receipt kept at least one year, which is the statute of limitations for FDCPA claims. Please see the sample letters 1.1 and 1.2 at www.StopCollectionHarassment.com.

I have also had the honor of representing consumers who were sued on payday loans, in debt collection lawsuits. In my experience, the debt collection lawyers don’t sue for the full interest rates specified in the loan, they primarily want to get most of the principal paid back. Besides, the full interest rate would make most people blush, given how high they are and the people who agreed to them so vulnerable, financially.

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Pres. Bill Clinton Error on “Meet the Press” about Credit Reporting

Monday, September 27th, 2010

On September 19, 2010, Pres. Bill Clinton made several remarks about the current economic crises on NBC’s “Meet the Press.”  In particular, the President stated that “over two million of our fellow citizens are living in homes that are worth less than their mortgages, so if they move, their credit is ruined for life.”

Clip of this interview may be available at www.msnbc.com, last linked at: http://www.msnbc.msn.com/id/3032608/#39256267

Perhaps President Clinton was exaggerating the impact of a foreclosure or short sale on a person’s credit report to make his point, that more people need more freedom to move to places where their job skills are needed by employers.  The fact is, a foreclosure and other negative credit entries cannot be reported for the rest of your life, they must be removed after seven years.  (See 15 U.S.C. § 1681c(a).)

The relevant exemption in the Fair Credit Reporting Act (FCRA) to the seven-year limit is for credit transactions where the principal amount exceeds $150,000 and jobs applications where the annual salary is expected to be $75,000 or more. (See 15 U.S.C. § 1681c(b).)

The other exception to the seven-year rule may also apply to unpaid judgments, such as on debt collection lawsuits and credit card lawsuits that have resulted in a judgment that remains unpaid. Such a judgment could remain enforceable in California for up to 20 years, if timely renewed.  While there is no definitive interpretation of this point, a credit reporting agency might report a California unpaid judgment for up to 20 years, which is still not “forever.”

Under California law, our anti-deficiency statutes prevent a lender to obtain a deficiency judgment on many secured, real estate loans.  The facts need to be evaluated individually to ensure that the anti-deficiency statutes apply, but please review sections 580a thru 580d of the California Code of Civil Procedure, or contact me or a real estate attorney for an evaluation. With our anti-deficiency statutes, more people should properly evaluate their situation to learn if the are able to leave their homes that are upside-down to seek employment.

Robert Stempler

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