Posts Tagged ‘defend yourself in court’

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

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

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

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

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

Three Common Mistakes to Avoid when Negotiating a Settlement of a Collection Lawsuit

Friday, August 17th, 2012

Consumers routinely try to settle a debt collection lawsuit, which is something that I believe should be explored, before deciding which option is best (see the first video on my web site’s home page, “Understanding Your Options”)).  Below are the three most common mistakes that consumers make in the settlement process.  There are plenty of others, but from the horror stories that I have reviewed after the fact, these are the most common regarding settlement.   Often, these pitfall prevent a settlement and risk a money judgment for the full balance and other charges by the debt collection law firm, which then shows up on consumer credit reports.

Mistake 1.  Whatever settlement you negotiate and accept, be sure that you can comply with the payment terms, or you may probably end up with a judgment for the full amount (less credit for payments), if you miss a payment or are late.  I often caution people to look carefully at their finances before entering into a settlement discussion.  I also warn against very long term payments, even if the seem affordable. This is not a car that you can at least drive around for several years.  If anything happens financially, such as unemployment or illness in the family, and you are unable to make the monthly payments, the collection attorney can enter a judgment on the full unpaid balance, which is almost back to square one for this lawsuit, but now there will be a money judgment on your credit reports.

Mistake 2.  Be aware of the little things that can add up to an enormous settlement, if agreeing to make payments over time.  In particular, the rate of interest on the unpaid balance.  The current legal rate in California on a money judgment is 10%, which is what money judgments earn, even if the debt was originally at a higher rate.  Not only that, but many creditors and debt collectors will not charge any interest (0%) on a long-term payment settlement agreement, provided that the agreed payments are timely received and don’t bounce.  Consider the rate of interest and try to get interest waived (0%), before agreeing to make long-term payments, as an interest rate  adds many payments to the settlement.

Mistake 3. A few people believe that they can negotiate a lower settlement of a debt collection lawsuit by misstating their income or other financial information, or not providing it at all.  Debtors must be accurate and avoid misleading statements when negotiating. Debt collection agencies and their lawyers often have a copy of the debtor’s credit report and other available information to help root out inaccurate statements.  For instance, if the debtor claims to be swimming under a load of debt, but their credit report shows only two low balance credit cards, then that will be viewed as a bad faith settlement tactic, and probably be rejected.  Another example is to claim that the house has no equity, which is easy to verify using free online databases of housing values.

Please also be aware that credit reports contain inaccurate information or are missing key data, which the debtor may need to clarify or explain, if aware of that.  For instance, some credit reports show the debtor at a different address in a good area, but if you have moved or it is only a private mail box, perhaps the debtor should clarify, so they understand your circumstances are more dire than once assumed.  Some credit reports also show employment information, which can also make a big difference in negotiating a settlement.

Hiring an attorney to negotiate and defend against a debt collection can make a difference, but I try to encourage consumers to try this for themselves, to see if they can save the legal fees and courts costs.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

No One Appeared for Trial for the Credit Card Bank Suing Me in a Debt Collection Lawsuit

Saturday, May 26th, 2012

Question:
I was at the Superior Court yesterday for the trial.  No one from a large credit card company showed, not even their lawyer, so the judge dismissed the case.  I quickly asked if it could be with prejudice. The judge said no, because there was no trial presentation.  Is there anything that I can do to protect myself from being sued again?

My Response:
The judge is correct. Without the trail starting and the lawyer for the plaintiff credit card bank attempting to present their evidence, the judge is unable to enter dismissal with prejudice.  Please see my blog posting on dismissal with prejudice of a credit card lawsuit.

You should be satisfied that the case was dismissed, because if the debt collection attorney had appeared at the trial with evidence of the credit card account with your name and address, many judges would enter a money judgment for the full amount presented, plus interest, court costs, and attorney’s fees.  Sometimes, the judge decides to not dismiss at trial and asks the clerk to send a written notice to the plaintiff’s attorney, giving them yet another chance to appear and present their case for trial. The result of dismissal is obviously more favorable to you, the defendant, as you need not appear again to see if they will appear.

You are permitted to file a memorandum of costs, to secure the amount that you paid for the filing fee to the clerk of the court. You should file the memorandum of costs with the court within 15 days of being notified that the case has been dismissed.

Because this debt collection lawsuit was dismissed without prejudice, it is possible that another collection lawsuit may be filed on this debt, either by the same company or by another entity, known as a debt buyer. If no other entity files a lawsuit against you on the same debt or if they fail to file within the statute of limitations period, then the debt will be considered discharged by law, once the period of time to file has expired. Please read my blog, explaining the statute of limitations period and what happens if the debt becomes time-barred.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

 

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

Default Money Judgment Entered Over Two Years Ago

Sunday, March 18th, 2012

Question:
I just learned from reviewing my credit report that a default money judgment was entered against me in California Superior Court on an old credit card debt. I was never served. I checked online with the court for this case file. The judgment was granted over two years ago.  Is it too late for me to do anything to reverse this default judgment or is my only option to try to settle this judgment, with it remaining on my credit for several more years?

My response:
It becomes increasingly difficult to set aside a default judgment as months and years pass. The longer a default judgment remains on file without a proper motion to set aside being filed in the case, the more judges express reluctance to grant a motion to set aside, even when filed soon after the defendant learns of it.

Two years is one of the key milestones, because California Code of Civil Procedure, Section 473.5 provides a two-year window to set aside a default judgment that was not served on the defendant and the defendant did not have time to file a response in court before the default was entered.  In this case, the two years have expired, so this particular statute does not apply. Thus, it may not be used as grounds for a motion to set aside, after the two years have expired.

Though Section 473.5 is not available to you, it is still possible to set aside the default judgment, using the Common Law rules of Equity, which are preserved by the Constitution. This can be done either by a motion in the case or a new case being filed to challenge the default judgment. It is often preferable to file a motion, rather than file a new case, but if the motion fails, there are court cases that state the new case can be filed to set aside the default.

Many judges are aware of the separate complaint to set aside an old default judgment, and not as many are aware that a motion to set aside can be filed after two years, because there is no court of appeal case which states this cannot be done, using the Common Law rules of Equity. Thus, some judges mistakenly deny the motion, when they see it was filed more than two years after the default judgment date.

There are no easy forms to set aside a default judgment. Thus, trying to settle and have a satisfaction of judgment filed is always available. If you do not work in a job or industry that has special rules against having a money judgment against you, it may be simpler to try and settle without the extra paperwork and risk of trying to set aside the default judgment. The downside to this approach is that the plaintiff debt collection attorneys and their clients often will demand more to settle, if they have an outstanding judgment hanging over the defendant.

Once the case is settled and a satisfaction of judgment filed with the court, you can ask to have your credit report updated to show the satisfaction of judgment. Also, the account should now show a zero balance due, if you have settled the debt and make the payments required.
Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Sued on a Credit Card Debt and Worried About Credit Score

Sunday, March 4th, 2012

Question: I have been served with a credit card lawsuit on an unpaid credit card that I could not afford to keep paying the minimum every month. I am especially worried that this will lower my credit score.

My response:

If you manage to successfully resolve this lawsuit without having a money judgment entered against you, then the filing of a lawsuit should not reduce your credit scores at all.  However, I have gotten many calls over the years from people who tried defending a debt collection lawsuit by themselves, using ideas from a law book, an inexperienced attorney, or comments read online.  Some people convince themselves that in few hours of research, they can learn the secrets to be able outmaneuver an experienced debt collection lawyer.  Some web sites tout that mailing a couple of well-worded documents to the attorney and voila!, the judge will order the case dismissed. Not so. Not even close.

Were it that easy, why would debt collection agencies and national banks bother with hiring a lawyer and paying hundreds of dollars to a court for filing the case , then pay a process server to personally deliver the lawsuit?  Indeed, why would anyone file bankruptcy, if they could easily win a debt collection lawsuit with inexpensive “legal” forms, available online?

One more word of caution: don’t delay in dealing with this case, as that is a sure way that a judgment will be entered, which will show up on your credit report and harm your scores. See my prior blog posting on the four most common ways that a judgment can be obtained.

The most effective way to prevent harm to your credit score is with knowledgeable debt collection defense and understanding what is feasible, to prevent a money judgment from being entered against you. As Shakespeare wrote long ago, “First thing’s first.”  Resolving the credit card lawsuit without a judgment is how to prevent further reductions in personal credit scores.
Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler