Posts Tagged ‘illegal threats’

Is the worst that can happen being thrown in jail for an unpaid medical debt?

Friday, July 5th, 2013

Question: I had to go to the community hospital, as I was really sick and thought I was going to die. I applied for county indigent assistance on my bill and thought that they would take care of it, as I was unemployed. Then I received debt collection calls demanding that I had to pay more than the original bill. I could not pay it, but now I have been sued and they want to also be paid interest and the court costs. What is the worst? Is jail time possible, if I cannot pay?

My Response:

The question of debtors prison and county jail should be the furthest thing from your mind on an unpaid personal debt. When the Constitution was written and ratified by the states, it allowed Congress to provide a safety valve of filing for bankruptcy, as a last resort to discharge most debts for those who qualify. (Article 1, Section 8, Clause 4.) In 1833, federal law eliminated prison for private debts and the states followed. Now, it would be amazing to find an instance where a person is jailed in any state, simply for not being able to pay their personal debts.

Nevertheless, fear of debtor’s prisons are stoked regularly by the news media, even CBS news uses provocative headlines to catch more readers. As recently as 2012, CBS ran a report with the headline: “Jailed for $280: The return of debtors’ prisons.” In fact, the report had nothing to do with the headline. Someone reading the headline would probably believe that not paying a $280 bill or credit card may result in a jail sentence.

Upon reading the entire 2012 CBS News Report, however, it is clear that there is no return of debtors prisons in the USA. The people who were threatened with or spent time in jail were there because they failed to appear in court when ordered, for criminal acts, or they failed to pay court-imposed fines associated with criminal convictions. The other issue in the CBS report was that several states allowed collection charges to be added on top of already expensive court fines.

A judgment is not inevitable if a debt collection lawsuit is filed against an individual, particularly if defended by an experienced debt collection defense attorney, who will handle the case to get it resolved before trial, either by settlement or dismissal. Moreover, even if a money judgment is entered by the court against a person, there are numerous ways to get that judgment resolved and NO chance of jail time, provided that, when so order, the debtor appears in court, answers questions truthfully, and does not commit any criminal acts that are punishable with jail time.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler
Facebook: www.facebook.com/SoCalConsumerLawyer

Should I file bankruptcy to stop end my student loans and daily debt collection calls?

Wednesday, May 8th, 2013

Question: I am unemployed, owe a fortune in student loans, and $2000 in credit cards with two debt collection agencies. I live rent free with my family. There is no way that I can pay $100 per month to settle one of the debts, which is what they want from me to stop calling. Other debt collectors also call me every day. I don’t have the $2000 that a Bankruptcy attorney quoted me.

My response:
Bankruptcy court will approve the discharge of student loans only if you satisfy the “undue hardship” standard, which requires a special procedure to be filed in Bankruptcy Court. That can be expensive and there is no assurance of a favorable outcome. For a large amount of student loans, however, it may be worthwhile if you hire an experienced Bankruptcy Attorney, who evaluates your case and determines that you will likely prevail at such a hearing.

Many federally guaranteed student loans can be discharged in other ways that may have a more favorable standard depending on the circumstances and type of loans. For instance, if you are disabled and the loans are either FFELs, direct, or Perkins loans, you may be qualify for a disability discharge, which merely requires you to file the form, signed by a physician, that you qualify for total and permanent disability, including the medical diagnosis and why this prevents the borrower from working. There is no cost for this application. More information is available online from Student Loan Borrower Assistance and the U.S. Department of Education. There are other statutory loan discharges, such as for a closed school or if the school falsified eligibility. If a statutory discharge is sought and fails, perhaps bankruptcy can be a backup plan.

I have seen debt collection lawsuits filed against my clients for with under $1,000 in principal balance due. I would not assume that this debt collection agency will not sue to enforce either or both of these debts. However, why would they sue you if you are not working and have no assets or income? To file a debt collection lawsuit in California, the debt collection agency must hire a licensed California debt collection attorney, then pay the court’s filing fee and pay to have a process server deliver the documents to each defendant. These costs and fees can be added to the total debt, but if a collection lawsuit pushes the debtor to file bankruptcy or if the debtor is long-term unable to pay, then the debt collection agency has made a poor business decision to invest money on a debt that will not be recovered.

If the debt collection agency waits too long to file a collection lawsuit, then the debt becomes time-barred by the statute of limitations. From that point on, the debt collection agency cannot file a debt collection lawsuit, without risking having the case dismissed as untimely and risking being sued for violating the Fair Debt Collection Practices Act (FDCPA).  The debt collector may not even threaten to file a lawsuit on a time-barred debt, without violating the FDCPA.  Thus, please read my prior blog posting on the “Don’t Pay A Dime Strategy” as an alternative to bankruptcy.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Facebook: www.facebook.com/SoCalConsumerLawyer

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

Saturday, February 2nd, 2013

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

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

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

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

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

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

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

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

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

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Facebook: www.facebook.com/SoCalConsumerLawyer

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.

Dave Ramsey Outs Credit Card Collectors for Over-the-Top Tactics

Sunday, September 26th, 2010

For all consumers who have been victimized by debt collectors and the rest of America who has only heard the stories and were not sure if the victims were exaggerating, you need to watch the Dave Ramsey video on www.YouTube.com at this link:

Mr. Ramsey responds to a letter by the president of a debt collector known as Global Acceptance Credit, located in Arlington, Texas.  In the video, Mr. Ramsey hold no punches as he read and then immediately critiques each line in Global Acceptance’s letter. Mr. Ramsey does this in contest of his 20 year history dealing with debt collectors and numerous victims, some of which are described during the video. The video concludes when Mr. Ramsey states, “credit card collectors are scum.”

Mr. Ramsey also refers to the Fair Debt Collection Practices Act as being violated daily and seriously by debt collectors and asserts that the threat to garnish someone’s wages before a debt collection lawsuit has been filed violates the Act.  I agree that such representation might violate the Act, but not always.

Robert Stempler