Posts Tagged ‘“Mann Bracken” “Collection Law Firm” “Debt Collector” “Collection Lawsuit”’

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
Twitter @RStempler


Virtual Law Firm Prepared Legal Papers for Debtor Pro Per, Money Judgment Now Imminent

Thursday, November 1st, 2012

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
Twitter @RStempler

How much should I offer to settle a debt collection lawsuit?

Friday, August 10th, 2012

Question: I’ve never been sued before, this is all new. I read your Settlement Guide #1 on, which explained many of my questions. I’m sure that I will read your other two Settlement Guides, once I know how much to offer to settle. Should I offer 10% of the amount stated in the lawsuit?  Bankruptcy is something I want to avoid.  I have a home with some equity in it, but not much. The lawsuit is not by the bank, but filed by a debt collection agency, so shouldn’t they be willing to settle for much less?

My response:
How much to offer is probably the top question on everyone’s mind.  First, understand the debt collection agent’s perspective.  The goal of the collection attorney and their agents is to maximize the recovery from each case and turn a profit for a particular portfolio of debts.

Time is money, so the sooner the funds are received, the less costly a settlement proposal can be.  If you can pay the settlement funds soon (such as within 30 to 90 days), that will usually make the settlement a lower dollar amount.  Settlements can often be approved with payments for 12 to 36 months, sometimes longer. Some companies will agree to waive interest, so long as the payments are received timely and don’t bounce.  Some debt collection agencies insist on full payment of the principal amount, if the settlement payments are made over a year or more.

Then, there are those debt collection agencies who like to squeeze everyone, because they believe they have the upper hand over unrepresented consumers.  They squeeze the debtor consumer into paying every cent, even obnoxious rates of interest and attorney’s fees.  Why bother settling if there is almost no difference between what would be the result if you go to trial and lose and making settlement payments of the full amount plus interest, etc?

The risk of heavy-handed debt collection practices is that when push comes to shove, people will learn their options (see the first video on my website’s home page).  Once they know their options, if the debtor cannot get a reasonable, affordable settlement, they may reject settlement and see if the judgment will be enforced, file bankruptcy, or hire an attorney to defend them in the collection lawsuit and likely negotiate fairer settlement terms.

Ten percent up to half of the amount in the lawsuit might be accepted by the collection company, if the debtor can show at least one good reason why the company risks get nothing and wasting its time and money in the case, if they don’t settle.  For instance, perhaps the lawsuit was filed too late, well past the statute of limitations, which should result in immediate dismissal if proven.  Perhaps the debtor has many debts and their income is such that they qualify for a Chapter 7 Bankruptcy, in which case if the debtor is faced with an unreasonable settlement posture, the bankruptcy option may be explored and the debt collection agency may get nothing.

Even if the debt collection agency purchased the debt for less than ten percent of the amount of the unpaid principal, unless the lawsuit was not filed timely or the debtor is a good candidate for bankruptcy, I would not expect the company to accept 10%. That is because they speak with debtors every day who are unable to pay.  In their view, they must turn enough accounts into a profit over the purchase price, or they will no longer have enough income to pay employees and other business expenses.

There really is no magic number to offer or that all debt collection agencies will find acceptable, each case can be negotiated, if a difficult situation is properly and accurately presented.

Robert Stempler
Twitter @RStempler

I was not properly served, so can I file something to dismiss the case?

Tuesday, June 5th, 2012

Question: I did not pay one of my credit cards, because it was too much for me.  Now, I received in the mail a summons and complaint for that credit card debt.  No one in my home knows anything about this, so I don’t believe that this is proper substitute service. Can I file something in Superior Court about not being served? Can I get the case dismissed or put off a long time?

My response:
Whenever the defendant located within California has not been properly served with the lawsuit, in addition to their six options that I explained in the first video on my home page, the person could file a motion to quash.  There is no check-the-box form for this motion in California Superior Court.  Motions to quash are unusual.  People should either file a response to the debt collection lawsuit or exercise one of their other options, such as settling the case.

If the defendant or his/her attorney files a motion to quash and properly presents the Superior Court with the lack of valid service, the result is often the same: the court can grant the motion to quash and some time later, the lawsuit is served properly on the defendant, who then has the given number of days to file a response in the case.  The Judge could also ask the attorney or defendant in court at the hearing: “When do you want to file a response to this lawsuit?”  In other words, you’ve won the battle, but lost the war, since a response to the complaint must still be filed and the case will proceed about the same, as if service has now been properly effected.

The motion to quash is really only an effective means of stopping a lawsuit if the case was filed against an out of state defendant, who has no contacts in California, which would mean the California Superior Court lacks jurisdiction for such lawsuit. Then the motion to quash would have a substantial effect on the outcome of the case.  For this reason, a motion to quash should be reserved for cases where the defendant is out of state, with no connections to California.

Thus, when people post on or ask elsewhere about not being properly served, I typically refer them to my blog posting on making their next steps count.  Defendants should respect the normal time to respond in court to the lawsuit as about the same, if they wish to avoid a default judgment and preserve all of their six options, noted in my first video.

Robert Stempler
Twitter @RStempler

A Judgment in a Debt Collection Lawsuit is Not Inevitable

Sunday, July 3rd, 2011

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

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

Deadline to File A Claim Against Mann Bracken is June 25, 2010

Thursday, June 24th, 2010

If you have a claim against debt collection law firm, Mann Bracken, LLP, the deadline to file is Friday, June 25, 2010.  I cannot give you legal advice on Maryland law, but you are supposed to send a copy of this claim to the receiver’s attorney, James M. Hoffman of Offit Kurman, P.A., in Bethesda, Maryland.  You should ensure timely delivery before close of business, at the Circuit Court for Montgomery County. 50 Maryland Avenue; Rockville, MD 20850 and reference the case as: Mann Bracken, LLP v. Connell A. Loftus, Esq.; Case No. V327646.

I am aware that many of the claims submitted were by companies that provided services, such as process serving, to this massive debt collection law firm, which had close ties with Axiant, which previously filed for bankruptcy.  I was advised that since all Mann Bracken’s law offices have been closed and their staff let go, it is unlikely Mann Bracken will ever be back in business or be able to pay all the claims submitted.

If you are sued or harassed by a debt collector, you have substantial rights that you should protect and not delay, so that a default judgment is not entered against you.  Please review your options at and contact me if you have any questions or need representation against a debt collector or creditor.