Posts Tagged ‘money judgment’

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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

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Asset Acceptance Did Not Serve Its Debt Collection Lawsuit, Monitoring Online

Friday, October 12th, 2012

Question: Per your fabulous on-line instructions – I looked on-line to find out about a lawsuit against me.  I noticed that Asset Acceptance, LLC filed a collection lawsuit against me to collect a older debt.  Unfortunately, they have not served me. What do you suggest I do? This is in California Superior Court and there is a hearing set in a couple of months. I was thinking of going to the hearing to see what they say.

My response:
First, it is not “unfortunate” that you were not served.  It is actually good news, as your time to respond to a lawsuit does not begin, until you (the defendant) have been served.  See link to my blog on deadlines to respond to a collection lawsuit. Thus, there is due date for you, until you have been served.

Second, I would not do anything. Fly below the radar and wait to see if you are ever served. It that occurs, marke that date on your calendar, so that you know exactly when your response will be due in court.  Until then, let’s just see what progresses and I certainly would not advise you to just show up in court, when you have not filed a formal response in the case.

Third, to be safe, every couple of weeks, I would visit the Court’s web site for this collection case for any activity, such as the filing of a proof of service. If that occurs, then you need to take action, even if no one has really come to serve you, because that is a formal representation to the court (though false) stating that the process server had served the summons and complaint.  Stay on top of this, because many times the process server states under oath that the defendant was served, when that never took place.  A default judgment may be entered after that, unless you take proper action.

Update:
Congratulations.  I checked online with the Superior Court’s web site. A recent entry shows that Asset Acceptance has dismissed its case against you without prejudice. They never served you, but for whatever reason, they dismissed their collection case.  It is unlikely that they will refile the case, now that they have decided to dismiss.  Thus, in my opinion you have dodged a bullet.

Once again, this proves that staying below radar, such as with my “Don’t Pay a Dime Strategy,” sometimes works and can save thousands of dollars and avoid bankruptcy. Had you been served, you would have contacted me, no doubt. I really appreciate your kind words.

Robert Stempler
www.StopCollectionLawsuits.com

Twitter @RStempler

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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

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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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Struggling with Wage Garnishment for A Default Judgment on a Credit Card Debt

Sunday, April 15th, 2012

Question
For two years, my husband’s wages have been garnished at $100 per paycheck, which is what a judge ordered. His paycheck is  twice a month and his take home pay is under $2,000.  We don’t know what we can do, but now we got notice from our bank that they are also levying out bank account. If our bank account is taken after his check is deposited, we cannot pay our rent on the first, and we have two children. With interest, the judgment is just under $10,000 at this time.

My response:
This is a horrible situation for you that you have been held under this suffocating wage garnishment for two years, when you clearly cannot afford it.  I don’t know why a judge would have you pay that much, given your family needs and that you are already living on the edge, financially.

Looking back, perhaps this credit card default judgment could have been set aside, if you were not served. However, now that more than two years have elapsed, it is very doubtful that a judge will set it aside, because the courts expect a defendant to promptly file the papers to set aside an invalid default judgment reasonably soon after learning about it. You and your husband have known about this for two years, so I don’t see trying to set it aside a a productive pursuit for you, at this late date.

Looking forward, I think you need to immediately file a claim of exemption with the financial statement Judicial Council Forms. Hopefully, you are able to show the judge that this money has already been garnished and you have nothing else available and you need it for your necessities (rent, food, utilities, medical) and children’s expenses.

Looking further down the road, you should file bankruptcy to discharge this and any other debt. At $200 per month, you are barely paying $100 per month in principal, after the Sheriff’s fee for the wage garnishment.  Thus, you will not have this paid off for another 8 years. It makes no sense to suffer for eight more years and to have the debt collection law firm cause you to appear in court to fight off a bank levy, which also costs you bank charges.  After the bankruptcy, you can put that extra $200 per month to use helping your family, perhaps starting to save for emergencies, education, and other future events.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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Mandatory Settlement Conferences for Debt Collection Lawsuits in Riverside

Monday, April 2nd, 2012

Riverside County Superior Court now has a special settlement program for debt collection lawsuits, under $25,000. The program is activated by the court, once the court receives the defendant’s answer. At that point, the court sets a date for the Mandatory Settlement Conference (MSC). Here’s a link to the MSC program information.

Bonus: unrepresented consumers (pro per) are invited to attend a free workshop to prepare for the MSC. No need to RSVP for the workshop, but they suggest attending at least a week before, so that you know what materials they suggest you bring on the day of the MSC.

Before you file anything in court, I suggest you review the short videos on my home page, because knowing your options is crucial, before you “just do something,” because it sounds good.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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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

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Credit Card Lawsuit: A Money Judgment Is Not Inevitable

Thursday, March 15th, 2012

Question:
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
www.StopCollectionLawsuits.com
Twitter @RStempler

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Exemptions for Retirement Pension and Social Security Benefits

Thursday, March 8th, 2012

Question:
A bank got a money judgment on me for an old credit card debt in a debt collection lawsuit. I receive retirement from my state job and Social Security benefits. Can they garnish either of these?

My response:

Except for child, family, or spousal support, public retirement benefits are exempt from garnishment, per Cal. Code of Civil Procedure, Section 704.110. Similarly, private retirement benefits are exempt from garnishment, per Cal. Code of Civil Procedure, Section 704.115.

Be sure you notify the bank, credit union, or other institution in which such funds are electronically deposited that these funds are exempt from levy.  Verify that they understand the funds are exempt and should not be released if levied.  Otherwise, find another financial institution which will reject attempts to levy exempt public retirement funds and Social Security Benefits, per Cal. Code of Civil Procedure, Section 704.080.

Do not put other funds in the account with exempt funds, or those funds may be levied and the funds applied to satisfy a bank levy.  If the account balance is below $1225 for a single account, then the bank should automatically consider them exempt, under Section 704.080, subdivision (b)(1), for direct deposits. There are other amounts that are automatically exempt, so please see that statute to see if your situation applies.  Otherwise, keep no more than the exempt amount in the account, if an outstanding money judgment is lurking against you.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

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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

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