Posts Tagged ‘summons and complaint’

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Can a Judgment Lien Stop the Escrow of My House?

Monday, March 11th, 2013

Question: I sold my home and it is now in escrow with the buyers. I just learned from the escrow company that an old judgment that I discovered on my credit report years ago must be paid in full with interest, because of a lien that they filed against my house. Is this true and is it legal?

My response:
When a plaintiff wins a judgment for money, such as an unpaid credit card debt, against the defendant, if the judgment is not fully satisfied very soon after entry of judgment, then the judgment creditor’s attorney usually obtains an “Abstract of Judgment,” which is California Judicial Council Enforcement Form # EJ-001 (“Abstract”).

When the Abstract is recorded with the County Recorder or County Clerk’s office, a lien exists over all real property in that county, including a residence. From that point forward (excluding bankruptcy discharge, in many instances), until the judgment is satisfied in full or the judgment creditor records a release of lien, any sale of real property or attempt to refinance property in the name of the judgment debtor(s) becomes an opportunity for the judgment creditor to be paid.

I know of no title company that would insure the title to a property (which is required by the bank for financing a purchase or refinancing), unless all Abstracts that name any of sellers involved are satisfied in full or a release of lien recorded. Buyers also may be unable to obtain real property financing, if they have an outstanding recorded Abstract. Escrow companies facilitate this payoff process by contacting the judgment creditor’s collection attorney for a written payoff demand. When the collection attorney receives this request, they are supposed to compute how much is due and send a letter of the correct amount, including costs and accrued interest. The escrow company then will deduct the appropriate amount and pay this to the creditor’s attorney, who must provide the documentation that can be recorded to show the judgment has been fully satisfied and the Abstract released.

There are some exceptions to this rule, such as the homestead exemption amount ($75,000 or more, depending on the situation of the occupants and owners, such as age or disability). The homestead exemption protects equity when applied towards purchase of another home within six months. See Cal. Code of Civil Procedure, Section 704.720. My blog posting explains the homestead declaration and links to a sample homestead form.

One point about this process is that there is often abuse by the judgment creditor’s attorney.  In particular, there is the temptation to inflate the amount, such as by improperly adding attorney’s fees, demanding excessive fees and costs, and other such nonsense. This might be considered a violation of the Fair Debt Collection Practices Act (FDCPA). Obviously, the damages would be the inflated amount, as this is an attempt to collect more than the amount allowed by law. However, inflating the amount could also make it impossible for the Abstract to be satisfied in full, if the amount is so high that the transaction cannot be closed and the judgment creditor is not willing to sign a release of lien. Thus, damages could also be claimed for preventing the sale or refinancing from being completed.

While you might not have time to consider trying to vacate and set aside an old default judgment, especially if you are in the middle of escrow and need to complete that promptly, please read my blog postings about setting aside a default judgement. If the summons and complaint were not properly served on the defendants, the court lacked jurisdiction over the defendant(s), and even an old default judgment can be set aside by a special type of complaint in equity. Here’s one blog posting in particular, that concerns an old default judgment.

Robert Stempler
www.StopCollectionLawsuits.com
Twitter @RStempler

Facebook: www.facebook.com/SoCalConsumerLawyer

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Posted in default judgments, FAQs Collection Lawsuits, Harassment by Collectors | No Comments »

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

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Posted in DIY Lawsuit Defense, FAQs Collection Lawsuits, Repossession, Stop Collection Lawsuits | No Comments »

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

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Posted in DIY Lawsuit Defense, FAQs Collection Lawsuits, Service, Stop Collection Lawsuits | No Comments »

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

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Posted in FAQs Collection Lawsuits, Harassment by Collectors, Identity Theft Protection, Stop Collection Lawsuits | No Comments »

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

Thursday, November 1st, 2012

Question:
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
www.StopCollectionLawsuits.com
Twitter @RStempler

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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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Posted in FAQs Collection Lawsuits, Options to Bankruptcy, Service, Stop Collection Lawsuits | No Comments »

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

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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

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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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