Settle credit card debt » Debt Buyers

Civil Summons For Credit Card Debt? Don’t Make These Mistakes!

admin — Tue, 13 Jul 2010 00:30:23 +0000

Observations on the Most Common MISTAKES Consumers Make When Faced with a Credit Card Debt Lawsuit

1. Consumers ignore notices for Court.

Never, ever ignore a notice from the court. If you suspect it’s a fake (some FDCPA Violators a.k.a. “junk debt buyers” have been caught sending out fake documents that resemble a summons) please call your local courthouse and ask them for verification. A court clerk generally answers the phone and can search by case number or by your name.

The creditor is counting on you either not receiving the notice or not responding to it thus granting them a a default judgment. A default judgment means they WIN and can now garnish your wages and freeze your assets. You may not even receive of the judgment until a wage garnishment attachment is in place.

2. Consumers fail to respond to summons.

Many consumers feel guilty about their debt(s) and fail to respond to the summons within the time-frame indicated. Even if your debt is valid, within SOL and you want to settle, YOU STILL NEED TO RESPOND TO THE SUMMONS WITH AN ANSWER within the time-frame granted (from the date of service) which is usually 20 to 30 days.

I’ve seen too many cases where the consumer works out a deal directly with the debt collector (Plaintiff) and never responds to the court placing that responsibility on the Plaintiff. Guess what? Plaintiff never withdraws their suit and now they have a default judgment in addition to whatever monies they’ve already collected from the debtor.

3. The following practice by debt collectors seem to be an increasingly common (and sleazy) occurrence. The debt collector may sue a consumer is Court. Instead of using the Sheriff to serve the summons, the collector likely will opt to use a special process server. (This is what happened to me!)

The consumer never receives the summons because of improper service (summons was left in an obscure location on the property, with a neighbor, etc.) thus the consumer never answers the complaint, and the debt collectors win a default judgment. BUT, the debt collector sits on the judgment and waits two to three years before executing on it…usually by a surprise wage attachment. The first the consumer ever knows of the suit or judgment is when their wages are garnished. The consumer will have a hard time trying to get the Court to vacate the judgment after two or three years. And the wage garnishment will stand.

This is another excellent reason to sign up for credit monitoring so you will know immediately if something like this has happened. Additionally, many district courts have websites where you can search for your name, not a bad idea to do on a monthly basis if you suspect a collector will be filing a suit against you.

4. When served with a summons (if you are even served), immediately contact an attorney. If you can’t afford an attorney, you can file Pro Se, which means you represent yourself. But by all means, file the answer within the 20 to 30 days indicated! You may qualify for legal aid AND there are resources out there to help you draft your documents, check my links for referrals.

I recommend sending a Notice Of Appearance (this instructs the Court that you are an active participant in the lawsuit and that you should be informed of all communication at a designated address.)

You need to file the Answer to Complaint, Affirmative Defenses document which answers their numbered allegations with an Affirm, Deny, or Lack the Knowledge to Answer type of statment. On the same document you then go on to assert common defenses to credit card debt lawsuits such as out-of-statute, statute of frauds, etc.

You also need to send a Certificate of Service that proves you mailed your Answer documents to the Plaintiff as well as filed them with the court. AND, I highly recommend you send a Cease & Desist Letter to the Plaintiff (read my post about How To Intimidate Debt Collectors for a great tip to use w/ this letter!) that instructs them to only contact you via written correspondence and bars them from contacting your employer, friends, relatives and neighbors.

You should also consider initiating “Discovery” by serving them with a Request for Production of Documents. Basically, you want to put them on notice that you are aware of your rights, are not going to roll over and accept a default and MAKE THEM PROVE THEIR CASE!

It’s well known that third-party debt collectors often only have an affidavit of debt to go off of. If you don’t request any documentation that is enough for them to win or obtain a judgment. However, if you request documentation they must furnish it at a hearing. If they can’t, you win!

For more information about how to fight a credit card debt lawsuit or to purchase my Word & PDF Fill-in-the-Blank templates for Notice of Appearance, Answer, Discovery, and more please visit ihavebeenserved.info.

You have nothing to lose by fighting these predatory debt collectors and everything to gain!

By: Jay M Johnson

Settle Unsecured Debt ASAP

admin — Sun, 14 Feb 2010 06:57:11 +0000

It is true creditors can claim much of the unsettled debt as a loss and still not take a big hurting, but in these times of recession every penny they collect from their debtors is better than none at all. Usually a creditor will charge off an account about 180 days delinquency, this means the account will be forwarded to a collection agency or sold to a junk debt buyer. Once this happens settlement percentages will change, some for the best some for the worst.

Collection agencies and junk debt buyers are now more and more buying old debt from creditors. In the past they would serve as a third party collecting on the creditors behalf and earn a percentage on the money collected from the debtor, some collection agencies and creditors still handle business in such a fashion. Others now buy the debt directly from the creditors for pennies on the dollar and claim they cannot settle the debt for less than 80 or 70%, thus making a tremendous profit for their efforts. Some of the junk debt buyers, who also buy old debt for pennies on the dollar and hire debt collection lawyers for their collection process. There are ways to get better deals from these companies, but one must know what to do to achieve them.

Some accounts depending on the creditor believe it or not are better off going to collection agencies for better settlements. There are a handful of creditors that under no circumstances will negotiate a reduction on debt owed. In this case a negotiations professional can inform you as to which accounts to negotiate with the original creditor and which ones to negotiate with a collections agency.

The debt settlement industry is forever changing, dictated by the decisions taken in the credit card company board rooms everyday. Debt negotiators are aware of these changes as their job is to speak to these very companies everyday. No debt settlement service can exactly estimate how much money anyone can save by negotiating on their debt for the same exact reasons I just mentioned, the best way to know this is to engage in negotiations. Once a negotiation is underway your debt settlement negotiator will have a better idea of the probable savings .

One fact is true the more active a person is in pursuing agreements with their creditors or collectors the sooner all the debt will be settled. Hiding for the most part will do no good as interest rates, penalties and late fees will continue to accumulate. All creditors, collection agencies and junk debt buyers will factor in this added charges when collecting on the unpaid accounts.

Therefore it is extremely important to remain proactive in the pursuit of arrangements to eliminate all debt. One of the most important decisions is to find the professional help which will help you do it as fast and as efficiently as possible.

By: Dan Delgado

What Happens When You Are Sued Over Old Credit Card Debt?

admin — Sat, 16 Jan 2010 19:49:35 +0000

Have you received a summons for breach of contract on an old credit card debt? Or, do you have collectors calling you daily and threatening to bring legal action? For many “junk debt collectors” bringing about lawsuits over old credit card debt (that has likely been charged off, leading you to believe that you are “untouchable”) has become big business.

If you are like the majority of American’s out there who are being hounded by creditors you likely ignore their calls and letters thinking they will eventually go away. Wrong. The new breed of junk debt buyers will SERVE YOU WITH A COMPLAINT SUMMONS!

What’s a junk debt buyer?

There are many, many of these companies and they all go by different names and aliases. Companies can buy charged off debt from your original lender for pennies on the dollar. It’s not uncommon for these debts to be bought & sold over, and over, and over again.

What does this mean?

Well, say you had an old credit card from 1999 that you defaulted on and eventually stopped paying. The original creditor (OC) charges off the debt, closes their books and sells YOUR debt to a third-party junk debt buyer (JDB). The JDB pays pennies on the dollar for your debt.

If you agree to settle for even half of the debt (if you are going to pay a collector, always negotiate down the debt, they’ll often settle for 70% of the original amount because they are still making HUGE profits!) the JDB is still making an obscene profit off of YOU.

However…there is GOOD NEWS if you have one or more of these JDB’s after you. They are banking on the fact that the majority (some estimate it to be as high as 97%) of Americans who are sued over old credit card debt do not show up for their hearing date and do not try to fight the lawsuit in any way. Even if you do owe the debt, this is the worse thing you can do!

Here’s the scoop….

If a creditor has determined that you are a good prospect for paying on your debt and you have failed to respond to their demands for payment you will then be moved to their “legal department”.

Many of these junk debt buyers or collection agencies have retained law firms that are basically collection agencies masquerading as law firms. They usually have one legitimate lawyer working for them and the rest of the employees are just plain old collection agents. All these JDB’s have to do is file a Complaint (typically for Breach of Contract) with the civil or district court in the county where you reside. They will pay a nominal fee and a process server to deliver the Summons to you in person.

YOU CAN BE SERVED AT YOUR WORKPLACE OR HOME!

You generally only have (20) days to respond to the Summons with an Answer, which is a document that must be filed in person at the courthouse by YOU and a copy sent Certified Mail, Return Receipt to the attorney representing the creditor.

If you DO NOT RESPOND WITH AN ANSWER WITHIN 20 DAYS (OF THE DATE YOU WERE SERVED) a DEFAULT JUDGEMENT is entered against you AND this gives the collector the GREEN LIGHT to FREEZE YOUR BANK ACCOUNT AND GARNISH YOUR WAGES!

Note: Often the “collection attorneys” are junk debt buyers themselves and actually own the debt.

Most Breach of Contract lawsuits are filed in civil court, NOT small claims. The creditors are smart and know that in the civil courts YOU must be represented by a lawyer or you can represent yourself buy must follow standard rules and procedures of the court. This is called being a “Pro Se” litigant.

A “Pro Se” litigant must file proper legal pleadings and represent themselves just as a lawyer would. It’s really quite simple but you can understand why this scares off so many litigants and why civil judges often spend one or two afternoons a week going through complaints and granting default judgements because VERY FEW defendants know how to/nor have the time to figure out how to respond within the (20) day time-frame.

If a DEFAULT JUDGEMENT is entered (which happens over 90% in these cases because people don’t have the time and knowledge to fight back!) your creditor AUTOMATICALLY WINS THE LAWSUIT!

The creditor doesn’t even have to show up to court and OFTEN DO NOT! YOUR FAILURE TO RESPOND WITH AN ANSWER AUTOMATICALLY GRANTS THE JUDGEMENT TO THE PLAINTIFF (THE CREDITOR)!

Over 90% of credit card debt lawsuits end in default judgement because the defendant does not appear and/or does not respond with an Answer. This is a GOLDMINE for the creditors!

They expect you NOT TO FIGHT BACK and are literally banking on the fact that over 90% of debtors roll over and accept the judgement. Oftentimes the amounts these companies are suing over have been ridiculously inflated and they have NO RECORDS to back up their claims, additionally they are NOTORIOUS for violating the Fair Debt Collection Practices Act and for trying to collect on out-of-statute debts. The statute-of-limitations on debt collection can range from 3 years to 10 dependant on your state’s regulations. You can easily Google the SOL for your state.

If you respond with an proper “ANSWER” within the required time-frame (generally 20 days) your chances of their DROPPING THE LAWSUIT are VERY GOOD! They don’t want to actually fight you in court, that costs them time & money. AND, they OFTEN don’t have any kind of records to substantiate their claims.

When the JDB’s purchase debts they receive minimal information. In many cases, the actual credit card contract you signed (and statements) is unavailable as the original creditors closed the books on your account years ago. Additionally, YOU never signed any kind of contract with the collection agency…..this is another defense that you can raise.

If you’re still hesitant to fight back, consider this:

They’ll be monitoring your credit report electronically….any purchases or even requests for credit will raise a red flag. They will know if you’ve bought a new car, house, boat, or anything of value that they can put a lien against.

YOU NEED TO AVOID A DEFAULT JUDGMENT AT ALL COSTS! IT WILL RUIN YOUR CREDIT FOR A MINIMUM OF 7-10 YEARS!

The Good News -

I was served with a summons for breach of contract in May of 2007. I immediately began RESEARCHING….AND RESEARCHING……AND RESEARCHING.

I’m a middle-class person who ran up some debt in my early twenties. I made sporadic payments not realizing the detrimental effect that it was having on my credit report. All told I believe I actually charged about $1,000 on a VISA card. My account was turned over to various collectors where I would make one or two large payments and then I wouldn’t hear anything….and then another one of these collectors would crop up. I eventually stopped paying. The sporadic payments I was making weren’t even making a dent as they just kept adding charges onto my balance.

With all the late fees, over limit fees, and interest charges I felt like I had probably paid them well over what I originally owed and at the time I just couldn’t keep up. They pretty much dropped off the face of the earth for many years and I forgot about it. I got married, bought a house (with a terribly high interest rate), car, had kids, etc……and then last May some beater car pulls up to my house and delivers me a Summons while I’m outside watching my daughter ride her bike. It was very unsettling. I was being sued for $5,000 plus legal fees and I had 20 days to respond with an ANSWER. The wording was such that I could tell the “collection attorney” expected me to just accept the judgment.

So, I began my RESEARCHING, it’s not easy, but SO worth it. I began researching at the law library, poring over legal message boards, NOLO law books, and credit repair blogs and websites. I spoke with an extremely helpful court clerk who gave me the real dirt on how these companies operate and I was fortunate enough to consult with a consumer affairs lawyer.

All of my work paid off and my creditor dropped their lawsuit.

Regardless of your exact situation, the first step is to FILE AN ANSWER. Your creditor will either drop the lawsuit or you will be granted a court date. In all likelyhood, the creditor won’t show up for the court-date (granting you automatic dismissal) and if they do, you’ll be in a better position to negotiate a settlement or payment plan with them.

Utilize the internet, there are many, many folks in the same boat as yourself. There are many helpful message boards which are a good place to start.

Try to remember that even though the debt is yours, you have every right to have their claims against you substantiated. These companies are making a tremendous profit off of hard working Americans and you owe it to yourself and your financial future to face the music and fight your lawsuit as best you can.

By: Jay M Johnson