The Most Dangerous Myth for Consumers in Debt

July 22, 2018

The Most Dangerous Myth for Consumers in Debt

For a free copy of this article in PDF format, click here: the Most Dangerous Myth

Consumers who owe money – debtors – often believe a lot of myths that are bad for them. Debtors can be desperate and will look for what seems the easiest, fastest way out of trouble. That makes sense – if you’re being sued you do need immediate action. But you must be on guard for myths that will hurt you by luring you into the wrong action, or no action.

And the worst myth being played to people being sued is the idea that somehow someone else will take care of them. It shows up in many ways and is always bad news. It isn’t necessarily your fault if you have believed this destructive myth – there are a lot of people peddling it. But your chances to beat the debt collectors and protect your money depend on your taking charge.

The Myth – where does it show up and how does it do so much damage?

Let’s look at some of the biggest examples of the myth that someone ELSE will take care of you.

People Think the Debt Collectors will Try to be Fair

Everybody KNOWS this: Debt collectors make very little effort to be fair once a lawsuit is filed – and they don’t try much before that, either.

Once you’re in a debt collector’s sights, the only thing they really care about is getting your money. At the “harassment stage,” the debt collectors are paid depending on how much they can get you to pay, and not many people think they trust them to tell the truth. And yet so many people tell me they have offered information or money to the debt collectors or asked them to give them a break in some way. They SAY they don’t trust them, but then they depend on them to make a fair or helpful offer. And when they’re talking to them about “how much they owe,” they believe the debt collector instead of demanding proof.

You’ve learned to tell the truth, so you trust and believe the debt collector on the phone will tell you the truth. And you do that even while you, yourself, might feel free to lie to them at any given point.

The debt collectors know all that, and you can’t trust a word they say. You must take care of yourself, and with debt collectors, that means checking every fact they claim and making them write down every promise they make. Anything short of those things is trusting someone you don’t know, who doesn’t care about you, and has strong financial incentive to rip you off, to do the right thing. That’s naïve and foolish – and it happens all the time.

People Think the Lawyers Will be Fair

I know, you’ve probably heard the joke: “How do you know if a lawyer is lying?” – “His lips are moving.” It’s fashionable to say bad things about lawyers, and everybody knows, in the abstract, not to trust them. But there are two major forces going against you in a debt case. First, lawyers are not all untrustworthy, and most of them don’t sound like they are. They make their living by getting people to believe and trust them, after all. The second reason is more insidious: it is power. Lawyers in debt cases have the power to make your life very difficult. They can embarrass you, put you to enormous stress and expense, and they often treat you like dirt. In addition to that, they represent large, rich companies, while you are a financially stressed individual.

Faced with such a difficult situation, it’s easy to hope for the best. And if you can hope it, you can believe it, right?

Legal Ethics

The lawyers are supposed to be careful, at least, before filing suit. They have an ethical obligation not to bring meritless suits.

Do you believe they make that effort when suing debtors? Probably not – and you would be right. The courts wink at the collection process, allowing lawyers to “rely” on the statements of the creditors that you owe the money. In the case of debt buyers, ironically, the very agreements by which they buy debt say that the records cannot be trusted and are not guaranteed. But the lawyers forge ahead usually without the slightest idea of what’s in the case, let alone whether it’s right or not.

And the courts let them.

On a more fundamental level, a lawyer’s main and almost exclusive duty is to the advantage of his or her client. It isn’t ethical for a lawyer to “cut you a break” at the expense of his or her client. They won’t ever do it.

And yet debtors share information and throw themselves on the mercy of these sharks by the thousands per DAY. That’s trusting the myth.

Trusting the Courts

Most people trust the courts. They know that a lot of judges are bozos in black gowns, and they know that most judges come from the plaintiff’s side of the law. They know the legal system is skewed in favor of the rich even as the laws are skewed in favor of the rich. They know, theoretically, that trusting judges to take care of them is a big mistake.

And yet you would not believe how many people tell me the judge should have seen through something or not allowed the debt collector to do something – often without even having asked the judge for what they wanted.

Know this: it is not the courts’s job to take care of you. They give only the briefest look, if any at all, at the outcomes of debt cases – they don’t have time, they don’t care, and they aren’t even supposed to care. The legal system is designed as an “adversary” system. That is, it is a fight, and in any fight people could use various strategies. The court will let you use almost any strategy you choose, and if that causes you to lose it isn’t their fault or concern.

The courts will not require the debt collectors to put on admissible evidence. If they did, most debt collectors would never win their cases. Instead, it is up to you to object to evidence you don’t like and make the court keep it out. If you don’t do that, the court lets it in.

And yet people expect the court to try to make the outcome of cases fair. They do not. Believing they will is believing the myth that someone else will take care of you.

In daily life, people do look out for each other quite a bit. In legal life, NEVER.

You wouldn’t believe how many people do not even show up in court “because they don’t owe the money.” They somehow trust someone to see that and care, but this is just foolish.

The Myth, outside of Court

People in debt frequently look to other people for help in the belief that those people will, in fact, help them. On the internet, there are people earnestly telling you that no one owes anybody anything (the “Accept for Value” idea), yet they’d be outraged if you didn’t pay them – just as you would be outraged if you went to work and your boss told you that. To believe the A4V theory is to believe that someone is taking care of you. More than that, to believe the people hawking that, or any other program, is also to believe the myth.

Even Me

Everything I’m saying here applies to me, too. You might be surprised how often I get emails or messages asking me what they should do and presenting pages of facts or laws. They want me to take care of them – they are trusting me to take care of them.

Representing yourself pro se means developing your OWN judgment. It requires carefully weighing facts and motivations and coming to your own conclusions. It means figuring out the facts and how to get them.

It takes work, and it takes time.

When debt collectors sue you for debt, you have a very good chance to win. But it is up to you to make that happen. Our materials and memberships exist to help you know what you need to do and to help you do it. We want to teach you how to defend yourself. Once you learn that, it changes your whole view of the world. It frees you from the myth that someone else will do it for you and lets you soar on your own wings.

Your Legal Leg Up

Your Legal Leg Up is dedicated to helping people defend themselves from debt lawsuits without having to hire a lawyer. Lawsuits have a number of points where specific action is called or, and we have products to help you deal with most of these situations. We also have memberships that give you access to more materials and better training, and also provide a regular opportunity to ask questions and get answers in real-time. You can use this time to find out what the debt collectors are trying to do and what you might do in response, and you can get guidance on the issues that matter and how to think about and address them.

In addition to that, our website is a resource for all. Many of the articles and materials are reserved for members, but many others are available to everyone. Every page has a site search button in both the header and footer. Put in a key word – a word you think relates to what you’re looking for – and enter. You will get a page of results.

Products Related to this Article

Because this is a general article, there are not any products specifically related to this post. I do suggest asserting your rights early and often, and you might find our Take Control of your Life product helpful in that. I also suggest great care in researching and analyzing facts and law. You might find our Guide to Legal Research and Analysis product helpful for that.

Beyond that, if you are facing significant debt problems, I’d suggest our memberships.

Memberships

Members get discounts on all products as well as unlimited opportunities to join our regularly scheduled teleconferences. This gives invaluable real-time assistance, answers to questions, help with strategies, and encouragement. You also get the Litigation Manual and the Three Weaknesses Report for free with membership. Find out about memberships by clicking the “About Memberships” link in the menu at the top of the page.

Sign Up for Free Information

You can sign up to receive information from us by clicking on this link and following the instructions: https://yourlegallegup.com/blog/sign-up-for-free-information/

What you’ll receive if you sign up is a series of several videos and articles spread out over several days, and then you will occasionally hear from us as we add information to the site. We don’t always announce that information, though.

What you will not receive is any marketing from other people – or much from us, either. Our goal is to make the site more useful to members and visitors, not to swamp anyone with sales materials. The information we send will have links to information or products that we think may be helpful.

Ending the Debt Nightmare Pt 3

July 21, 2018

This was originally part of a promotional series. In that series we discuss the way people often run into debt trouble. It starts with some difficulty – often medical bills or a lost job (or both, obviously). Then is spirals out of control because the bills don’t stop coming even if you’re having trouble paying them.

The banks are often only too willing to lend to people having trouble paying debts. In fact, they target people like that because one of their main sources of income is the exorbitant fees they charge for anything that goes wrong.

And then the debt collectors get involved…

Ending the Debt Nightmare Part 3

Bothered by Debt Collectors

July 21, 2018

Debt – both a personal problem and a social issue

We know that if you are facing any kind of debt problems – and most definitely if you are being sued or threatened with suit – you have a situation facing you, personally, that is extremely important. We take that very seriously, and most of our efforts are designed to help you solve the problem on a personal basis. If you’re being sued, for example, that means we want you to win – and then to repair your credit report so that it doesn’t hurt you anymore.

If you are being harassed by debt collectors or have a negative credit report already, we want to help you fix those things at the personal level. Thus we are strong and committed advocates for you. We’re on your side all the way.

There’s also a social justice issue here which is worth keeping in mind. You will not always find the courts sympathetic to you or willing to listen – or to do their job at all, frankly. We believe that this reflects a larger issue where the powers that be seem to think it is perfectly fine to rob from the poor and give to the rich. In this area, we think that the more people who represent themselves in cases like this, and the stronger and better you are at standing up for yourself… the better everybody else will be. And the more who do it, the better for everyone. So we are also strong social advocates.

In other words, sometimes the courts may seem unwilling to listen to you or actually hostile. If you persist, though, you will still have an excellent chance to win.

Stand up for yourself in every way. Don’t let the debt collectors rip you off – which they will certainly do if you give them the chance. Fight back! Even if you used the credit card or borrowed the money, you have to defend yourself to make sure they don’t get any more than they should and don’t do any more harm than they’re entitled to. And in reality, you have a really great chance to win. Completely.

The law is an adversary system, and the up-side to the fact that if you don’t take care of yourself the debt collectors will rip you off is that if you do take care of yourself you will probably be in better shape than you can even imagine possible right now.

Sued for Debt – What’s Reasonable to Want out of Settlement

July 19, 2018

What’s Reasonable to Want and How do you Get it?

If you’re being sued for debt and have at least some money, you may be thinking about settling the case. What’s reasonable to pay? What’s reasonable to want in return for your money? And how do you go about it all?

These are questions that came up in a recent case evaluation. The answers are dynamic, but in a general way they point to some useful ideas.

Settlement Happens When Both Parties Agree they Can’t Do Better

In lawsuits, and perhaps all of life, you take actions you think will give you the best possible outcome. That’s a simple idea, but what it means is that if a company is suing you, they will settle if and only if they think it will give them a better outcome than pursuing the case to trial. In evaluating their case they look at “risk” (of losing) and cost (to pursue the case). When they file the suit, they fully expect to win the case either by default or within a few short weeks without having to spend any significant effort on it. Their only concern is whether you’ll be able to pay, but they do have a serious concern about this issue and will likely either settle for less than they demanded. But not much less.

If you want a better settlement, you’re going to have to take actions to change the way they view the suit.

Look at the Overall Case

Not all lawsuits or claims for money are created equal. If the plaintiff is a debt buyer (and not an original creditor), they will very likely have some or all of the weaknesses we mention in our Three Weaknesses Report. That is, they probably cannot win the case if you fight it intelligently. But they don’t expect many people to fight at all, and of those who do fight, they don’t expect many to know what they’re doing.

That means that when they file suit they completely discount all risk of losing, and they expect costs to be minimal. You need to change those opinions, and if you fight you can change their opinions about both of those things… eventually.

If the plaintiff is an original creditor, there is still a chance they’ll have the three weaknesses. But again they will completely discount any risk of losing. And remember, the lawyers bringing these cases scarcely if at all look at the cases – they have no real idea of what they have. They base their lack of concern over losing on the fact that so few people fight the cases.It’s a waste of money, they figure, to spend even one minute per case looking at the file when almost none of them will actually be disputed.

Again, you can change that by fighting. In discovery you can find out whether they have what they need – and at a minimum you will be adding to their risk (since they’ll have to start spending money to pursue the case, and they’re worried about whether they’ll get it back).

Therefore, it almost always makes sense to start fighting – and to do as good a job at it as possible – whether you have a debt buyer or original creditor, and whether or not you want to settle or try to win.

When it’s Time to Talk Settlement

After a while, you may be able to get the other side to take settlement more seriously. When you do, what can you reasonable expect from them? Well, in short, that all depends on just how worried they are about their risk of losing and the cost of continuing. If they’re very worried, you could get them to clear whatever credit damage they have done to you, take little or no money to walk away, and give you a dismissal with prejudice.

If they’re not worried, you won’t get much from them. Simple as that.

Factors to Consider in your Favor

Some things that could help your case – you’ve shown them that:

They need, but don’t have, a contract with your signature
They cannot get records of the debt into evidence
They cannot prove they own the debt
The case is going to require a significant amount of attorney time to complete
The case will not be resolved for a long time
They know you know these things

Factors that Could Hurt Your Case

There are some things you can do to make settlement more difficult. And understand, the better your chances of winning are, the more likely they are to settle, so these factors should be considered damaging to your chance of winning at trial.

You have admitted to them you owe the debt
You have paid the debt collector money
You have told the debt collector where you work or bank
The trial has been set for a date not far away
You have not conducted any discovery

Do you see how all of these things lower their risks or uncertainty regarding getting money from you?

Note that one thing that is NOT a factor is how much they paid for the debt (if they’re debt buyers). They probably did not pay much, and this might have a small effect on the amount of money they insist on, but their rights are measured by the amount of the original debt. And they will push for the most they can get according to the factors we mentioned above. How much they paid for the debt makes almost no difference. Whether they have “written off” the debt is an accounting matter that also has no impact on your negotiations or the case in general.

Conclusion

If you can do a lot of the things that help you and avoid most of the things that hurt you, you have a very good chance of winning at trial. The better your chance of winning is, the better a settlement you could get if you settle. It all starts with knowing what you’re doing as soon as you can (and of course that’s what our membership is for).

We often say there are no free lunches, and that most definitely extends to settling lawsuits. They will only settle with you and give you what you want because they think that is better than the alternative of continuing to fight. Don’t expect them to settle as a favor to you or from the goodness of their hearts. It just doesn’t work that way.

Motions to Dismiss Part 2

July 17, 2018

Motions to Dismiss in Debt Collection Cases, Part Two

When you’re being sued on a debt by a debt collector, motions to dismiss can come up in one or both of two ways: you could file one against them – or they could file one against you. More specifically, (1) you could file a motion to dismiss their lawsuit, or (2) they could file a motion to dismiss your counterclaim.

It is also possible that either or both of you could file a motion to dismiss certain affirmative defenses, although this does not happen very often in debt cases.

This is the second part of a two-part article. For the first part, click here. For a video on arguing motions in court, click here.

What Motions to Dismiss Are

So what is a motion to dismiss? A motion is always the way a litigation party asks the court to take some official action. A motion to dismiss is a motion asking the court to get rid of some part of the other party’s case on the grounds that, even if what the other side says is true, it doesn’t give them the right they claim. For this reason, motions to dismiss are sometimes called motions “for judgment on the pleadings” or “demurrers.” The crucial fact in all of these motions is that all the facts alleged in the pleadings are taken, for purposes of the motion, as granted just as if they had been proven. If the motion is denied, the facts will still have to be proven later in trial.

In the Litigation Manual I illustrate the concept by supposing that a policeman has issued a ticket for exceeding the posted speed limit, but the ticket says you were going 25 mph in a 30 mph zone. There, even if what the ticket says is true (and in this case, specially if it is), it simply does not state a violation of the law. A similarly basic example in the debt law would be where you sued the other side under the Fair Debt Collection Practices Act without alleging an action that violated the act.

Many motions to dismiss really seem to be calling the court’s attention to some obvious mistake, a simple oversight, perhaps. Naturally, however, many motions to dismiss are not so simple. In many cases, although the facts are clear, what the law provides or requires is not, and these would be cases appropriate for motions to dismiss.

You can move to dismiss any claim or count of the petition. If you do not seek to dismiss the entire petition, you have to answer the part you do not try to get dismissed.

Because the motion assumes that every fact alleged is considered true, motions to dismiss are said to be “testing the sufficiency of the pleadings.” Most courts will go ever further than that, and state that, if any set of facts (alleged or not) consistent with the pleadings could result in a valid claim, the motion to dismiss is to be denied, but from the point of view of a pro se defendant, this rule has limitations. Depending on unalleged facts can be a dangerous occupation for someone wanting to avoid a motion to dismiss.

Defendant’s Motions to Dismiss vs. Plaintiff’s Motions to Dismiss

Technically, a defendant’s motion to dismiss is treated in the same way as a plaintiff’s motion to dismiss, the only differences being who brings them and when. In any event, what is up for grabs is purely a legal question: does the law allow or prohibit certain action, and does it give a right to the person claiming it?

Despite the legal equivalence of the motions brought by plaintiff and defendant, it makes sense for us to look first at defendant’s motions, which you are likely to file against debt collectors, and secondly at plaintiffs’ motions to dismiss counterclaims or affirmative defenses, which debt collectors are likely to file against you.

Motions to Dismiss by Debt Defendants

When Petitions (or counterclaims) are filed, they are supposed to be following one of two types of pleading: “notice” pleading or “fact” pleading. The type of pleading required can make a very large difference, and it is determined by State law. In other words, your state requires either fact pleading or notice pleading. One of your first actions as a defendant in a debt lawsuit should be to find out which rule your state follows. Most states require fact pleading.

Fact Pleading

If your state requires fact pleading, then filing a motion to dismiss is as “simple” as looking at the elements (parts) of the case the plaintiff is alleging (its “prima facie” case), seeing if every fact necessary to prove that case is alleged, and moving to dismiss if any parts of the prima facie case is missing. You might think that debt collectors, who file millions of these cases per year, would never omit a part of their case in the pleadings. In fact they do so quite often, and this is simply because of the nature of their business: they buy huge numbers of supposed debts with minimal paperwork, file cases by the truckload, and rarely get challenged by defendants or the courts. In reality, lawyers are creating forms that secretaries fill out much of the time. They are not sharp, in other words, nor do they need to worry very much about their petitions. It is easy for them to make mistakes in the pleadings, and they often do. And sometimes they do it on purpose.

For a simple example, consider the filing of a claim of breach of contract in Pennsylvania, where a plaintiff on such a claim must either state the terms of the contract or attach a copy of it. Debt collectors almost never do this despite the rule – because they can’t. They don’t have the contracts. The huge majority of the cases are won by default, but those who defend simply file a motion to dismiss (called “Preliminary Objections” in Pennsylvania). Eventually the cases of persistent defendants get dismissed with prejudice, but for each case that gets dismissed, probably thousands of inadequately pleaded cases result in default judgment for the debt collectors. And the debt collectors are never punished for flouting the law. See the attached sample motion and judgment.

Notice Pleading

Where the jurisdiction is “notice” pleading, a motion to dismiss is much more difficult to win. Notice pleading means that a petition must give the party being sued some “general idea” of what he is being sued for, and in some courts this is such a vague standard that it is almost impossible to succeed in your motion to dismiss. Unless the debt collector actually names its theory in a heading (as they often do), if it does not state all the elements of an obvious claim, your motion may well be a “Motion for More Definite Statement.” In this motion you point out that the plaintiff has not alleged any specific claim and you ask that the case be dismissed or that the debt collector be required to state the elements of a claim. Your argument there is that the vague petition fails to give you adequate notice of the claims being brought against you. This type of motion (for more definite statement) has many of the advantages of a motion to dismiss and should probably be brought if possible.

If you win that and the plaintiff then files an Amended Petition that is also inadequate in stating a claim, you will either oppose the amendment or file a new motion to dismiss.

Timing – When to File

There are two aspects of time you must consider when filing a Motion to Dismiss (or for More Definite Statement). The first of these is whether you must file your motion to dismiss before filing an Answer. In my opinion it is always a good idea to file a motion to dismiss – on any basis – before filing an Answer.

How to Create Good Faith Letter

June 20, 2018

Hey there! This content is available to MEMBERS only! Consider registering for an account.

Court Involvement in Discovery

June 20, 2018

What is the court’s involvement in discovery? Does it oversee interrogatories, requests for production and requests for admissions?

In most jurisdictions, there is no court involvement in the discovery process unless and until a motion to compel becomes necessary. Even in those jurisdictions, a lot of people will send a “notice of service of discovery” which simply informs the court of the date and type of service certain discovery was served on the other side: “On this date, defendant served his first set of interrogatories, requests for admissions, and requests for production on plaintiff by first class mail, postage prepaid, at the address noted below as the service address.”

Perhaps a very few courts require this by local rule. For other courts, it probably does not hurt and may occasionally do some good. If, for example, some issue of notice arises, parties are usually held responsible for knowing what was in a notice to the court. I’m not aware of that ever actually making a significant difference, however, and most lawyers do not send such notices unless required by rule.

In a very few courts – I just heard of one shortly before writing this article – the courts still take copies of the discovery. That’s a question you could ask a court clerk and probably get an answer, because if they don’t want it, they really don’t want it. That is, for most courts if you send them a copy of the discovery you sent to the other side, the court will return it to you and not accept it.

The Way Discovery Works

What happens is simple. You serve discovery directly to the other side. They answer, object, or ignore you. If you take no further action, nothing will happen. No one looks out for you! Some people think that’s wrong, but the court gives the parties the freedom to choose their fights, and if you don’t fight about it, the court is only too happy to forget it.

Specifically this means that if you serve discovery on the other side and they ignore it, the court will probably not prevent them from using things they should have given you at trial. If you want to protect yourself you have to follow through.

If you want to force the debt collector to answer, you must file a motion to compel (and typically you have to send them a “good-faith” letter to try to get them to agree to answer, first). Then you attach all your discovery requests and their answers and objections, and file it with the court. That’s the first time the court will see it, so your motion to compel has to be thorough and complete.

And there’s more. After the other side responds, you will need to “call” (schedule your motion with the court) and argue it in front of the judge in order to get the court to rule. The court will either sustain their objections or overrule them and order them to answer the requests. It will usually give them a little time to do that.

At the argument and in your motion, you have to go through each item of discovery and every objection one at a time. It can be maddening, but you are asking the court to rule on a long series of objections, and it must make up its mind on each separate thing.

Statute of Frauds

June 20, 2018

How the Requirement of a Written Contract Can Affect Your Case with a Debt Collector

Everybody has heard of the statute of limitations, which refers to the amount of time a company has to bring suit against you, but have you ever heard of the “Statute of Frauds?” That can be equally important for some debt disputes in rare circumstances.

What is the Statute of Frauds?

The statute of frauds is a law – a written statute – that every state legislature has passed, as far as I know, requiring that certain claims can only be brought if there is a written contract. You will be able to find the statute for your state by googling “statute of frauds” and your state name. In plain English, the statute of frauds means that you cannot sue on an oral contract if the amount in dispute is over a certain limit, or if the performance of the contract was not to be completed within a certain amount of time. A promise to repay $10,000 at some undetermined time, for example, or to repay a certain sum over a period of time greater than five years (i.e., $10,000 in $100 payments until the balance is zero), would almost certainly violate the statute of limitations.

This is not an issue that comes up directly in most credit card cases, obviously, as the credit card application – if they can find it – or other supporting documentation which they often have, would take the case out of the statute of frauds.

Unilateral Contracts

Another reason the statute of frauds rarely applies to debt cases is that use of a credit card creates what is known as a “unilateral” contract to repay the money borrowed (to pay for the purchase). A contract is made when there is an offer and an acceptance, and use of a credit card, sent under certain conditions, is an acceptance that creates a contract. And this is so whether you sign an agreement to follow the terms and conditions of the contract or not. Debt collectors love to use this because they almost never have the contract, however you should remember that they must still prove you used the card, and they must prove the terms and conditions – all with competent evidence.

Settlement

Another way the statute might come up in the credit card context is a debt collector harassing you and then, supposedly, claiming that you have agreed to settle the case over the phone for monthly payments of $200 for the next six years. That sort of agreement would probably violate the statute of frauds.

Statute of Frauds Applies to Either Party

It cuts both ways, too: if you think you have an agreement to settle a case brought by a debt collector for payments of some amount of money extending over more than five years (in some states – check on yours for the time limit that applies to you), but you do not have it in writing, then you do not have a settlement. Understand: this does not mean that payments that would occur after the five years are up do not have to be made, it means that the entire contract… is no contract. None of the payments have to be made – and none of the actions for which those payments would be made (like dismissing the case against you) have to be done.

Remedy for Violating the Statute of Frauds

There is no “remedy” for violating the statute of frauds. If you make an oral contract that does violate it, that contract is unenforceable. That is, you can’t sue or be sued, for breaking the contract – there is no contract. The fault can be “cured,” of course, in certain ways. Obviously putting the contract into writing would cure it. “Partial performance” sometimes will do it, too. That is, if the person who has something left to do starts to do it, that might cure the contract. Thus if someone claims you owe them money under something you think breaks the statute of frauds, a partial payment might have disastrous consequences for you.

Integration Clause

Most written contracts have something very much like a statute of frauds built into them – and you should be aware of this, again, in the settlement context of any debt on a written contract. It’s called an “integration” clause. It’s the thing that says “this contract is the complete agreement between the parties and cannot be changed unless both parties sign any modification” [or words to that effect]. Most contracts have an integration clause, and every credit card contract I’ve ever seen has one. In most situations this part of the contract means that you must have a written and signed agreement before you take any action on a contract. An oral agreement will not change any part of a written contract with that integration phrase.

In your normal life, this also means that if you have an oral agreement with someone and then you create a written contract to “get it in writing,” the written contract will likely wipe out the complete oral agreement – so you have to get everything in writing, not just part of it.

Memberships with our site

June 20, 2018

Memberships with Your Legal Leg Up

Our membership is a tremendous value and an effective way to level the playing field between you and a debt collector.

After years of providing debt defendants what they need to beat the debt collectors, I have figured out a way to make beating the debt collectors less stressful and time-consuming. If you’d like to save time and stress while improving your chances of victory, keep reading.

How do you “Level the Playing Field” with the Debt Collectors?

As I have often pointed out, the debt collectors rarely have the evidence they need to win a case when they file suit. Instead, they rely on people defaulting or giving up. That’s how they get away with adding illegal fees so often or suing people who never owed any money – or suing for debts they don’t own.

The debt collectors have designed their litigation process to make it more likely that people will give up – they “tilt” the playing field so that fighting them to obtain justice and fair play is always up hill for you. From Petitions alleging the same debt three or four different ways (making it look like you might owe three times as much as they even say you do) to “fake” affidavits of robo-signers swearing to things about which they have no knowledge, to fake account statements and bogus notices – all these things are designed to trick or intimidate people into giving up. Many of these illegal or immoral tactics have been “business as usual” for the debt collectors. They’re notorious for dirty tricks.

And the debt collectors also start with some “institutional” advantages when they sue people for debt – they do this all the time, you know. The debt collectors have associations of other debt collectors and lawyers who provide them the latest information and court decisions nationally, or just contacts to help them strategize how to deal with your case. They have “document banks” – computer files of petitions, motions, discovery, etc. that they know have worked in cases before. These give them a big advantage: they can draft a petition and serve discovery with a few keystrokes by a paralegal, whereas you are left to spend hours responding. They know what works because they know what is happening in the hundreds of thousands of cases like yours that get filed every year.

How do you neutralize the debt collectors’ advantages and level the playing field?

Introducing Your Legal Leg Up Memberships

In order to counteract the advantages of the debt collectors I have created two types of membership with Your Legal Leg Up: Gold and Platinum. These memberships will allow me to provide you more and better service, give you expanded access to helpful materials, and keep you updated on the latest strategies and techniques that people are using to beat the debt collectors. You will have your own “document banks” where you will be able to download documents that have been used successfully by other people in fighting debt collectors so you don’t have to spend ten times as much time as the debt collectors do on simple documents. And you will special access to me and – more importantly – to other people like you who are actually fighting the debt collectors.

Benefits of Membership

As I mentioned above, there are four main features of membership: expanded access to materials, keeping up to date, connecting with others, and creating and building a document bank of documents you can convert to your own use without a ton of trouble.

Expanded Availability of Services

Through the newsletter and members-only homepage, you will receive updates, alerts, and reports and the tried-and-true, easy to understand materials in the ever-expanding “members-only” section of our website. Members will have access not only to the free access videos, but also to our extensive members-only video collection and the Your Legal Leg Up Video Series–now available ONLY to members, previously sold for $149 and available online.

Keeping Current

With the new membership comes a free subscription to Fightdebt!, official newsletter of Your Legal Leg Up. Every month it will give you the latest news in debt litigation as well as special tips on debt litigation, consumer issues, and credit repair. This is another benefit that is available only to members, valued at $49/year. You will also get new videos, reports and alerts as they happen.

Connecting with Others

Although some of the other benefits of membership may be more tangible and obvious, I actually think this benefit is going to be one of the most important benefits of membership. We will start with a members-only blog (which I will mediate), and this will allow more freewheeling contact between members. It is also my goal to connect those who want to be connected to other people who are from the same state. It’s hard to overestimate the advantage that comes with being able to talk to someone else going through the same thing, and working on pleadings and motions (for example) together could even make the process fun. Monthly teleconferences are free for members so callers can benefit from hearing one anothers’ questions and experiences, and a teleconference connections webpage also provides a forum on which participants may share and connect.

Software

Some people do not have a word processing program that will help them create professional documents or cut and paste documents from the document bank. Members will receive a link to a free word processor which will fill that need. Likewise, for ease of viewing, members will be provided a link to a video player that will let them play or download videos from the site.

Who can use FDCPA and Who follows it

June 20, 2018

Who Can Use, and Who Must Follow, the Fair Debt Collection Practices Act

The Fair Debt Collections Practices Act only applies to consumer debts and, by and large, the actions of debt collectors (or original creditors pretending to be debt collectors). This is broken down into the questions of the type of debt for which collection is sought and the type of entity seeking the debt. In this article we will first discuss what the FDCPA covers, and then what that means to you.

Consumer Debts only

The FDCPA applies to “consumer debts,” or debts incurred primarily for personal, family, or household purposes. 15 U.S.C. Sections 1692a(3) and (5), Creighton v. Emporia Credit Service, Inc., 981 F.Supp. 411 (E.D.Va. 1997). When the debt is rung up on a corporate or business credit card, the courts will look into the nature of the debt – and not simply the name on the card. As I have pointed out elsewhere, however, making this argument can be dangerous to the “corporate shield” since it suggests a merging of assets which is sometimes used to defeat the corporate shield and allow a creditor to pursue an owner of the corporation.

Natural Persons Only

The act also only protects “natural” persons, which means it applies only to actual people and not corporations or separate associations. Again, since debt collectors never actually speak to corporations or businesses, but only to human individuals, this simply means that if a debt collector is calling on a debt rung up for business purposes, or calling a business regarding its debt (and harassing whoever picks up the phone, for example), the FDCPA does not apply.

Transactions Only

Because the FDCPA applies to only consumer debt, it applies only to “transactions” engaged in primarily for personal, family, or household debt. In other words, it does not apply to debts generated by child support obligations, tort claims (lawsuits against you for harming another person), or personal taxes, for example. Mabe v. G.C. Services Limited Partnership, 32 F.3d 86 (4th Cir. 1994); Zimmerman v. HBO Affiliate Group, 834 F. 2d 1163 (3rd Cir. 1987); Hawthorne v. Mac Adjustment, Inc., 140 F.3d 1367 (11th Cir. 1998).

On the other hand, the term “transaction” can be fairly broad, and would include things like condominium fees or other fees or debts incurred as part of a transaction that might, in fact, have occurred years before the debt in question arose. Because the FDCPA applies to debts arising out of transactions, it has applied to condo fees for a house the consumer once lived in but later (at the time of the FDCPA violation) was renting out to others for the purpose of generating income. This would suggest the reverse might also be true – a condo originally purchased for business purposes but later converted to personal use might not be covered by the FDCPA, but I have not seen a case with that holding.

The Act does apply to things you might consider “non-credit” obligations, such as bad check debts, condominium assessment fees, residential rental payments, municipal water and sewer service, and other non-credit consumer obligations – Bass v. Stolper, Koritzinsky,Brewster & Neider, S.C., 111 F.3d 1322 (7th Cir. 1997); FTC v. Check Investors, 502 F.3d 159 (3d Cir. 2007).

Debt Collectors Only

In general, the FDCPA applies only to “debt collectors.” What that means used to be a lot clearer than it is now.

The Supreme Court confused the question of who was a debt collector in some decisions in 2018. Primarily, it determined that when a company buys a debt – regardless of its status at the time of purchase – it is a “creditor” under the part of the law debt defendants had been using to sue junk debt buyers.

Instead, a person buying a debt might be a debt collector if its “principle business” is the collection of debts. It is not clear HOW MUCH of a company’s business must be collection of debts for that to be its “principle business.” I would guess a sizable majority – perhaps 90% or more – but the term has rarely been litigated, and has never been quantified to my knowledge. It would seem clear that a bank with a sizable business providing credit cards would not be a debt collector if it happened to buy someone else’s debts and bring suit on them. Likewise, law firms buying debt and suing on them would probably not be debt collectors if they do anything else – a truly unfortunate result, in my opinion.

But classic debt collectors (i.e., those working for someone else) would still be debt collectors, and so, probably, are the largest junk debt buyers.

What the FDCPA does not cover is actions by an “original creditor” (i.e., the company or person who claims you borrowed from it) unless it is pretending to be another entity. Sometimes original creditors seek to exert additional pressure on delinquent bill payers by pretending to be a debt collector, and when they do this they are not only covered by the FDCPA but also often in violation of it, since the Act prohibits deception and unfair collection methods. The Act will also not cover the actions of loan “servicers,” which are financial companies that buy debt not in default and manage it as if they had extended credit in the first place.

What It Means to Be Covered by the FDCPA or Not

As I am sure you know, the FDCPA requires and prohibits certain actions, giving you defenses and the right to counterclaim or file suit against a debt collector. If the FDCPA does not apply, you simply cannot claim any rights under it – cannot require verification, bring claims for deception or abusive conduct, or seek to enforce any other rights under the FDCPA against non-debt collectors or against debt collectors for their actions in pursuit of non-covered debt.

Making such a claim could damage your ability to defend against these debts, so you should carefully consider whether the Act applies before attempting to assert rights under it.

If your debt or bill collector is not covered under the FDCPA, that does not necessarily mean that you have no rights worth asserting. It just means that you must look somewhere else for them. Many states have their own debt collection laws, and these may apply to situations the FDCPA does not. Also, more generally, most states have laws regarding how “outrageous” a person – including a debt collector – is allowed to be.

One of the great things about the FDCPA is that it gives some specific rules – debt collectors cannot call before 8 in the morning, for example, whereas a few calls by an original creditor early in the morning will probably not be illegal. As the behavior becomes more and more extreme, however, the more likely it is to be “outrageous” enough to give you the right to sue. Threats of physical harm or police activity probably go over this line, for example; cussing you out a time or two? – maybe not. It is simply not clear what non-debt collectors are allowed to do in many instances. Courts have been pretty tolerant of some surprisingly bad or extreme actions by original creditors.