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Discovery – Starting to Win your Case

It is not necessary to begin discovery at the time you file your Answer and Counterclaim, but if it is at all possible for you to do, it gives you a big advantage.

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Push or Be Pushed – Get that Discovery Started

In the law, it is push or be pushed. That is, if you aren’t already pushing the debt collector to give you discovery or respond to motions, chances are good that they will be giving you things to do. When you’re pushing them, your chances of winning go way up. When they’re pushing you, they go down.

You might not think it would have to be that way. There’s usually plenty of time given to do everything that needs to be done and that the law expects both sides to do things at basically the same time. But theory aside, the reality is that people – lawyers included – will usually do what is pressing them first. And then they may – or may not – do the rest of what they should do.

People in general, and lawyers especially, make sure they’re pretty close to being as busy as they can be. And this inevitably means that choices will have to be made when and if things get tighter. If you push the debt collectors to answer your discovery, in other words, they very well may choose to skip discovery on you. If you skip discovery on them, you will soon discovery they have plenty enough time to keep you busy. That’s just the way things work.

So if you’re in a case where they’ve already served discovery on you, you’re going to have to do double duty – make sure you serve your discovery on them before you give them your answers. If you don’t, the next thing you know they’ll be filing a motion for summary judgment against you.

Better yet, make sure you are first out the discovery gate – and then keep tightening the screws. Serve discovery on them along with your Answer. This requires you to be prepared for your case pretty quickly, but it will pay off in a big way down the line.

If they File a Motion for Summary Judgment

“Do I need to respond to their Motion for Summary Judgment or can I file a motion to dismiss at this point?”

I received this question in a teleconference, and it brings up three extremely important issues that every person defending himself or herself from debt collectors needs to keep in mind. First, the comparative functions of a Motion to Dismiss and Motion for Summary Judgment. Second and more generally, the importance of responding to every motion or action taken by the debt collectors, and third, still more generally, the level of effort you need to put into your defense. Here’s the whole question as it was asked:

I requested discovery and responded. A few weeks later, they filed a motion for summary judgment with an affidavit for indebtedness (which was not included in their discovery), a bill of sale and assignment (which does not include any amounts or any account information), and a copy of a 2008 card statement. Do I need to respond to their Motion for Summary Judgment? Or can I I file a Motion to Dismiss at this point?

Motions to Dismiss vs. Motions for Summary Judgment

There is a lot of confusion about motions to dismiss and motions for summary judgment, even among some experienced lawyers. To put it very simply, regardless of what a party filing a motion calls it, if the motion makes reference to, or depends in any way for its outcome, on matters other than the pleadings, the motion is to be considered a motion for summary judgment. That means the motion should follow the rules regarding motions for summary judgment, and you have the time permitted by the rules for summary judgments (generally longer) rather than responding to motions to dismiss (generally shorter).

The pleadings consist of the Petition, Answer, Counterclaim and Reply to Counterclaim. For brief videos discussing each type of motion, see “Motions to Dismiss” and “Motions for Summary Judgment.”

If there is any important fact in the motion that is not also in one of the pleadings, the motion should be treated as a motion for summary judgment. Thus a motion to dismiss is not the correct motion to file when the other side files a motion depending on undisclosed discovery or when the only evidence it provides in discovery would not be enough to prove its case.In this case, where the debt collector has already filed a motion for summary judgment, you must respond in opposition to their motion for summary judgment and, in the same response, file a “cross-motion” for summary judgment.

The Need to Respond

Whenever the debt collector files a motion of any sort you need to respond to it.

Theoretically, if you filed a motion to dismiss, the court might look at your motion first, decide that the debt collector has no case, and dismiss the action as a whole. That would be easy and convenient for you. There’s too good a chance, however, that the judge will consider his or her convenience before considering yours. In fact, you should take that as a given – as something that will definitely happen. You should expect the judge to rule on the easiest thing available and skip everything else – and what’s easier than an uncontested motion? Therefore you must oppose any motion the other side files. In my opinion this is especially important when you’re a “little guy” taking on a “bigger guy.” The courts are – often if not always – prejudiced in favor of the big guy, and you cannot afford to leave an “easy out.”

Level of Effort

I am often asked variations on, “should I go ahead and… ‘X’ or wait until… ‘Y’ happens?” Should you ever wait for either the other side to take some action or for the court to rule on something? Generally, NO. There are two reasons for this: time is always limited; and it is important to keep the initiative in litigation as much as possible.

Time Is Limited

Whether or not the court enters a “scheduling order” explicitly stating when things are due, every case is on a “time clock.” You cannot waste time. Judges will often wait until a few days before the time set for trial to rule on motions for summary judgment. I do not know why this is so – but it is simply a fact, and so it means that much of trial preparation, motions, discovery and all the rest, are conducted after a motion to dismiss or for summary judgment has been filed. You simply cannot wait for a court ruling.

Waiting for the other side is much the same. Litigants are always looking for advantages, and if they get the sense that you are going to wait for them, the debt collector will very likely take advantage of that fact. They may simply delay until you have no more time to do what you need to do, or they may delay until they have time to serve discovery on you – or take some other action which takes control of the case.

Keep the Initiative

Keeping the initiative is extremely important in litigation. It is discouraging to them, and encouraging to you, to be “calling the shots.” When you do, you can take the time you need to figure things out, you can think strategically rather than reactively, and you open up a long, weary path for the other side. When you keep working, you show the other side that continuing to chase you will be expensive, risky and… annoying. You heighten their sense that they should be spending their time chasing easier victims – or should find something actually good to do with their time (maybe, eventually). And finally as you spend effort on your case you support your own morale and you learn more about your case and the law.

Conclusion

For all these reasons, you should take what Tony Robbins calls “massive action.” You should take every action you can to achieve your victory. Let the other side consider how much it is costing in time and money to respond to you. If they get the sense you’re thinking that way they are much more likely to drop your case and look for greener pastures.

Garnishment and other collection methods

Garnishment of Assets – Can they Take your Wages or Bank Account?

Can your wages be garnished by a debt collector? What about bank accounts? Here are some things you need to know about garnishment.

If you have assets, and this includes either a job or money in the bank, you must be concerned about the possibility of being garnished if a debt collector (or anybody else) has a judgment against you.

Bank Accounts

Bank accounts can be garnished and, when they are, it is almost always a surprise to the debtor. What typically happens is collectors obtain money judgments (usually by default) and then use the judgment to freeze the funds in your bank account. State law and banking rules govern how the bank must handle the garnishment process. Collectors always notify the bank first and then notify the debtor. This way your funds are frozen before you can take any action such as withdrawing all your funds.

Their notifying the bank first is perfectly legal. You typically receive the notice (including your rights) a day or two after your funds have been frozen. In most states, the garnishment can not only freeze funds already in your account at the time of service on the financial institution, but can also reach funds that get put in the bank afterward, for a time.

During the time the garnishment is in effect, the financial institution will not honor checks or other orders for the payment of money drawn against your account. This means any outstanding checks will more than likely bounce or be returned for NSF. The exception to this rule is if your account has more on deposit than the amount of the garnishment. In this case, the bank can honor checks up to the amount that will reduce your funds below the amount of the garnishment. When the amount being garnished is paid, the freeze on your account must be terminated.

Wages

Wages can also be garnished, and, again, your first notice that you are being garnished is likely to be when you receive a check that is less than you thought it would be. Federal law limits the maximum amount that can be garnished by one or more garnishment orders to 25 percent of your disposable earnings for that week, or the amount by which disposable earnings for that week exceed thirty times the Federal minimum hourly wage, whichever is less. In simple terms, “disposable income” is whatever money you have left after paying all required taxes and national insurances!

Disposable income is after-tax income that is officially calculated as the difference between personal income and personal tax and nontax payments. In general terms, personal tax and nontax payments are about 15% of personal income, which makes disposable personal income about 85% of personal income.

IMPORTANT: In order for wages to be garnished, disposable earnings per week must exceed thirty times the federal minimum hourly wage or $154.50. Put another way, if you make $154.50 or less per week your wages cannot be garnished – for now and as long as you don’t make any more than that. Also – Social Security and some other types of disability or retirement income are protected from collection.

There are also important state rules regarding garnishment, and if you are garnished, or if you bank account is seized (especially), your first move should be to look at the state laws on garnishment and see if an exemption applies to you. They often will.

But You Should Not Let them Get a Judgment

All of the above being said, you will almost always be much better off it you can avoid letting them get a judgment against you. Things could get better for you in any number of ways. Just because things seem bleak now doesn’t mean that the sun won’t eventually shine. And it isn’t all that hard to keep them from getting a judgment if you know what you’re doing.

If you want help fighting the debt collectors, you should consider our new FastTrack Membership. Go here for more information on debt collection and defense, and how we can help you. We can also help you overcome a default judgment.