Archive for the ‘Collection Defense’ Category
Old debt with new Garnishment?
Old debt with a new garnishment?
A number of people have asked how long a creditor can issue a garnishment on an old debt.
WHAT IS A GARNISHMENT?
A garnishment is a court order for a third party to turn over property that belongs to the debtor to the creditor.
What does that mean in English? Someone else is holding something that belongs to you, like for example a bank holds your money, or an employer holds wages that are owed to you. A court orders that the bank or the employer pays some or all of the money that is owed to you to the creditor.
But there is a requirement that the creditor have a judgment. A garnishment is a secondary proceeding or order after the judge lowers the hammer and says that you owe the money.
Once there is a judgment, the creditor is in control. They can do lots of things. They can request a garnishment to be issued by the court, or levy against assets, attach cars, houses. But they can attach wages or bank accounts.
The judgment has its own statute of limitations. A judgment in General District Court is good for 10 years, renewable for 10. If the judgment is recorded in Circuit Court, or originates in Circuit Court, it is good for 20 years.
But all this assumes that the judgment is valid.
How do you know if the judgment is valid? There are a number of issues,
1- Was the judgment served or did you get notice that it was pending? In Virginia, you do not need to be “served” by a process server, service is done by “nail and mail” service. They attach a copy to the front door of your last known address, and mail a copy, regular mail to your last known address.
2- Are you the named defendant? Did they sue you or someone with a similar name?
3- Was the debt within the statute of limitations?
4- Do you have a defense to the claim?
Only after you have reviewed all the factors, can you go back and attack a judgment.
What can you do with a garnishment?
There are 4 options with garnishments.
1- You can do nothing, and let the creditor collect their money through the garnishment.
2- You can try to negotiate with the creditor and either settle the debt or make payments that are better for you.
3- You can get the evidence that allows you to attack the underlying judgment, and “un-do” the judgment, and fight the debt.
4- You can always file Bankruptcy.
KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.
OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.
If you are not a Virginia Resident, click here to find a lawyer near you.
Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230
13 Collections Myths BUSTED
13 COLLECTION MYTHS BUSTED
Many people believe the common myths of collections. Most of them are myths that are as effective as an ostrich sticking its head in the sand. Don’t be an ostrich.
- 1. If I make a payment they will leave me alone.
FALSE. Usually, if you make a payment, it means that they know that you have some money, and will pay more. They will bother you more, not less.
- 2. If I make any payment at all, they cannot sue me.
FALSE. In fact, making a payment may restart an expired statute of limitations. You may make it so that if they could not sue before, they can sue now.
- 3. If I settle, it will improve my credit rating.
FALSE. If you make a payment, it may decrease your score, because there is now recent activity on a negative account. Eventually, the score may go back up, but for the short term, the score will be lower.
- 4. All debt collectors sue.
FALSE. Most debt collectors do not sue. Check to see if the debt collectors are located in your state of residence (we are talking about Virginia here), and if they are licensed as a lawyer there. If they are not licensed in your state, then they cannot sue, they cannot get a judgment, and they cannot attach your wages or bank account.
- 5. If I get sued, I can lose my house or my car.
USUALY FALSE. There are circumstances where people can lose their house or car, but those are relatively rare. Cars have an automatic exemption in Virginia for $6,000. Houses do not have an automatic exemption, but most homes do not have enough equity in them to be at risk.
- 6. If I get sued, my spouse’s wages can be garnished.
FALSE. Only you are responsible for the debts that you owe. Virginia is not a community property state, so spouses are only responsible for the debts that they sign for, or are for medically necessary expenses.
- 7. If I get sued, my spouse will be liable for my debts.
FALSE. Only you are responsible for the debts that you owe. Virginia is not a community property state, so spouses are only responsible for the debts that they sign for, or are for medically necessary expenses.
- 8. If I get sued and don’t go to court, they can’t get a judgment.
FALSE. You only are entitled to get notice and have a fair hearing. If you do not show up, then it is your problem.
- 9. If I move and don’t tell them, they can’t sue me.
FALSE. A creditor can sue and get a judgment based on service at an address you used to live at, if you do not keep them in the loop about where you live.
- 10.If they get a judgment, my entire wages can be attached.
FALSE. Under Federal law, your wages can only have 25% taken, except for certain debts, like taxes and child support.
- 11.If they get a judgment, they can take my social security money.
FALSE. Social Security Disability and Supplemental Security Income cannot be taken, even if it is in your Bank account. In fact, the Federal Regulations have been recently changed, and the bank must protect, automatically, 2 months of SSD or SSI benefits.
- 12.If I don’t pay, they can put me in jail.
FALSE. Almost all debts, including credit cards and payday loans, are civil matters, for which the failure to pay is not criminal. It is not fraud to fail to pay almost any debt. Of course, there are exceptions, for example, child support and taxes can put you in jail, and a payday loan taken on an account that was closed when you took out the loan.
- 13.If my car is repossessed, I don’t owe any more money.
FALSE. Under the laws of most states, you owe the difference between the balance of what was owed and the amount they got when they sold the car. Of course, there are some exceptions, and time limits.
KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.
If you are not a Virginia Resident, click here to find a lawyer near you.
OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.
Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230
What is the difference between being sued by an original creditor and being sued by a debt buyer?
What is the difference between being sued by an original creditor and being sued by a debt buyer?
First, lets discuss the difference between a creditor and a debt buyer.
A creditor is the original party to whom the money is owed. Examples include Capital One, CitiBank and Discover Card. When you open a credit card with Capitol One, Capitol One is the original creditor. They often will hire a lawyer to represent their interests in court. This does NOT mean that it has been sold, but that they decided not to represent themselves in court.
A debt buyer is where a creditor has sold the account to another agency, who them collects or sues. Examples here would be a debt originally owed to Wells Fargo, in which Midland Funding now owns the debt. Midland is a debt buyer. Wells Fargo is an original creditor.
Now we shall discuss what happens with a lawsuit filed by each. Note that this applies ONLY to cases that get to trial. If you default, the judge will rule against you in most cases. The exceptions are few.
A lawsuit filed by an original creditor requires that there is some showing of relationship between you and the creditor, and that you owe them money. An example is that you opened a credit card, and used the credit card, and there is still a balance due. Another example is buying on a store card. You go in to the store, buy products, and they sell them to you on credit. These might be called contracts or open accounts, depending on your jurisdiction.
A lawsuit filed by a debt buyer requires a higher level of proof. It requires everything that a creditor lawsuit requires, and proof that the debt buyer now owns the account. But the debt buyer cannot testify that you opened the account, and they cannot testify that there is a balance still owing. That would be hearsay, which is a statement (other than one made by the person while testifying at the trial or hearing) offered in evidence to prove the truth of the matter asserted. (in this case, this definition comes from Federal Rule of Evidence 801, but similar definitions can be found in most states rules of evidence or case law.)
So somehow, the plaintiff must prove that you opened the account, and left a balance. And then they must prove that they bought that account. All without using hearsay.
KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.
If you are not a Virginia Resident, click here to find a lawyer near you.
OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.
Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd. Suite 102
Richmond, VA 23230
Joint Accounts and Garnishment
What happens when a creditor has a judgment and you have a joint bank account?
The creditor can issue a garnishment (seizure order) to the bank, and freeze all of the money. A separate notice is then sent to the other account holder. They then have the opportunity to come to court and claim that some or all of the money in the account is theirs.
In order to do so, they must come with 2 or 3 months of statements, and proof of the source of the deposits. For example, they need to bring pay advices showing that they are the one who deposited amount X on date Y.
If the joint account holder does not show up in court, the judgment creditor gets the benefit of the doubt, and gets all of the money.
One of the first things we always ask is how did the case get this far. Sometimes there are things we can do to alleviate the problem. Sometimes we will recommend Bankruptcy.
KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.
OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.
DISCLOSURE: Pursuant to Federal law, KCLS is a debt relief agency. We help people, who need those services, to file for Bankruptcy, if there is no other option.
If you are not a Virginia Resident, click here to find a lawyer near you.
Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd. Suite 102
Richmond, VA 23230
Car Repoed? You may not need Bankruptcy.
Everyone knows that you have to pay for the products that you purchase. Some you pay for with cash (or cash equivalent- checks, debit cards, etc). Some you pay for with credit- credit cards, loans, etc.
The “story” of a cash purchase ends there. You have paid for it, it is yours.
The “story” of a purchase made with credit does not end there. If you don’t pay the lender back, they have the right to repossess the thing you bought. The most common examples are cars and houses. Theoretically, your credit card purchases at Best Buy are in the same category, but not always.
In the case of a car loan, there are specific rules the lender must follow. These rules are governed by Virginia Code’s version of Revised Article 9 of the Uniform Commercial Code, codified at VA Code sections 8.9A-100 through 8.9A-709.
When a car loan is defaulted, they have the right to repossess, but they must give you certain notices. They must tell you that they are going to sell the car, and how long you have to get the car out of “hock”. They must tell you that if the car is sold, that you will be responsible for any short fall (“Deficiency balance”), and that if there is an overage (“Surplus balance”) that you will get that amount back (surpluses are very rare). After they sell the car, they must send you an accounting, and tell you how much the deficiency or surplus balance is.
If they don’t there are 2 consequences. The first is the one that is most important- you are not responsible for any deficiency. The second is that you have the right to sue them for the entire amount of the interest charge, plus 10% of the principal. VA Code 8.9A-625[c]. You are not entitled to attorney fees and costs.
This includes when a car dealer sells a car, and fails to obtain financing. The Virginia Supreme Court recently held Victory Nissan of Chesapeake to that in Cappo Management V, Inc. v. Britt., and awarded damages to Ms. Britt.
This is common in yo-yo sales. If you are the victim of this kind of abuse, you do not need to file for Bankruptcy protection. Let us help turn the tables on the collectors for you.
KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.
OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.
If you are not a Virginia Resident, click here to find a lawyer near you.
Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd. Suite 102
Richmond, VA 23230