Stop Debt Collectors in Virginia

Posts Tagged ‘Collection’

Last time I talked about how to deal with collectors, and I mentioned an order of payment. Here is why the order is important.  The order, from last time, is: 1- Food, 2- car and house payment, 3- Utilities, 4- Current bills, and 5- Luxury expenses.

The food always comes first in the order of payment.  If there is no food, the reason for a house, a car, utilities, credit card payment, etc is pointless.

The house and car payments come next.  It is much easier for a lawyer to fix the problem of unsecured debt (debt where there is no right to repossess a thing), than a secured debt.  Your secured creditors are hard to solve, often requiring that you make deals to pay them much more than you ordinarily would.  Unsecured creditors will often settle for pennies on the dollar, over long periods of time, because payments to them are so much more tenuous.  You can have defenses, or file Bankruptcy, or just not pay, and there is often very little they can do.

The utilities and taxes come next.  The utilities will cut you off, and the tax man will come get things, but neither of those things happens quickly.

Then comes the unsecured bills- the medical bills, the credit cards, etc.  When they get paid it will be good enough.

Lastly comes the luxury expenses- vacation, jewelry, etc.  If you are able to pay all of your other bills, then there may be money left in your budget for luxury goods and services.  They are not things that you need, but might want.  Instead of a vacation, try a stay-cation.  You get the time off, but not the expense of travel.  Instead of expensive jewelry, try costume jewelry.  You get some of the look, but not the expense.

Consult a lawyer and maybe a financial planner.  You need to know your rights, and how to get out of this mess.  Above all, don’t play ostrich. Sticking your head in the sand and saying “I can’t see you” will not make the problem go away.

If you have been impacted by anything we mentioned here, please make an appointment to see us.

NO FEE IN YOUR FDCPA CASE UNLESS WE RECOVER!!

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 LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

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 happens to my court fines or orders of restitution when I file for Bankruptcy?

A fine is a criminal penalty payable to a municipality, like a county or city, or the court system.  It happens when you are punished. Examples here are speeding, reckless driving, assault and battery.

Restitution is part of a criminal case, in which you have to pay someone back.  Examples of cases where you would have restitution would be stealing or embezzlement.  In those cases, the judge may sentence you to jail and tell you that you have to pay someone back for the money you took.  You may also have to pay a fine to the court.

If you owe money to a person or company, because you did something wrong, or because you broke a promise, that is a debt, not a fine.  Examples here are car wrecks, credit cards, even after you go to court, and deficiencies for car loans.

What happens to them? Well, that depends on what kind of Bankruptcy you filed.

If you filed a Chapter 7 or Liquidation Bankruptcy, then the court fines and orders of restitution are unaffected by your Bankruptcy.  They continue on along just the same as if you had never filed for Bankruptcy.  If you do not pay, they can suspend your license, or put you in jail for contempt.

If you filed a Chapter 13, the effect on your fines and restitution is interesting.  Because fines and restitution are not dischargeable in bankruptcy, they can be paid over time in your Chapter 13 Bankruptcy.  It is important to know that any amount that is not paid will not be discharged, even if they do not file any request to determine that it is so.

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.

KCLS is a debt relief agency.  We help people file for Bankruptcy.

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

Dealing with debt collectors

People often ask how to deal with a debt collector.  Here are some simple rules that will help control the situation.

1.  Pay your bills if you can. The easiest way to deal with a debt collector is to not need to- that is, pay your bills on time every month. By the way, this also means that your credit score will be as high as it can be in your situation.  (there is more  to a credit score than payment history, but history is the biggest part).

2. Talk to the lender before you miss payments.  If you fall behind on your bills, it is often easier to deal directly with the creditor to help you fix the situation than if the account is turned over for collections, so as soon as you realize you are going to have a problem, contact the lender. Sometimes they will work with you, sometimes they will not.

3. Prioritize your debts. If you have tried dealing with the lender, the next thing to do is prioritize who gets paid first, and who gets paid last.  I will talk about why this is the order next week.

a. Food comes first. If you don’t have enough money for food, then no one gets anything.  Don’t be ashamed to apply for food stamps (called SNAP) and other government assistance.

b. Your car and home payments come second. This does not include second homes, second cars, etc, but does include the payment on your first and second mortgage on your home.  These assets are important, because you need a roof over your head, and a way to get to work.

c. Utilities (lights, water, gas) come third. It is much easier to maintain your ability to have a roof, and a car if there is heat and air conditioning, water, etc.

d. Current bills.  Medical bills, credit cards, store cards, etc.

e. Luxury expenses.  Vacations, jewelry, etc.  If you are paying for these things, you should be paying all of your bills. If you are not paying all of your bills, you should not spend money on luxury expenses.

4. Reduce your expenses. This is much more important for a long term problem than a short term issue.  If you are out of work, but going back, conserve your cash, and keep going. If you are at a new, lower paying job, reducing your expenses is much more important.  Downsize your house, downgrade the car.  You need to look for a less expensive solution.

5. Communicate with the debt collectors.  That first call or letter will not be the last if you don’t respond.  Request verification of the debt. Start with making sure they are collecting an account that you owe.  Dealing with a mistaken identity or ID theft is different from dealing with your own accounts. Verify the amounts they are requesting.

6. Consult a lawyer and maybe a financial planner.  You need to know your rights, and how to get out of this mess.  Above all, don’t play ostrich. Sticking your head in the sand and saying I can’t see you will not make the problem go away.

If you have been impacted by anything we mentioned here, please make an appointment to see us.

NO FEE IN YOUR FDCPA CASE UNLESS WE RECOVER!!

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 LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or
party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

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

One of my friends is a debt collector, and I asked him what advice he would give to his mother for how to deal with a debt collector. Here is what he said.  First, the best way is to never need to deal with them, by paying your bills, but if you are forced into a situation where you must, here is what you should do.

1.  Talk with the collectors.  Ostrich technique does not work with debt collectors, they tend to get more aggressive, and eventually sue.  That first call or letter will not be the last if you don’t respond.  Request verification of the debt.  Start with making sure they are collecting an account that you owe.  Dealing with a mistaken identity or ID theft is different from dealing with your own accounts. Verify the amounts they are requesting.

My comments: I agree, but with a variation.  You should communicate in writing.  It makes the record so much clearer.

2. There may be tax consequences if you settle a debt, rather than pay the full balance.  Debt collectors cannot give tax advice, and if they write down the debt by more than $600, they are required to send a 1099 to the IRS, and you could pay taxes on the money.

My comments: Yes, that is true, but if you are going to compromise a debt, tax consequences should be discussed with the collector before the deal is inked.  Some collectors have authority to discuss tax consequences, some do not.  Be on the lookout for a 1099 for the entire balance, or the forgiven balance, as this is not correct.  You should not pay taxes on the interest, only the principal. Consult a tax professional for the details on that.

3. If you have problems, complain to the Federal Trade Commission customer service hotline.

My comment: And the Attorney General of the US, the Attorney General of your state, and you should find a lawyer who deals in collection abuse, like us.

4. Request a supervisor.  If you are trying to pay, but the collector on the phone cannot make the deal you can afford, request a supervisor, who may be able to make a better deal.

My comment: If you cannot make a deal pretty quickly on the phone, you should not be talking to them on the phone. It is pretty rare that a supervisor can make a deal that a line collector cannot, and they often are just another line collector on the phone anyway.  Better to send them a letter that says that you request no more phone calls, and that all communications should be in writing. Better still is a letter telling them to communicate with your lawyer.

If you have been impacted by anything we mentioned here, please make an appointment to see us.

NO FEE IN YOUR FDCPA CASE UNLESS WE RECOVER!!

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 LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

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

There is a recent Virginia Supreme Court opinion that says that the ability to bring a lawsuit, “standing”, must be in existence at the time the lawsuit is filed.  In Kocher v. Campbell, the plaintiff had been in a car wreck in 2004, filed Bankruptcy in 2005, and not listed the asset of the potential personal injury claim in his Bankruptcy.  He eventually voluntarily dismissed the lawsuit, then reopened his Bankruptcy to  show the asset of the personal injury claim.  Before the trustee abandoned the PI claim (personal injury money is exempt in Virginia pursuant to Virginia code 34-28.1), the plaintiff filed suit again.  However, because he still did not have the right to bring the claim (because the trustee had not abandoned the claim) he was not the right party—he did not have “standing”. The Virginia Supreme Court ruled that the lawsuit, when brought by someone who does not have the right to bring a lawsuit- because they are not the right party- the lawsuit is a legal  nullity—it does not exist.  You can read about the case here.

What is the lesson we should learn from this?  That EVERYTHING that you MIGHT have a right to—car accidents proceeds, inheritance, wrongful death proceeds, ANYTHING, must be disclosed to your lawyer when you are filing for Bankruptcy.  This plaintiff lost the right to get anything out of that lawsuit because he did not have the right to bring it.

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

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

The Fair Credit Reporting Act is designed to protect consumers from inaccurate or outdated information on credit reports. But there is a more insidious problem looming.

Tax Return ID Theft is on the rise.  Yahoo News has a story about how it is getting bigger.

Tax Return ID Theft is when someone else uses your social security number and other personal identifiers to work or obtain other government benefits.  Usually this is done by an illegal alien, who needs your personal information to give to an employer so they can work.

To combat this growing scourge, it is important for you to safeguard your information and documents. Just as the advertisements suggest, you should destroy documents with your full social security number rather than just throw them away.  You are even better protected by not disposing of them at all.

If you are the victim of tax return fraud, you should contact the IRS, and send in a Tax Form 14039, a tax ID theft Affidavit.  This will help some in your efforts to control the damage.

But you should also be checking your credit file. Identity thieves rarely limit themselves to just your work records.  You should be ordering your consumer disclosures from the 3 national credit reporting agencies. You can do this by mail, or phone.  Download the form for requesting your credit report by mail, or call the central number for ordering by phone-  877-322-8228.

NO FEE IN YOUR FCRA CASE UNLESS WE RECOVER!!

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 LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

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

It is legal to record phone calls, but we advise that you do not, and we suggest that this article is a good starting point on why not.

A summary of Herring and Watts article is that in some states where collectors operate, it is illegal to record without the consent of all parties, and it is not strictly necessary- your testimony is admissible.

Virginia law is that any party to a conversation may record.  VA Code §19.2-62.

Federal law is that any party to a conversation may record.  18 U.S.C. §2511.

There are 10 states that require that all parties to a conversation must consent, or the recording is criminal.  California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Pennsylvania, and Washington each require the consent of all parties to record.  The balance allow anyone who is a party to the conversation to record.

In ALL states and by Federal law, recording a conversation that you are not a party to (eg: recording your next door neighbor’s conversation) is criminal.  There are exceptions in criminal justice, when the government obtains a warrant for a wiretap, but generally, it is illegal.

It is often very difficult to determine what state the collector is located.  Further, even if you are located in a 1 party state, and they are located in a 2 party state, the question then becomes what law applies.

As a result, we agree with Herring and Watts, and say that even though it is legal, we advise that you should not record your conversations. In the event that you do record, we advise that you disclose that you are recording, and tell the collector that by staying on the phone that they are consenting to being recorded.

Your notes of a call are perfectly good records of what happened.  Here is a link to a form for tracking calls, and making notes of what happened.

Also, you can have other people listen to your side of the conversation, or even participate in the conversation.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FDCPA CASE UNLESS WE RECOVER!!

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 LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

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

A potential client called today, and complained that he had hired a lawyer to do some work for him, and that the lawyer was now suing him for his fees.

He complained, not because the attorney was suing for his fees (there are some lawyers who do this, even though this is discouraged),  but because the lawyer had not played fair in suing him.  Apparently, the lawyer had sued, and then sued again, and the potential had not gotten served properly, but the lawyer had taken judgment against him.  The potential was very upset, and contacted the lawyer, and made payment arrangements, and made some of the payments.  Then he checked his credit report, and discovered that the lawyer had gotten a judgment, and the judgment was on his credit report.  So he called, and communicated with the lawyer, and the lawyer had stated he would take care of it.  Then it appears, he marked the judgment satisfied.  But the client was unhappy, and he refused to pay any more.  So the lawyer sued again.

I turned this case down. The lawyer was collecting a debt owed to him.  One of the important features of the Fair Debt Collection Practices Act is that it only covers third party collectors.  That means that although lawyers are covered when they are collecting money owed to someone else, if the money is originally owed to them (for example for fees earned), they are not debt collectors, and not subject to the act.

Remember, if you are being harassed by a debt collector, you need to know your rights. But remember that they have very powerful options, too.  Virginia has very limited consumer rights.  Most of the rights are given to creditors.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FDCPA CASE UNLESS WE RECOVER!!

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 LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

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

Attorney debt collectors are not exempt from the law just because they are lawyers. They actually have a slightly higher standard of care that they must engage in to comply with the law.  They must make sure that what they do to collect not only complies with the rules of collection, but also the rules of ethics.

The statute of limitations is a rule that sets the time for a someone to sue to collect. It is not a time limit to collect, or garnish, or take other collection activities, but to file the lawsuit.  And the time varies from jurisdiction to jurisdiction and circumstance to circumstance.  The time to sue on a credit card in Virginia is different from the time to sue on a defaulted car note in California.  Beyond that time, the debt is barred by the statute of limitations.

The Fair Debt Collection Practices Act prohibits misrepresenting the amount, character or legal status of a debt in an effort to collect on that debt.

But on a regular basis, they do sue on debts that are time barred.  For example, in this article, National Credit Adjusters threatened to sue on time barred debt. Here is another article on time barred debt.

When they sue, they are representing to you and the court that they have the legal right to sue.  That the time has not passed.  But if it has passed, they are making a false representation.

It is not unethical to sue on a time barred debt in Virginia.  Do not make the mistake of making a complaint to the state bar.  This is because in Virginia, the statute of limitations is an affirmative defense.  That means that YOU must bring it up to be an effective bar against collection.

Krumbein Consumer Legal Services, Inc., is happy to help consumers who have been impacted by debt collection attorneys who have sued after the expiration of the time to sue.  The facts and law vary from case to case, so it is important to contact a lawyer before the gavel falls, so if you are sued in Virginia, make an appointment to see us soon.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FDCPA CASE UNLESS WE RECOVER!!

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 LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

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