Archive | September, 2009

Should I use a Debt Settlement Company?

I am amazed at the number of people who choose to hire a debt settlement company.  I realize that you are being bombarded with advertisements that claim that they can help, but the truth is that most of these agencies are scams, or, in a better light, simply not worth the money.

The scams are quite frequent.  I have had a number of clients contact me with the same claim, that they have paid several monthly payments, sometimes up to 18 months worth,  only to find that the settlement company has done nothing or worse, gone out of business. 

Other clients contact me and say that the settlement company did help them.  When I hear that, I always dig further.  Client X called me a few months ago and told me that a debt settlement company got a $20,000 credit card debt reduced to $12,000, which he thought was a great deal.  Then I asked him about payments and he told me that he had made 19 $1000 payments to the company.  I asked him to do the math and I could see his jaw drop through the phone.  He was charged $7000 to obtain a net  $1000 reduction on his claim.  To make matters worse, we found out that they have given him bad advice on a claim that they could not settle.  (That is why he contacted me). 

He received a lawsuit from a collection agency that the debt settlement company could not settle.  The debt settlement company advised him to send a letter to the court explained his financial difficulties.  Fortunately, he contacted me before sending the letter.  Had he sent that letter, he would have lost the  case for sure.  Instead, we filed objections to the lawsuit (for a very, very small fraction of the $7000 that he was charged on the other claim) and had the claim dismissed.

If you are facing a collection agency claim, generally the last place that you want to go is to a debt settlement company.  Call my office at 412-823-8003 or 1-888-536-6644 for a free, no obligation review of your claim.

Posted in Other

What is Midland Funding?

Midland Funding is a collection agency, otherwise known as a “junk debt buyer”.  For the most part, Midland Funding buys blocks of accounts that are allegedly delinquent (in default status) from major financial institutions.  Midland then tries to collect on these accounts and if collection fails, they file lawsuits on these accounts.  As noted elsewhere on this site, these lawsuits are generally very easy to defend for an experienced consumer attorney.

The sale of delinquent accounts by financial institutions to junk debt buyers is perfectly legal in Pennsylvania, in fact, it happens on a daily basis.  Midland Funding is one of many junk debt buyers who buy accounts in Pennsylvania, and they are actually one of the larger firms doing so. 

Midland is often represented (but not always) by the law firm Mann Bracken.  Mann Bracken has a presence across PA, with offices in the eastern part of the state and in the western part as well (in Pittsburgh).

Our firm has dealt with Midland Funding and Mann Bracken on dozens of lawsuits in the last year, so we are very familiar with their cases and strategies.  If you are being pursued by Midland Funding, please give our office a call at 412-823-8003 or 1-888-536-6644 for a free consultation.

Posted in Collection Agencies, Midland Funding

Should I Pay a Collection Agency?

The phone rings and its a debt collection agency on the phone.  They are demanding that you pay off your Chase credit account from 4 years ago.  What to do?  Honestly, the answer is often that you should do nothing other than encourage them to sue you. 

In this day and age, there are 2 types of collection agencies.  The first is the agency that is working directly for the original creditor.  This type of agency is, in my opinion, a little more credible than the other type of collection agency.  The other type of collection agency what is called a “junk debt buyer”.  (LVNV, Atlantic Credit, Midland Funding, Asset Acceptance and the like are junk debt buyers).  You should almost never pay this type of agency.  The reason is that they are very easily beaten in court, at least with our office representing you. 

The only time that I consider recommending that a client pay one of these agencies is where the claim amount doesnt warrant the hiring of an attorney.  For instance, if you are being pursued for $700, it may be more cost effective to negotiate with the Collection Agency at that point than to hire an attorney for several hundred dollars on a defense.

Posted in Collection Agencies

PA Wage Garnishment Law

Can a collection agency garnish my wages?  In a word, NO!  Only under very limited circumstances does Pennsylvania law permit the garnishment of wages, and a debt owed to a collection agency is not one of them. 

Garnishment of wages is a seizure of wages while they are still in the control of the employer, and have not yet been paid out to the employee. An employee’s wages, salaries and commissions may be taken from an employer through appropriate legal procedures to satisfy five kinds of debts:

  • judgments for child or spousal support
  • PHEAA student loans
  • room and board for four weeks or less
  • back rent on a residential lease
  • obligations relating to final divorce distribution

Your wages cannot be garnished for any other purpose, including debt owed to a credit card company/collection agency. Garnishment of wages can only be accomplished only by a court order directed to the employer and no such court order can be issued without fair notice to the debtor/wage earner. Other than the kinds of debt listed above, no other debt or legal obligation can give rise to wage attachment in Pennsylvania. Federal laws such as IRS garnishment procedures may be used to garnish wages of Pennsylvania residents, but only through the federal court system

Posted in Collection Agencies, Garnishment

What happens in a debt collection lawsuit?

The lawsuit is filed, either at the District Justice or the Court of Common Pleas. If the lawsuit is filed at the local DJ, the collection agency is hoping that you do not attend the hearing, because they will then automatically win. After they obtain the judgment, they will transfer it to the Court of Common Pleas and begin execution proceedings. It is in your best interests to notify the District Justice that you are going to defend yourself immediately upon receiving the notice of the lawsuit from them. You should have an attorney represent you at that hearing, and you should not attend.  In magistrate cases, the collection agency almost never has the proper documentation to beat you in court.  They actually need you to attend so that they can question you and use your testimony against you. Have an attorney go in your place and the results should be in your favor.

If the lawsuit is filed in the Court of Common Pleas, you will receive a visit from your county Sheriff’s Department. A Deputy Sheriff will serve the paperwork on you at your home. Upon receipt of the lawsuit, you will have twenty (20) days to file a written response to the lawsuit that is called either an Answer or Preliminary Objections.

If you fail to file the written response in the allotted time, you will have a judgment entered against you without the benefit of having a hearing. As you can see, it is of the utmost importance to respond to the lawsuit immediately, to preserve your rights to defend yourself in a court of law. That is the key to beating a collection agency, i.e. to defend yourself in court, preferably with the right attorney. There are a number of issues that the collections agency must prove to obtain a judgment against you, and they typically cannot do so, again, as long as you properly defend yourself. You must force them to produce all of the documentary evidence in their claim against you, and then poke legal holes in their case.  A knowledgeable consumer attorney can file the proper responses to the lawsuit and you very likely will never end up in a courtroom.

Contact our office at 412-823-8003 or toll free at 1-888-536-6644 for a free telephone consultation if you have any questions regarding collection agency lawsuits in Pennsylvania.

Posted in Lawsuits, Other

What are my chances?

If you hire the right Attorney, your chances are excellent. An experienced attorney can often handle these types of cases in a very efficient manner, with little involvement by the client. The reason is that there are so many issues that the collection agency has to prove to prevail in a court of law, and they often have difficulty doing so.

They have to prove a number of issues in a lawsuit to collect a debt. I often tell my clients that the Collection Agency has to prove A to Z, and in fact, they have to place all of that information in the actual lawsuit.  In my experience with these cases, I have found that the agency has great difficulty in proving many of the issues that they are required to prove.

First and foremost is that they have to prove that they have the right to sue you. Did the original creditor actually sell your account to them? Prove it to me. Often times, they can’t do it. They have to prove that they acquired the right to pursue the account that you allegedly defaulted on or the lawsuit gets thrown out, right there. 

Next, they have to prove that it was your account, and that you agreed to the terms and conditions that they allege are applicable to your account. This is a big one. Further, they have to prove that you made use of the credit account, they have to prove the interest rate, they have to prove the late fees, they have to prove that the lawsuit was filed within the proper Statute of Limitations, and so on. I have found that they have a great difficulty in proving these things if you present the proper defenses in the response to the lawsuit.

Contact our office at 412-823-8003 or toll free at 1-888-536-6644 for a free telephone consultation if you are being sued by a Collection Agency in Pennsylvania.

Posted in Collection Agencies

How do I defend myself in a credit card lawsuit?

Make them prove their case, every single aspect of it. An experienced attorney can guide the way here. There are so many issues that the collection agency has to prove to prevail in a court of law. I like to tell my clients that the agency has to prove A through Z, and they often can only prove A through E.

The collection agency has to prove a number of issues in a lawsuit to collect a debt. First and foremost is that they have to prove that they have the right to sue you. Did the original creditor actually sell, or assign, your account to them? Show me the documents!

They also have to prove that it was your account, and that you agreed to the terms and conditions that they allege are applicable to your account. They also have to prove that you made use of the credit account, the interest rate, the late fees and more. Again, I force them to show me all of the documents. Most times, they cannot come up with the proper documents so we have the case dismissed.

Contact our office at 412-823-8003 or toll free at 1-888-536-6644 for a free telephone consultation if you are being sued by a Collection Agency in Pennsylvania.

Posted in Lawsuits

What is a Charge Off?

A Charge-Off is an accounting procedure used by the Credit Card Company to state that they do not believe that you are going to pay your debt. They are required by IRS regulations to report all delinquent debt (180 days past due) as a charge-off.  This allows the government to track the amounts of bad debt in our country.  Just because your account has been charged off by the credit card company does not mean that you do not owe the debt, although that is a common misconception.

A charge off typically occurs after several months of non-payment by an account holder. Each credit card company has different lengths of time at which they charge off a debt, but most range from 3 to 6 months of non-payment.  In that regard, every single claim that I handle is a charged off account.  Again, this means little to you as the consumer…it is merely an accounting term, and it has no bearing on whether you owe debt or not.

Once the account is charged off, it is at this point that the Credit Card company will begin collection proceedings against you, either by having their in-house collection department contact you, or by selling/outsourcing your account to a collection agency.

Contact our office at 412-823-8003 or toll free at 1-888-536-6644 for a free telephone consultation if you are being sued by a Collection Agency in Pennsylvania or have other questions about a charge-off.

Posted in Lawsuits

Will a Collection Agency Sue Me?

Absolutely. If you do not voluntarily pay on a debt that the collection agency alleges is due and owing, they very likely will file a lawsuit against you.  The statistics that I’ve seen indicate that 85% of consumers who are sued by collection agencies do not respond to the lawsuit.  The collection agencies know that they are going to win 85% of the time becuase the consumer does nothing.  The key to beating a collection agency is to defend yourself in court, preferably with the right attorney. There are a number of issues that the collections agency must prove to obtain a judgment against you, and they typically cannot do so, again, as long as you properly defend yourself. You must force them to produce all of the documentary evidence in their claim against you, and then poke legal holes in their case.

We defeat Collection Agencies with great frequency. Your cause is not a lost one, we can help you.

Contact our office at 412-823-8003 or toll free at 1-888-536-6644 for a free telephone consultation

Posted in Lawsuits

Is PA Wage Garnishment allowed?

Only under very limited circumstances does Pennsylvania law permit the garnishment of wages. Garnishment of wages is a seizure of wages while they are still in the control of the employer, which have not yet been paid out to the employee. An employee’s wages, salaries and commissions may be taken from an employer through appropriate legal procedures to satisfy generally five kinds of debts:

  • judgments for child or spousal support
  • PHEAA student loans
  • room and board for four weeks or less
  • back rent on a residential lease
  • obligations relating to final divorce distribution

In PA, generally, your wages cannot be garnished for any other purpose. Garnishment of wages can only be accomplished only by a court order directed to the employer and no such court order can be issued without fair notice to the debtor/wage earner. That means, in most cases, that a lawsuit has to be filed, and a judgment against you has to be issued.  Other than the kinds of debt listed above, no other debt or legal obligation can give rise to wage attachment in Pennsylvania. Federal laws such as IRS garnishment procedures may be used to garnish wages of Pennsylvania residents, but only through the federal court system.

Posted in Garnishment

Credit Card Lawsuits

If you are faced with a credit card lawsuit, whether its an original creditor or a junk debt buyer, contact my office at 412-823-8003 right away. We offer a free, no obligation review of any credit card based lawsuit that is filed in PA.

FDCPA Attorneys

Many Debt Collectors threaten people, that's a fact. Threats of wage garnishment, jail, fraud charges and contacting employers, friends and relatives happens every day to people just like you. The truth is that most of these threats are illegal. If a debt collector is threatening you, contact our office at 412-823-8003 for a free initial consultation.
Optimization WordPress Plugins & Solutions by W3 EDGE