Our best advise, obviously, is to have a consumer attorney representing your interests even at the district justice level, whether its our firm or another firm.  As we have mentioned in previous posts, collection agencies are rarely prepared to do battle at the district justice level and our chances of success are extremely high.  If you are facing a collection agency or credit card lawsuit, please contact our office at 412-823-8003 or 1-888-536-6644 for a free case review.

While we always expect a judge to agree with our reasoning, this judge went one step further.  He took action that would have a permanent effect on credit card cases in Schuylkill County, he issued a written opinion on the case.  A written opinion doesnt happen on every case.  To the contrary, written opinions are rarely issued.  A common pleas judge typically only writes an opinion where the case at hand has important issues that are recurring and can affect a number of people.  With the rise of credit card lawsuits in Pennsylvania, and in Schuylkill County in particular, this judge felt that it was important to set the law for the county.

The opinion focused on the defective nature of the lawsuit, namely, that the junk debt buyer (LVNV) didnt comply with the pleading requirements on credit card cases in Pennsylvania. The judge issued a ruling and opinion that the lawsuit was defective, and that if it was not corrected in a timely manner, it was subject to dismissal. We are hopeful that LVNV will not meet its burden on this case.  We have not only helped our client on this particular case, we have helped the wonderful consumers of Schuylkill County who are facing similar legal issues.

In a rare occurrence, the judge issued a written opinion on the case, which was reported by the courts. Typically, judges simply issue brief orders that either dismiss the case or move the case forward to trial.  The written opinion is issued where an issue continues to re-occur and the court wants to set a standard for all similar cases.  We are proud to have helped Ms. W and we are also very proud to have had a written opinion issued in our favor.  Until another opinion changes the law, our case is the standard for credit card cases in Dauphin County.

My response to that is no, you certainly don’t.  Most people do not realize this, but here’s how it works with a credit card account. You obtain a credit card from the original creditor.  Something happens and you lose your ability to pay so you go into default status. The original creditor waits up to 180 days and then charges off the account. (A charge off is simply an accounting term, it DOES NOT mean that you do not owe the money any longer). At this point, the original creditor has 2 choices.  The first is to try to collect from you by filing a lawsuit; The second is to sell the debt to a junk debt buyer or collection agency.  Often times, the original creditor chooses option 2.

When a credit card account is sold, it is sold not as an individual account, but rather, as part of a group of block of delinquent accounts. Typically, these accounts are sold for mere pennies on the dollar. A group of “good” bad debt (good defined as recently defaulted) may sell for 5 cents on the dollar. It can get sold again and again, each time at lower rates. We have seen instances where $1000 of debt has sold for .25. 

So the purchasing junk debt buyer or collection agency then files a lawsuit against you. This is where “but I owe the money” comes into play.  From my standpoint, you may owe the money to the original creditor at the time that you default. If they lend you money or extend credit to you, you do have an obligation to pay it back so you do “owe the money”. However, once you go into default and they charge it off, they have a choice to make. They can sue you or sell the account to a collection agency. If they sue, then maybe you do “owe  the money”.  But if they sell your account, then I don’t believe that you “owe the money” any longer.

Here is my reasoning. You have a credit account and are extended credit. You certainly owe the original creditor something at that point.  Once you go into default, you still “owe the money” to that creditor. I believe, however, that if they sell the account, then you no longer “owe the money” because they have received adequate compensation for you default. When they sell your account they are saying that they no longer want to deal with you and they would like to be compensated for the default. Collection Agency X comes along and gives the original creditor money for your account.  At that point, the original creditor is out of the picture. They have received what they deemed to be adequate and fair compensation for your default.  They would not have sold it otherwise, right?  So if the original creditor is adequately compensated, then you no longer “owe the money” in my opinion.

This isn’t to say that a legal interest such as a credit card account cannot be bought and sold.  Those transactions are certainly legal. I am simply looking at this from a debtor’s standpoint. If you pay anything to that collection agency, if you believe that you “owe the money” , you are simply paying pure profit to that collection agency. After all, they paid only pennies on the dollar for your account. After the first $30 or so, any money that you pay to them is pure profit.  Do you really “owe the money”?

It is illegal for any debt collector to contact a friend, neighbor, family member or anyone at your place of employment to discuss your debt with them. (They may contact one of these third parties only to locate you, if they have made reasonable efforts at finding you that were not successful). The Fair Debt Collection Practices Act (FDCPA) sets forth many rights that consumer or debtors have in regards to delinquent accounts and collection activities that take place as a result thereof.

My partner, Clay Morrow, contacted the collection agency right away and advised them of our representation of Bob and Mary. Clay advised that the activities were illegal and that we would be bringing a claim against them.  The collection agency knew that their actions were illegal so there wasn’t much of a fight. They do these things because they know that 1) these tactics are often successful and 2) that most people will not bother to consult an attorney.

Within a matter of 10 days, Clay was able to obtain the full amount of the statutory damages ($1000) plus attorney fees for Bob and Mary.  Clay was also able to settle the underlying debt with the original credit card company for a small fraction of the actual debt.  Great job Clay!

These are some of the more common threats that we see in the credit card cases lawsuits that we defend.  ALL of these threats are illegal. There is a federal law known as the Fair Debt Collection Practices Act (FDCPA for short) that makes these sorts of threats illegal. The FDCPA sets forth that these threats, and others just like them, are against the law AND it also gives you the right to sue the debt collector! Each threat or violation is a possible $1000 fine that you can recover from the collection agency AND you also can obtain your reasonable attorney fees in prosecuting the claim.

In that regard, our firm does not charge an up-front retainer when we take on FDCPA violation cases. We simply handle the case, we have the collection agency pay your claim, and we have them pay our fees as well. 

If a collection agency or debt collector makes any sort of threat to you that sounds illegal, or just plain wrong, then it probably is.  Contact our office for a free, no obligation review of your potential case.

Without fail, the courts will agree with us as to our allegation of defects in these lawsuits.  The courts generally will give Attorney Apothaker the opportunity to “cure” the defects in the lawsuit, but in my experience, his office generally has difficulty in curing the problems.  To be fair, it is not necessarily his office that has the problem, its the clients that he often represents.  These collection agencies, or junk debt buyers, simply do not have enough information to prevail against you in a court of law in most cases.

If you have been sued by Apothaker and Associates, you need to have a knowledgeable consumer attorney review the lawsuit, whether its my office or another consumer attorney.  Again, these lawsuits are generally defective, and there is a very strong possibility that they can be thrown out of court without you having to pay anything other than a small attorney fee.