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Archive | October, 2009

The Garnishment Threat

The collection agency calls and says that you better pay up.  If you don’t pay, then we’ll garnish your wages.  Believe it or not, that can be a great phone call to receive if you live in Pennsylvania.

This is a common threat that is issued by the collection agencies and junk debt buyers.  It works very well for them because nobody wants their wages to be garnished.  Unfortunately, it is also an illegal threat.

Pennsylvania is one of the few states that do not allow creditors to  garnish wages.  If you live in PA and you work in PA, there is no exception, at least not when a collection agency or credit card company is involved.  The only time that a creditor can garnish wages on a credit card claim in Pennsylvania is when they’ve properly sued you in another state and obtained a proper judgment, then transferred that judgment in to PA.

Regarding the threat, as I said above, it is illegal.  There is a federal law known as the Fair Debt Collection Practices Act (FDCPA for short) that protect consumers.  One of the main components of this law is that a debt collector cannot make a threat that it cannot follow through on, or it can’t make a threat that is illegal.  Since wage garnishment is not permissible, by law, in Pennsylvania, making such a threat is illegal.

The FDCPA gives you the right to file a lawsuit against a debt collector that makes this sort of illegal threat.  There is a statutory $1000 damage penalty, along with an imposition of reasonable attorney fees.  In that regard, your attorney is free.

Call our office if you have been threatened with wage garnishment in Pennsylvania.

Posted in Collection Agencies, Garnishment, Lawsuits

Strike a Deal?

An individual sent me an email today asking whether they should still respond to a lawsuit filed by a collection agency.  The individual explained that they had reached an agreement with the collection agency on a payment plan.

My first response was to  tell the individual that they had made a huge mistake in agreeing to pay the collection agency anything.  Typically, as you will see from any of myother posts, a collection agency has a difficult time in proving a  case against you in a court of law in Pennsylvania. 

My second response was that if they are going to continue on with the proposed settlement, making their mistake even larger, then they should absolutely file a written response to the lawsuit.  An agreement with a collection agency is pretty meaningless unless you have it spelled out specifically inwriting.  I would never trust an oral agreement with a collection agency, ever.  If you fail to file your response to the lawsuit, the agency most likely will simply enter a default judgment against you for the full amount of the alleged debt, often with an inclusion of their attorney fees.  If you do “strike a deal” with a collection agency, (which again is a huge mistake) then at least get it in writing.

Posted in Collection Agencies, Lawsuits

Debt Negotiation in Pennsylvania

I get  many inquiries from potential clients who want me to assist them with debt negotiation.  I will only negotiate a debt under very limited circumstances. 

The first circumstance where I will negotiate a debt is when the Plaintiff (the company that is suing you) is an original creditor.  An original creditor is the finance company that you established your credit account with.  Capital One files alot of their own lawsuits in Pennsylvania, so most times  I am open to negotiation for a client on a Capital One case. 

Negotiation really works best when you have a lump sum of money to offer as a settlement.  For instance, if you owe an alleged $10,000 debt, if you can offer $5000 or $6000 as a lump sum, then you have a shot at obtaining a settlement.  On the other hand, if you can only afford to pay $100 per month, a negotiation is not going to get much of a reduction for you, if any.

I also would consider negotiating with a collection agency on a very small case, perhaps under $1,000.  While my steadfast rule is to never negotiate with collection agencies, there is a reason that I would negotiate on this small amount.  Quite frankly, its more cost effective for the client to pay me an hour’s worth of fees to negotiate a settlement on a small case rather than to hire me to defend it in court for several hours of time.  

On larger claims, let’s say $1000 and up, I would almost never negotiate with a collection agency in Pennsylvania.  Hire me to defend the lawsuit, or, hire another attorney if that’s your choosing, but it would be money well spent.  A knowledgeable consumer attorney can defeat a collecton agency about 85% of the time, perhaps better, so you really should take your chances in court.

If you have any questions about debt negotiation, credit card accounts, collection agencies, or any other consumer matter, please contact my office at 412-823-8003 or 1-888-536-6644 for a free,  no obligation consultation.

Posted in CC Companies, Collection Agencies, Lawsuits

Can a Collection Agency legally buy my account?

I get asked this question alot and the truth of the matter is Yes, a collection agency can buy a delinquent account from a credit card company.  An account, of any sort, is a “legal interest” in something.  Any legal interest can be sold at any time, for any price.

It’s actually a good thing when your account is sold to a junk debt buyer.  Generally, the only things that the debt buyer acquires are your name, phone number, account number and the amount that is alleged due and owing.  That’s it!  How can they prove a case against you in a Pennsylvania court of law when they don’t have the documentation to back it up?  Most times, they can’t (as long as you file the proper response to the lawsuit and have the right legal representation). 

In further discussing the purchase of an account, there is a burden on the collection agency to prove that they actually purchased your specific account.  This purchase is often called an assignment.  Without this proof, the collecton agency does not have standing to move forward with a lawsuit.  Standing is generally defined as the legal right to sue someone. 

These agencies often have difficulty in establishing standing in these matters because they purchase so many accounts at one time.  I have never seen a collection agency purchase an individual creditor’s account one at a time.  Instead, they purchase these account in bulk, by blocks of money.  For example, maybe they purchase $2,000,000 of delinquent accounts for $40,000.  There could be 10,000 accounts in that sale, and its not feasible for the collection agency to include that list in every lawsuit that it files.  Our argument, which has been successful, is that they cannot prove standing without providing that list. 

If you would like a free, no obligation consultation on a credit card or collection agency matter, please call my office at 412-823-8003 or 1-888-536-6644.

Posted in Collection Agencies

Do I need an Attorney?

I am very surprised by the number of people who don’t consult with a consumer attorney on a credit card case.  As soon as you receive a collection letter or phone call, you should speak to a consumer attorney right away.  Most of us, my office specifically, will give a free telephone consultation about the collection process and to discuss your defenses and rights. 

I have found that many of you instead call the collection agency to try to work out a payment plan.  What a huge mistake!  That is exactly what they want you to do, its part of what they base their business model on! The truth of the matter is that most collection agencies have difficulty in proving a case against you in a court of law.  That’s why they call you and use high pressure tactics to get you to pay.  Once you make a payment, or even agree to one, you may have severely damaged your case.

A frequent question that I face is whether the individual can handle the matter themselves.  I almost never think that this is a good idea.  They ask, what can I do that they can’t?  Think about it, I do this every day, with tremendous success.  I usually know exactly what language is in your lawsuit without even seeing it just by learning the name of the collection agency.  I know which attorneys they hire, how those attorneys operate, which documents they have, their usual success rate and so on.  Are you willing to risk a $9000 judgment against you just to save a few dollars in attorney fees?  It doesn’t make sense to me.  Look, I try to be as blunt as I can with clients, they really do appreciate it.  I’ll tell you if I can help you and I’ll also tell you if it’s in your interests to go another direction.  (I often do this with the smaller cases, where it doesn’t make sense to hire me to defend a $750 lawsuit).

The key is to not make a mistake by calling the agency or by filing your own response to the credit card lawsuit.  That’s my job, to handle that aspect of it and to give you a good result at the end.

If you have any questions about a collection agency or credit card lawsuit in Pennsylvania, call my office at 412-823-8003 for a free, no obligation consultation.

Posted in Lawsuits

Atlantic Credit and Finance

Atlantic Credit and Finance is one of the largest Junk Debt Buyers that operate in Pennsylvania.  A junk debt buyer is a company, often a collection agency, that purchases allegedly delinquent accounts from banks, credit card companies, and other institutions that extend credit.  They purchase these accounts in bulk, often for mere pennies on the dollar.  Our estimation is that they average around 3 cents per dollar on a purchase. 

Atlantic Credit, in my estimation, files about 50 or so lawsuits per week across PA.  Although they use other law firms, for the most part they use David Apothaker and Associates, a New Jersey law firm, to handle their PA collection matters.  In my experience, Attorney Apothaker’s office has been very cordial to deal with. 

Atlantic Credit typically makes oral or written attempts to collect on these cases before filing a lawsuit.  If you receive a phone call or letter from Atlantic Credit or their attorney, please contact my office right away for a free consultation.  I can explain the process to you and guide you along the way.  I would almost never recommend a negotiation on the claim at this point as it is definitely NOT in your best interests.

Eventually, a lawsuit will come.  Believe it or not, you actually want Atlantic to sue you.  The lawsuits generally are easily defended (though we don’t win every case, we do have an extremely high success rate) and will allow you to move forward with the restoration of your credit. 

Call our office at 412-823-8003 or 1-888-536-6644 for a free, no obligation consultation on your Atlantic Credit matter.

Posted in Atlantic Credit, Collection Agencies

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.