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Archive | Lawsuits

Sued by LVNV Funding – Who Are They?

The Sheriff knocks at your door or you receive a certified letter and find that a lawsuit has been filed against you by LVNV Funding.  Your first thought should be… who is LVNV, I’ve never heard of them?

LVNV Funding is a junk debt buyer.  They are a subsidiary of a very large debt collection/buyer called Sherman Originators.  This is a company that buys delinquent credit card accounts, often 5,000 to 10,000 accounts, for pennies on the dollar.  Yes, that’s right, they purchase credit card accounts that are in default.  This is perfectly legal in any state in the U.S.  The statistics change, but it appears that these companies pay between 1.5 and 3.5 cents on the dollar to purchase these accounts… that’s pretty cheap if you ask me.  I’d like to purchase almost anything for 2 cents on the dollar.

Why do they purchase delinquent credit card accounts like yours?  Well, to make a profit, of course.  When they buy an account, they get to “step into the shoes” of the original creditor.  That is, they are allowed to try to collect the entire amount from you.  If you pay them, they make a HUGE profit on their expenditure.   Let’s say that you have a $5000 credit card debt with Chase.  You default, likely because you have a health problem, divorce, or job loss.  Chase doesn’t want to sue you so they sell the debt to LVNV.  LVNV then sues you.  You now happen to be back on your feet so you think about paying the debt.  If you do pay the $5000, remember, LVNV has only paid about $100 to acquire that claim. That is a very large profit, wouldn’t you agree?

The truth of the matter is that its a numbers game for LVNV.  They know that about 8o% of the people whom they sue will either roll over and pay the bill, OR, will put their head in the sand and do nothing.  Right off the bat, LVNV wins 80% of the time.  Of the remaining 20%, LVNV knows that a little more than half will try to defend themselves (this is a big mistake).  So now LVNV has won 90% of the time that it files a claim.  Less than 10% of the people who are sued by LVNV actually hire an attorney.  (Make sure that don’t just hire any old attorney, hire a Consumer Attorney).

LVNV Funding uses a few large collection firms to handle their cases in Pennsylvania.  Currently, they are using Apothaker and Associates and Hayt, Hayt and Landau.  These are two fine collection firms, they know how to handle credit card cases.  These are not firms that you want to go up against without legal representation.

So the big question is, what happens when you hire a consumer attorney?  Well, it depends upon which court you are in.  If the lawsuit is in the local District Justice court, then you will let the attorney go to the hearing and argue the case.  This most often can result in a judgment in your favor.  LVNV is often unprepared at Magistrate hearings.  If the lawsuit is filed in the Court of Common Pleas of your county, then a different approach is necessary.  A written response needs to be filed and for LVNV cases, the most appropriate response is often to file Preliminary Objections.  These objections are a statement to the court that the lawsuit is defective.  (All LVNV lawsuits are defective when initially filed).  The court will rule on the objections and likely force LVNV to come up with more evidence.  When they cannot come up with more evidence, the case is often tossed.

If you are sued by LVNV, please do not contact them without speaking to a consumer attorney, whether its someone from my firm or another.  These cases are best handled by an attorney, not by you.

Posted in Lawsuits, LVNV

Statute of Limitations for Credit Cards

What is the Statute of Limitations for Credit Cards in Pennsylvania?  We get calls asking this question every day.  In most instances, the statute of limitations on a collection claim in PA is 4 years.  There are a few exceptions, namely for Discover and Capital One accounts, which may be only 3 years.  Discover and Capital One may have different (and lesser) statutes of limitation due to the contract that they include with their accounts.  Not every contract has the same language, but some of them do.

When does the Statute of Limitations start?  The SOL starts when the account or claim goes into default.  Default occurs when you fail to make a payment, in most instances.  As an example, you make a payment December 31, 2009.  The next payment presumably is due on January 30, 2010.  If you fail to make that payment, then the statute clock starts to click.  If there is a four year SOL at work here, then the claim against you would have to be filed by January 30, 2014.  If the claim is filed after that date, then the claim may be “time-barred”.  Time barred simply means that a claim is too late, it does not mean that the collector cannot sue you.  What I mean is that time barred lawsuits are filed every day.  You cannot simply call up the collector and say “this is too late, drop it”.  That phone call is rarely going to work.  Instead, you are going to have to assert your defenses to the lawsuit by filing a responsive pleading.  Then, you may have to go to a hearing or have a motion for summary judgment scheduled.  The point being made here is that many people believe that if the lawsuit is too late, they can either ignore it or they can simply call the court or opposing attorney and ask them to withdraw the case.  I can say that rarely is an effective maneuver.

If a credit card collection action is filed against you and you think that the SOL has run, you should consult with a consumer attorney right away.  The action of filing a claim after the SOL has run is illegal and is contrary to the Fair Debt Collection Practices Act (FDCPA).  This can result in you filing a claim against the debt collector who sued you.  Such a lawsuit would entitle you to up to $1000 in statutory damages, plus any actual damages, plus recovery of reasonable attorney fees.

Posted in Lawsuits

Can I strike a Default Judgment?

We seem to get 3-4 phone calls per day asking what to do about a judgment.  In most cases, the only option is to settle.  You cannot raise “statute of limitations” defenses, or say that “it was my ex-wife’s debt”.  Those are affirmative defenses that needed to be raised BEFORE the default judgment was entered.  Having said that, all default judgments should be reviewed because there is an opportunity to strike them under certain circumstances.

In order to get a default judgment, the Plaintiff must do everything properly.  That means that they must properly serve you with the complaint, they must include the proper notice to defend, the proper important notice, and if the debt was sold, it must include an allegation that they are the assignee of the account.  As far as service goes, this means that the sheriff must have served you or an adult in your family with the lawsuit. Every once in a while, we come across a case where “sewer service” occurs.  This is where the lawsuit is allegedly served upon “someone”, but you have no idea who that “someone” is. This happens most often when you live in an apartment complex or you move from your residence.  Service may also be obtained by mail, but only after a Court Order is issued.  Another scenario that we see is where the Notice on the Notice to Defend is incorrect.  It might be missing language, have extra language, have the incorrect phone number or address for the bar association, there are a few different issues that we look for.  The same applies to the Important Notice (or 10 day notice).  We had a scenario where a certain attorney was using an incorrect Important Notice for about 2 years… and every judgment that they have entered is subject to being stricken.

If you would like a review of your default judgment, you will need to provide us, or another attorney, with a copy of several documents.  The Complaint, the Important Notice, the Sheriff return document and a copy of the complete docket statement.  We can review for errors and determine whether any mistakes were made.  If any were made, then you can petition the court to strike the judgment.  If this is successful, this does NOT mean that you win the case.  It simply means that the lawsuit is re-opened.  You will have an opportunity to defend the case from that point.

Posted in Lawsuits

Go It Alone? Bad Move on a Credit Card Lawsuit

I had a conversation with a gentleman yesterday that I have had numerous times with other potential clients.  The caller asks for a case review, which we are always glad to offer.  He was being sued by Portfolio Recovery Associates for about $7000, which is alot of money.  I discussed the claim in detail, explaining what needed to be done and what we could do for him.  Based upon what we discussed, I was nearly certain that I would win the case if hired.

At the end of the phone call, the man said that he was going to file his own answer. Even though I hear this all the time, I am still very shocked each time it happens. I explained to him that filing an answer was the wrong move, that he was making a very large, possibly fatal mistake, and he said that was still what he was going to do.  I explained to him that filing objections on his case would be the proper move, and he said that he would add the objections to his answer and that he was confident that the court would honor them.

The first question that I have, that remains unanswered, is why did you call an attorney if you are going to ignore their advice?  The second question that I have is why would you risk so much money when you have a guaranteed winner if you hire a consumer attorney?  The third question that I have is why do you think that you can learn what I know by spending an hour or two on google?  Obviously, I will never receive answers to my questions…. This gentleman kept insisting that he was making the right move, that he knew all about “standing” and other legal concepts.  I did ask him why he called my office if he had no intentions of hiring an attorney and he clearly felt that he knew more about the law than I did, and his response was that he just wanted to see what an expert would say.  Well, the expert spoke and the expert says that he is going to lose, GUARANTEED.  It is inevitable that in 3-4 months this gentleman will call me up and ask me how much it costs to file an appeal because he got crushed at the arbitration hearing.  Well, sir, the fee is much higher to handle an appeal than it would be to handle the original case, because now I have to try to correct the mistakes that you made, and that will require extra court appearances…

Look, I know my job and I know credit card law. I know every case and I know how most counties handle these matters.  I know the proper response and the proper defenses.  I know how to defend you  and protect your rights and interests.  You may be smarter than me, obviously there are many people who are smarter than me, but there are very very few, if any, who know Pennsylvania Credit Card Law better than me.  You cannot go onto google for an hour or two and think that you are prepared to defend your case, especially when its for $7000.

You don’t want to represent yourself on these cases for many reasons.  You don’t know the proper response to the lawsuit.  Even if you did know what it was called, you don’t know how to draft and present it.  You don’t know how each collection agency or attorney handles things, what their procedures and tendencies are.  We craft defenses based in part on what is in the complaint and on which law firm is representing the debt buyer.  Each debt buyer has different attachments that they place in the lawsuit, that require different responses.  Most importantly, you should not personally be involved in the defense of the lawsuit, at least at the onset, because you are a liability.  That’s right, you are a danger to your own case.  You can be cross examined and your testimony can be used against you.  Bet they didn’t tell you that in the internet chat room that you visited when drafting your own answer…

If you call my office, I am glad to give a consultation, even if you are not going to hire me or my firm.  That being said, if you don’t hire us, and you don’t hire someone else who does what we do, you are setting yourself up to lose a case that you would almost otherwise be guaranteed to win.

Posted in Lawsuits

Credit Card Lawsuit Defense Tips

Large quantities of credit card lawsuits continue to be filed on a daily basis.  Credit card lawsuits can be defended quite successfully, especially when the debt has been sold to a debt buyer.  Rule number 1:  Do not ignore the lawsuit.  This happens with such great frequency that it is mind boggling.  People often put their heads in the sand when they are sued.  Why?  I have no answer for that.  Get on to google and search for a consumer attorney…get a free consult, and see if anything can be done.  Rule number 2:  DO NOT DEFEND YOURSELF.   You are being sued, for real money.  This isn’t a game, or a movie, or a chance for you to play attorney.  A wise man once said, anyone who represents themselves in a court of law has a fool for a client and an even bigger fool for an attorney.  The collector knows what he is doing.  This is their job, their career, their payday.  You cannot go into an internet chat room and figure out how to defend yourself.  Rule number 3:  Get a current copy of your credit report.  This can show many things.  Date of last payment, charge off amount, payment history, account ownership.  We recommend www.annualcreditreport.com.  The site is free, you receive 1 credit report per year.  Rule number 4:  Do NOT call the collector.  Their incentive is to get you to pay, period.  They are working on a commission…that means that they get a cut of whatever amount you pay.  They are not looking to protect your rights and interests.  Discuss the matter with a consumer attorney first.  Rule number 5:  Do not assume that you owe the debt.  Yes, you may have had a Home Depot card and you may have stopped paying on it, but, that doesn’t mean that you owe the debt.  When you defaulted, Home Depot had a choice to make…sue you, or, sell the debt to a debt buyer.  If the debt was sold, then they have effectively washed their hands of you.  If you pay the debt buyer, you are paying a scavenger.  The claim that the debt buyer purchased is based upon an old account that they bought in what is called an AS IS sale.  That means that all information is treated as unreliable… they have no way of certifying that the amounts are accurate or that you do owe the debt.

If you are reading this, pick up the phone right now and call my office for a consult.  Its free, and I may be able to help you.

Posted in Lawsuits

Judgments – What do I do now?

We receive a few phone calls each day from someone who has allowed a judgment to be entered against them.  What do I do now? is the question that is most often asked.  Well, it depends upon your timing.  If the judgment was just entered, then you might be able to file an appeal.  Generally, you have 30 days to file an appeal from a judgment that is filed at the local district justice.  If the judgment is entered at the Court of Common Pleas level, then you may have only 10 days to file a motion/appeal, depending upon circumstances.

If the judgment is older, we can take a look at the court process to search for errors.  For the most part, the errors that we would be looking for are defective service, or, defective notices.  Defective service simply means that you were not served.  Defective notice means that you received a notice that was not correct, that is, one that didn’t fully explain your rights.  With a defective notice, we can attempt to strike the judgment and re-open the case for you.  What we cannot do, and what most people want us to do, is argue the merits of the case.  Many clients call me and say that the lawsuit was filed after the statute of limitations expired.  While that may or may not be true, it doesn’t matter if you didn’t properly defend yourself when you had the opportunity.  What does matter is whether you were served properly, and whether you received the proper notices.

In the absence of an error, the only choices, unfortunately, are to settle or to do nothing.  There are pros and cons to each.  Contact my office for a free, no obligation review of your consumer law issue.  412-823-8003

Posted in Lawsuits

Credit Card Lawsuits – DO NOT Represent Yourself

It is amazing to me how many people choose to represent themselves in credit card lawsuits.  I imagine the scenario is this:  get served with a lawsuit, browse google for a few minutes to see how to defend a case, end up in a debtor’s internet chat room, take advice from a McDonald’s employee who happened to make the last post, and then consider yourself a legal expert.  (nothing wrong with the McDonald’s employee, I am just making the point that the person is NOT an attorney).

For the life of me, I cannot understand how somebody without a legal education can think that they can do what we do.  Attorneys have at least 3 solid years of law school, have passed a bar examination, and have hundreds if not thousands of cases of trial experience.  And you think that you can beat one of us?  Amazing.

Now, to get down off of my soap box, yes, it is possible for a non attorney to beat an attorney on a junk debt case.  In those few instances where the debt buyer has zero documentation, those cases are not very difficult to win.  Unfortunately, as we are finding, these buyers are coming up with more and more documentation and are starting to use better collection firms to handle their claims.  This will make it very difficult for a self represented person to prevail on a credit card case.  Remember, the attorney representing the debt buyer does this every day, probably 10-12 hours per day, as his job.  Your one single hour browsing the internet does not qualify you to defend a case.  The part that is so confusing to me is that people would risk thousands of dollars by defending themselves.  You can pay a consumer attorney a few hundred dollars to defend a case to save yourself thousands.  That is the right move, every time, just do it.

Call my office for a free consult at 412-823-8003


Posted in Lawsuits

Discover Bank beat down!

We just had a tremendous victory against Discover Bank.  Discover had sued our client in small claims court.  They were not overly prepared and we won convincingly. Discover filed an appeal and immediately commenced discovery.  (Discovery is the process of asking for information about a case, it is very time intensive and detailed).  After answering all of the discovery we patiently waited.  Discover, throughout, kept begging us to settle the case.  While we did discuss it with our client, in great detail, she wanted to move forward with the defense.  After several pre-trial motions by both our firm and the collection firm, the case was set for trial.

Clay Morrow handled the hearing for our firm and went right at the Discover witness.  The witness was grilled by Clay in regards to the accuracy of the statements and the underlying contract.  After a thorough pounding, the witness was rendered un-credible.  Our client held up under heavy cross examination from the Discover attorney.  At the conclusion of evidence, Judge rendered a verdict in our client’s favor.

Posted in Lawsuits

Checking Account Garnishment

Can my checking account be garnished?  Huge topic at our office right now. The answer is a big MAYBE. It really depends upon the circumstances. First off, let’s explain that a checking account garnishment cannot occur in any circumstance until the creditor obtains a judgment against you (there are limited exceptions, but for purposes of this article we are focusing on credit card lawsuits). No judgment equals no garnishment.  So my first piece of advice is to discuss your situation with a consumer attorney… most of us offer a free consultation.  If a creditor threatens checking account garnishment before obtaining a judgment, they may have violated debt collection laws.  If they threaten, at any time, to garnish a spousal joint account, again, they may have violated debt collection laws. Spousal joint accounts are not subject to garnishment unless the creditor obtains a judgment against both spouses.

My second piece of advice is to defend the lawsuit… in most instances.  Most collection lawsuits in Pennsylvania are initially defective, that is, they are legally insufficient. The court does not automatically know this, you have to raise this issue with a process called Preliminary Objections.  This places the Court, and the creditor, on notice that they need to produce “more”… more documents, more contracts, more statements… MORE!

In the event that you lose a collection lawsuit, then yes, your checking account is subject to a garnishment, if it is not a spousal account.  (Other joint accounts, such as those between friends, parent/child, or other relatives, can be subject to a bank account garnishment if you lose the lawsuit).  There are minor exceptions to garnishment of those funds, but for the most part, the entire account up to the judgment amount is subject to a garnishment.

Contact our office today at 412-823-8003 or 1-888-536-6644 for a free consultation regarding checking account garnishments.

Posted in Garnishment, Lawsuits

Portfolio Recovery Associates – Who are they?

We have seen a surge in recent lawsuits being filed by Portfolio Recovery Associates.  Portfolio Recovery is a large company whose sole business is to purchase allegedly delinquent credit card accounts for pennies on the dollar and then try to collect on the full amount. The most recent data that we have seen shows that Portfolio is now purchasing bad debt for 1.75 cents on the dollar.  A great price for them, don’t you think?  Generally, after purchase, Portfolio  will send a letter to you (they are required to do this by law, but they do not always do it) and/or they will call you.  They do not want  to sue you, they want to collect money from you, and they hope that you will voluntarily pay them.  A lawsuit will occur if you do not.  I have not seen many instances where Portfolio sells its accounts to other purchasers, so if they obtain your account, you either pay them or they will sue you.

That may scare most people, but it shouldn’t scare you.  If you are here reading this, then you are smarter than most of the general public.  It means that you are doing research, and that is a good thing.  It also means that you are doing research in the right place, which is even better.  The truth of it is that a lawsuit filed by Portfolio Recovery Associates in Pennsylvania should not scare you.  It should concern you, sure, but it should not scare you.

When Portfolio purchases these accounts, in most instances they do not obtain the documentary evidence that they need to prevail against you in a court of law.  Their business model is based on 3 things:  1) they acquire the accounts cheaply; 2) they assume that many people will be frightened and will pay them voluntarily; 3) they assume that you are not smart enough to contact and/or hire an attorney.

Posted in Collection Agencies, Lawsuits, Portfolio Recovery

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.