Credit Card Debt

Credit card debt collector

Debt Collectors

Make the Collection Agencies Stop!

You cannot make them stop calling. You cannot make them stop writing you letters. They call you at work. They call during dinner. They are the Zombie Debt Collectors.

I deal with collection agencies regularly on behalf of my clients. It’s interesting to me that an industry as regulated as collections can produce such a group of pirates and rogues.

I’ve Been Sued By A Debt Collector! Help!

Are you being harassed by debt collectors? Did a process server pay you a visit last night, dropping off a Summons & Complaint? First: BREATHE. Repeat after me: BREATHE. OK? Now, here are some important things for you to know:

Negotiating With the Collector: Your conversation cannot be used to prove their case against you.

Often, people believe that if they negotiate with debt collectors, those conversations can be used against them in court to prove you owe the debt. That’s not true. In California, settlement negotiations are “privileged” and the collector cannot use the conversation in court to prove whether you owe the debt.  If you have already been sued, you have nothing to lose by trying to settle and avoid having to hire a lawyer and pay Court costs.

If the debt isn’t yours, or if it has been many years since last paid, do NOT offer to pay anything.

If the debt was not authorized by you (including the fact that you are the victim of identity theft on the debt or not the correct person), you should not agree to pay a penny to settle it or remove it from your credit report. You should also put this in writing by certified mail, return receipt requested. If you pay a debt that is not yours, you may open yourself up to having to pay other debts that are not yours. It may also hurt your credit scores. A debt older than the statute of limitations on the date it was filed in court should not be negotiated. This requires a very detailed analysis of the debt and last payment information to correctly determine.

Discussing your financial affairs: Maybe

If the collection attorney gets a judgment against you, the Court can order you to bring copies of your income tax returns, bank and investment statements, and evidence of any income and assets to court to show the attorney in an examination under oath, where you will be required to answer almost any question asked. Thus, if you owe the debt, it may not make any difference when you discuss your income or assets, if you want to negotiate a settlement that is even better than the written offers received. If this is your debt and you were not able to pay it originally, now is as good a time as any to start that discussion and answer questions truthfully about your finances, to see if you can get an affordable settlement.

If you settle, get the terms in writing and avoid entry of a default judgment

If you and the plaintiff (that’s the legal term for the collection company that sued you) can agree on a lump sum or payments that are affordable and fair, get that in writing, preferably a document filed with the court. The written agreement should provide for dismissal with prejudice of the complaint, meaning they cannot refile it. Even if there is nothing filed with the court, if you have a letter from the plaintiff or their law firm of the terms or that you have paid the settlement, you would want to keep this letter for many years, in case the debt rises up from the ashes or appears incorrectly on your credit reports. The worst result would be that you settle and they get a default judgment against you in court, claiming to the court that you failed to timely answer. If you have a written agreement and you comply, that would help you set aside a false default judgment. Be sure you understand the payments, interest rate, principal amount, and consequences of missing payments.

Common sense for all settlement payments: Affordability

This should be obvious, but do not agree to settle with a collection agency or debt collection attorney if it means committing to a payment plan that leaves you without the ability to pay your bills, or if it puts your other obligations in jeopardy. If you don’t make all payments you agreed to, the collection agency or debt lawyer can get a judgment and you are then back to square one,  because you paid some money and they can collect the rest from your wages, bank accounts, investments, and home equity. Review your finances carefully, before you commit to a payment that you will regret.

Have a backup plan: hire an experienced credit card collection defense lawyer

If they reject your settlement proposals and simply offer you unworkable demands that you cannot afford, have a backup plan. Most California lawyers do not know how to defend debt collection lawsuits. My clients have told me that my fees to properly defend their case were less than the unreasonable settlement demands being made by the debt collector.

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