Have you ever been threatened with arrest?  How about “Without your payment, we will be referring this to our legal division” or one of the worst I’ve heard a client tell me “You are an unfit mother and if you can’t even pay these bills, we’ll have to get the court to take your kids away from you.”

Well – today, my friends, I’ve heard what I think is one of the most blatant and intentional violations of just about every consumer protection law there is.

An Erie, Pennsylvania collections company named ‘Unicredit America, Inc’ setup a fake courtroom in their office building, with an elevated judge area, plaintiff & defendant tables – all under the guise of convincing debtors to pay a bill.  The Pennsylvania Attorney General’s office has files a lawsuit against them for their illegal actions.

From the PA Attorney General’s office release,

According to the lawsuit, fictitious court proceedings were used to intimidate consumers into providing access to bank accounts, making immediate payments or surrendering vehicle titles and other assets – sometimes dispatching Unicredit employees to consumers’ homes in order to retrieve documents or have consumers sign payment agreements.

Corbett said Unicredit allegedly used civil subpoenas to summon consumers to an office in Erie, which included an area referred to by Unicredit employees as “the courtroom.”

The fake courtroom allegedly contained furniture and decorations similar to those used in actual court offices, including a raised “bench” area where a judge would be seated; two tables and chairs in front of the “bench” for attorneys and defendants; a simulated witness stand; seating for spectators; and legal books on bookshelves.  During some proceedings, an individual dressed in black was seated where observers would expect to see a judge

In my practice, I have seen documents that are created by a collections company that appear to be government issued documents, or similar to court orders.  I’ve even had payday lenders tell my clients over the phone (they’ve never done it in writing yet or I’d take them to court over it) that if the client doesn’t file bankruptcy within the next three days the client can’t discharge their debt.

I would say that a good 10% of my time is spent dispelling incorrect understandings of the  law, or reassuring clients that the creditor won’t have them arrested and can’t take their car if they can’t pay a credit card debt or if they file bankruptcy (while still paying the car note.)

In Nevada, before a creditor can garnish your wages, or even try to take non-exempt assets, the creditor has a to file a lawsuit against you.  The creditor then has to personally serve you, or if you’ve moved recently and the creditor can’t find you, it can request that the court allow ‘service by publication‘ (i.e. you can’t stop a lawsuit by simply aiding the process server.)  If you do not respond, the creditor can get a default judgment then can go after 25% of your net wages, your bank account, etc.  If you answer and defend the case, depending on if it is an original creditor or a debt buyer, you may be able to win the case or at least reduce or mitigate your damages to what the original creditor or debt buyer can prove you actually owe.

If at any time a collections company ever threatens you or someone you know with arrest for not paying a credit card bill, car note, mortgage, or personal/payday loan, CALL ME, your Bankruptcy Defender, to schedule your FREE consultation.

Signed,

Your Bankruptcy Defender

Related articles

• Debt Collecting Firm Accused Of Setting Up Fake Courtroom (lockergnome.com)
• Dirty debt collectors frightened victims with fake “sheriffs,” “courtroom,” “judges” (boingboing.net)
• Debt Collector Unicredit America Inc Accused of Setting Up Fake Courtroom (smarterotti.com)

Earlier this month, the United States Trustee’s Office released the updated median income numbers for households in Nevada.  Unfortunately, unless there are seven (7) or more people in your household then the median income for your household to qualify for Chapter 7 without a ‘presumption of abuse’ just went down, in the case of a three (3) person household – very substantially.

This should comes as no surprise with Nevada having a high level of unemployment, hours being cut for some people, and new hires earning a lower hourly wage.

When a person or couple files bankruptcy, the type (or ‘Chapter’) of bankruptcy depends, in large part, on the person’s or couple’s average gross income over the six months ending the month prior to the date of filing and whether the person or couple has the ‘means’ to pay part of their debts in a Chapter 13 using a test called, appropriately, the ‘means test’ which came into being with the 2005 major revisions to the Bankruptcy Code.  This average income number is then compared against the median income for a household equal to the household size of the person or couple filing bankruptcy.  If the person or couple’s income is greater than the median income, then the person or couple’s bankruptcy attorney must complete the full ‘means test’ using allowed expenses and actual expense numbers to determine if the person or couple may still file Chapter 7 bankruptcy or if Chapter 13 bankruptcy is required.

The median income numbers for Nevada and the changes to them coming November 1st, 2010 are summarized below:

The household sizes which are most affected are the ones that file more bankruptcies – One (1), Two (2), and Three (3) person households.  These household sizes represent a single person, a married couple, and either a married couple with one child or a single parent with two children.  If your income is “above median”, i.e. above these median numbers, then the Bankruptcy Code presumes you have enough money left over at the end of each  month to pay SOME of your debts and the Code says you need to do Chapter 13 bankruptcy instead.  Having said that, if you have high mortgage payments, high medical bills, or a circumstance that causes certain allowable expenses to be higher than usual, you may still be able to file Chapter 7 bankruptcy.  Ask a knowledgeable Bankruptcy Attorney such as the Bankruptcy Defender for assistance to do this.

The Results of this change?  If you are considering filing Chapter 7, and your income is above the new median income numbers but below the old income numbers, you should contact my office IMMEDIATELY at (702) 425-5100 to schedule an appointment to see if you should file bankruptcy before November 1st, 2010, or risk being in a five (5) year Chapter 13 repayment plan.

photo credit: Thorne Enterprises

Related articles

• Tighter Credit Means Fewer Bankruptcies (bucks.blogs.nytimes.com)
• August bankruptcy filings down from last year (mysanantonio.com)

If there is a question that you think others may benefit from, by all means, ask away.  I’ll be happy to answer them for you, and you will be contributing to a growing FAQ for anyone on the Internet to come to when the need arises.

So without further ado, ASK ME ANYTHING (about debt & BK of course, not the price of gold in 1985)!

Sincerely,

Your friendly neighborhood Bankruptcy Defender.

January 2010:  1,518 total, averaging 75.90 per day and 8.43 PER HOUR.

February 2010: 1,698 total, averaging 84.90 per day and 9.43 PER HOUR.

March 2010: 2,366 total, averaging 102.87 per day and 11.43 PER HOUR.

April 2010: 2,323 total, averaging 105.59 per day and 11.74 PER HOUR.

May 2010: 2,065 total, averaging 98.33 per day and 10.93 PER HOUR.

June 2010: 2,187 total, averaging 99.41 per day and 11.05 PER HOUR.

July 2010: 2,135 total, averaging 97.05 per day and 10.78 PER HOUR.

What does this mean?  By the end of 2010, this means that a minimum of 1.3% of the population of Clark County Nevada will have filed Bankruptcy. Depending on how many of those cases are married couples, that number could double!

Filing bankruptcy has become a fact of life here in Southern Nevada.

If you are experiencing financial hardship, don’t deplete your 401(k) or your IRA – if you file bankruptcy before that you may be able to keep up to $500k of your 401(k) and IRA accounts combined to give yourself more of a chance of recovering.  I’ve had clients who used their life savings to try to keep a business open and they’ll never get that money back.  They’ve depleted their 401(k) to pay a mortgage on a house they couldn’t afford anymore.  If you are in this situation, stop what you’re doing, call my office and make an appointment for a FREE CONSULTATION.  I can provide you with sound advice and give you alternatives which may not even include bankruptcy.

If you don’t know your options, you can’t make good decisions.

Come see me,

Bankruptcy Defender

Ph: (702) 425-5100

For those that don’t know the procedures – when a Plaintiff files a lawsuit, the Plaintiff (or his/her attorney) has to have a third-party personally deliver a copy of the lawsuit and the summons to all Defendants.  The entity or person that does this is called a ‘process server’ who signs an ‘Affidavit of Service’ stating, under penalty of perjury, that the person has personally delivered a copy of the lawsuit and summons to the Defendant.  Courts accept this affidavit as gold unless challenged.  Once a Defendant has been served, the Defendant has 20 days to file an Answer admitting or denying the allegations in the complaint.  If the Defendant does not do so by that time the Plaintiff can request the court enter a ‘Default’ against the Defendant.  The Plaintiff then files an Application for Default Judgment and generally gets however much they asked for in the complaint and provided final account statement showing the asked for damages.

Now – if the Plaintiff’s process server LIES and says he served the Defendant but did not, then the Defendant doesn’t know about the lawsuit and the Plaintiff can get a default judgment.  With a judgment the Plaintiff can garnish the Defendant’s wages, clear out their bank accounts, take their non-exempt car/motorcycle/boat/etc until the judgment has been satisfied (i.e. amount has been paid.)

Why mess with Defendants who have a chance to defend themselves when the process server can lie and get a judgment without a fight?  That’s what this process serving company is alleged to have done.  Even worse, it appears that the Plaintiff, Rapid Cash, may have known (actual knowledge), or at least when the company started claiming they served tons of Defendants all over Vegas on the same day, the company ‘should have known’ (constructive knowledge), that the process server was lying.

Unfortunately for them – the U.S. Constitution specifically says that the government cannot take someone’s property ‘without due process’.  Because wage garnishments and bank account executions are court issued at the request of the Plaintiff holding the judgment, if the Defendant was not given a chance to defend him/herself, then there is no ‘due process’.

How’s that for a quick Civil Procedure & Constitution lesson?

If you are notified by your employer that it received a court order for a wage garnishment against you, or your bank notifies you that it received a writ of execution against your bank account – contact me, your Bankruptcy Defender.  I can help you determine if the judgment was obtained legitimately, and if it was done recently I may be able to get the default judgment vacated so you have a chance to defend yourself.

Lastly, some lawyerly advice – If you are served with a collections lawsuit – don’t ignore it.  Ignoring a lawsuit or ducking process servers does not stop the lawsuit.  It makes it easier for the Plaintiff to get a Default Judgment and take your hard-earned money.  It’s your money, let me help you keep more of it.

Your Friendly Neighborhood Bankruptcy Defender

If so, you may have received, or may start receiving solicitations from credit card companies for their ‘corporate card’.

Wonder why you got so lucky to get credit offers for your business now?

The new tough credit card regulations only regulates CONSUMER credit cards, NOT Corporate credit cards.  That new protection against increasing interest in previous balances doesn’t apply to Corporate cards.  That new restriction limiting late-payment fees to $25 or less – doesn’t apply to Corporate cards.  That new restriction from being able to charge you an over-limit fee if your late-payment fee put you over the limit – doesn’t apply to Corporate cards.

Were you excited when you thought someone recognized that your business was worth credit?  The reality more than likely is that the bank wanted to bypass your personal protections against their fees/fines/interest rates and ding you through your business.

Now do you feel lucky?

The answer?  That $200.00 is for a paralegal (a non-attorney bankruptcy preparer) to prepare your petition and you get to file your case yourself and handle everything from then on by yourself.  There is a reason the paralegal only charges you $200 – they cannot provide you with full & comprehensive legal representation by an attorney from the beginning to the end of your bankruptcy case.

You should ask yourself these questions:

1.  What happens if a creditor objects to your bankruptcy discharge? Do you know what to do to oppose the creditor?  The $200.00 paralegal cannot represent you in bankruptcy court against the creditor.

2.  What happens if the paralegal/preparer really messes up?  How much time do you think they actually spend reviewing your documents and preparing your case?  Do they have their livelihood on the line when they file your case?  If a licensed attorney really messes up, that attorney must fix the problem or risk losing their license.  The judge usually requires the attorney to fix the problem without charging you to fix it, as opposed to a non-attorney paralegal who is not required to do so without charging you extra.

3.  What if bankruptcy is not right for you?  A non-attorney paralegal, who you come to asking to prepare your bankruptcy petition will do exactly what you tell them to do.  There have been many times when a potential client has come to me to file bankruptcy but filing bankruptcy at that time would have hurt them more than helped them.  Their ‘friend’ (codeword for person working at a law firm that does not do bankruptcy) told them that if they filed Bankruptcy that their bank would not cut-off their line of credit that they were using to buy products they were selling in their sole proprietorship business, and which was their only way of earning income.  WRONG.  We are able to restructure how you operate your business and finances to either avoid bankruptcy or plan for a possible bankruptcy filing in the future if the need occurs.

4.  What happens if you keep getting creditor collection calls?  Do you know how to ask the bankruptcy court to issue monetary sanctions against a creditor and possibly put money in your pocket for those calls?  The non-attorney paralegal cannot represent you in court to punish harassing creditors, but the Bankruptcy Defender can.

These are just some of the many questions that a non-attorney paralegal/bankruptcy preparer is not going to be able to help you with, and if they try they can hurt your financial situation even more.

Here at the Bankruptcy Defender, we provide FREE consultations to first determine if bankruptcy is right for you, or if we may be able to help you in other ways.  If bankruptcy is a good option for you, we tell you up-front what your total cost for legal fees and filing fees will be.  We provide you full & comprehensive legal representation from the beginning to the end of your case to ensure that not only can you obtain a fresh start, but that you will be better prepared to avoid the same problems in the future.

Please call William Devine II, your Bankruptcy Defender, at (702) 425-5100 for your FREE consultation and get your Fresh Start today.

If you have a lot of debts, you might consider filing bankruptcy with the Bankruptcy Defender.  Another option may be to stop paying your debts, put money aside in a savings account, and after 6-12 months, begin settling your debts with the original creditor or debt buyer (also known as ‘debt settlement’.)  Regardless, if you are behind on paying your debts you will inevitably be contacted by collection agencies demanding you pay your debts.  Contrary to what some debt collectors believe, you have rights.

Your rights include:

1. Your right not to be contacted at your workplace if your employer does not permit such contact, or if it may cause problems for you at your job.
2. Your right not to be contacted at an inconvenient time, which limits collection calls to only between 8am and 9pm weekdays and weekends in the time-zone of your billing address.  If a third-party collection agency contacts you outside of these hours, it is a violation of the FDCPA and you may have a claim against the creditor and collections agency for doing so.
3. Once contacted, you have the right to dispute the debt and request validation and verification of the debt.  These requests must be made within 30 days of the original contact, and should be in writing.  The collection agency must then provide you with validation or verification (depending on your request) of the debt and written proof of such validation or verification.
4. Your right to tell the collection agency to stop contacting you ever again.  It may contact you only once again and only to tell you the status of the account or to tell you what it is going to do next (i.e. refer to our attorneys to file suit, it is ceasing all contact with you, etc.)
5. Your right to not be harassed or have the collection agency disclose the existence of your debt to third parties.  This means the collection agency may not:
   1. Harass your employer
   2. Make false or misleading statements such as threatening to sue you if the statute of limitation has expired, or threatening to garnish your social security income (which may not be garnished by a private creditor), or threatening to take your children from you.
   3. Accept or request that you provide them with post-dated checks with dates that are more than five days from the date you issue the check – or actually deposit post-dated checks early if it tells you it will not deposit them until the date on the check.
   4. Tell a third party about your debt via phone or letter.
   5. Mail to you postcards or letters in envelopes that fail to identify that it is a collection agency.
   6. Threaten to, or actually, submit false credit information to third parties.
   7. Use obscenities or profanity when speaking to you about your debt.
   8. Tell ANYONE else about the existence of your debt.
   9. Make false statements to you such as claiming to be an attorney if the person is not an attorney; claiming to be calling from a law firm when it is not a law firm; and claiming to be calling from a government agency when not from a government agency.
   10. Misleading you about the type of documents it is providing you – i.e. suggesting that documents are legal documents, or suggesting that legal documents are not legal documents.
   11. Repeatedly calling you with the intent to annoy or harass you.
   12. Use deceptive means to gather information about you from you or third-parties.
   13. Claim that you have committed a crime by not paying the debt.
   14. Claiming that the collector will have you arrested, put in prison, take away your kids, or take any other action unless the collector actually has the legal right to do so and if it has the right to do so, it must actually intend to do so (with VERY FEW exceptions, collectors cannot have you arrested and put you in jail for not paying a debt unless it is owed to the federal government, criminal restitution, government fines, child support, spousal support, etc.)

Related articles by Zemanta

• File An FDCPA Civil Lawsuit Over Debt Collection Violations (consumer-rights.suite101.com)
• Protect yourself from debt collectors (money.cnn.com)

If so, if the Affidavit of Service in your case was issued by On Scene Mediations owned by former police officer Maurice Carroll, your judgment may have been obtained by FRAUD.

The police department raided Maurice Carroll’s home on July 6th and obtained boxes of financial documents and business records.  his company was reportedly bringing in $50k PER MONTH for process services, including these alleged fraudulent services.

An arrest warrant has been issued for Carroll based on the findings of two Justices of the Peace – Justice Melissa Saragosa and Justice Diana Sullivan.  These two Justices uncovered an alleged scam in a multitude of cases filed by Rapid Cash and Richland Holdings that used On Scene Mediations.

If you have a judgment against you from Rapid Cash or Richland Holdings, you should contact the court clerk to determine if On Scene Mediations was the process server that submitted the Affidavit of Service.  If it was, you should inform the Court Clerk that you believe your judgment was obtained by fraud and request that your case be included in the Court’s investigation.   You can read more about this at the Las Vegas Review Journal.

This problem is just the tip of the iceberg.  Mass collections companies and law firms depend on default judgments against uninformed consumers.

If you have been sued, and actually served (unlike in the above story), contact your Bankruptcy Defender and I can help defend your rights to reduce, or in some instances completely avoid, a judgment against you for the alleged debts being collected.

The United States Supreme Court recently decided for a litigant whose student loan interest was included as discharged in his chapter 13 bankruptcy plan.  Federal bankruptcy law, 11 USC 523(a)(8), prohibits discharge of student loans absent a finding of ‘undue hardship’ by the bankruptcy judge.  In this case though, the bankruptcy judge confirmed the chapter 13 plan without requiring the debtor to prove ‘undue hardship.’  The student loan lender did not object to the plan prior to the confirmation of the plan and thus, according to the Supreme Court, the confirmed plan was binding even as to the student loans.

At the Supreme Court oral arguments, Justice Clarence Thomas said that even though the bankruptcy judge made a serious error by confirming a plan that included non-dischargeable student loan interest debt without a finding of ‘undue hardship’ by the bankruptcy judge, that error was not so serious as to void the confirmed chapter 13 bankruptcy payment plan.  The Court also found that the student loan lender could not justify using Rule 60(b)(4) to to void the confirmed plan because the lender failed to participate in the plan objection process in bankruptcy court.

This is a very limited issue and will probably have little impact in your potential chapter 13 bankruptcy.  What I expect is that student loan lenders will be more proactive in monitoring cases where the student loan lenders are listed as creditors.  In other words, they will not ‘fail to object’ as this lender did as to avoid this problem in the future.  BUT if the student loan lender fails to object to a plan that calls for even your complete student loan, principle and interest, to be discharged, if the Bankruptcy judge makes the mistake of confirming the plan (improbable now after this decision) then your loans could be discharged under this decision.

What does this mean for you?

This means that ONLY if the lender does not object to the plan, and your bankruptcy judge makes the mistake of confirming a chapter 13 plan that calls for discharge of student loan debt without an ‘undue hardship’ hearing, will you be able to discharge your student loan debt absent a finding of ‘undue hardship.’

The opinion is available here under ‘United Student Aid Funds v. Espinosa’

To determine if your student loans are eligible for discharge, please contact the Bankruptcy Defender for a free consultation.