My car was repossessed about 8 months ago. It was sold at auction, and the bank says I still owe them about $3,000. Today, I received a court summons for the money I still owe. I didn't make a payment arrangement earlier because I didn't have any money to pay. Now I can afford to make payments, but not pay the whole amount all at once. I have 30 days to respond if I have any dispute, but I don't. I want to make payments and I want to pay off this debt. The summons includes a copy of the contract I signed for the car purchase, and the last page has something from the attorney that says I can call their office for a "prejudgement settlement payoff" to avoid a judgement, or if I have no dispute but cannot pay before the court enters a judgement I can fill out an attached form and then try to work out a payment arrangement. It goes on to say my payment offer will not stop or suspend the lawsuit and there are no guarantees my payment offer will be accepted. The form asks me to supply information about number of people in my household, my employer, the dates I get paid, how much I make before and after taxes, what my payment offer is, a copy of my pay stub for proof of income and a line that says I don't dispute the lawsuit and have no defense to the lawsuit. My questions are: 1. What should my response be to this summons? I have 30 days to respond, but if I'm not disputing anything, what should my response be? 2. Should I just call the attorney's office and try to work out a payment arrangement? 3. Should I fill out this form and return it to the attorney and then work out a payment arrangement, as they suggest? I'd rather work out a payment arrangement with them than have them get a judgement and start garnishing my wages. Any other suggestions?
You still need to respond to the summons, to avoid a default judgement. The process varies depending on your state, and the court rules. Rule #1, you always want to dispute the lawsuit, and vigorously defend from any lawsuit. To not, gets you a default judgement. The lawyer wants you to make a declaration against your interest that you have no dispute or defense, and will probably try to use that against you when it goes to court. In short. 1) Deny everything, and demand proof of all of the plaintiff's claims. (How else are you going to know, for fact, how much they did recover through auction, and any other means that offset the amount of the debt?) 2) The phone is their weapon, the paper-trail is ours. If this is the first time that you've ever heard from this lawyer, you should receive a statement saying you have a right to demand validation. Validation proves not only that you are, in fact, the right party, but that the amount of the debt is 100% correct, and without any illegal fees. (Again, see #1.) And, if you demand validation, it DOES - required by Federal Law - suspend the lawsuit until after they've OBTAINED and MAILED the validation. If an actual lawyer has looked at the actual documents, before making his professional opinion to file the suit, they *SHOULD* already have the validation, so there should only be a negligible delay. (Was there an actual physical attorney signature on any of the papers, or was there a facsimile signature, or no signature at all?) 3) Using their forms is typically a bad idea, they want to gather information to make collecting the judgement (and garnish your wages, bank accounts, etc - if legal in your state) easier. Do we ever want to make their job easier? You don't need their forms to ask for a payment arrangement, and I would argue that claiming that they need all that info to determine whether they'll be amiable to making a payment arrangement is dangerously close to making false and misleading representations. They'd have to provide to Federal Court a really good reason why every single piece of that data especially the "I DON'T DISPUTE THE LAWSUIT, AND HAVE NO DEFENSE TO THE LAWSUIT" declaration is 100% required to determine whether a payment arrangement is acceptable. (Hint: I really think a Federal Court judge would have a hard time swallowing that. And they may also think that said disclaimer requirement would over-shadow the requisite validation notice.) Hint: When you sue this attorney, the first clause that they'll want to put into the settlement agreement is something along the lines of... "Defendant admits no liability, however agrees to settle this matter to avoid the risks and further expenses of litigation."; do you see a major difference between the clause they want you to disclaim, and that clause.
How would I go about answering the summons? If I don't dispute the debt, what kind of answer would I provide? I am being sued by the original creditor, not a collection attorney. There is a line in the summons about "if you dispute the validity of this debt you have 30 days to request verification." At one point, the bank had sent me a letter indicating how much they got for the vehicle at auction, and the remainder I owed. The remainder is less than half of what I still owed on the vehicle.
Any attorney who is filing a suit to collect a debt, is considered a COLLECTION AGENCY if they regularly file suits to collect a debt. Thanks to the U.S. Supreme Court ruling Heinz v. Jenkins. The line in the summons is the validation disclaimer, that they are required to provide as a CA. The exact formatting varies depending on your area, and the level of court. But in general, you want to deny everything and demand that the attorney provide proof of their case. If the case is at a low enough court, you may be able to (in the same format as the complaint) do a simple answer that "Defendant denies the plaintiff's allegations and demands conclusive proof thereof." Don't think of the "denial" as a "denial", think of it as I am asking that the judge decide whether or not there is enough evidence to say that the amount that they are seeking is correct. For instance, they may have added a specific dollar amount of legal fees onto the balance of the account, that specific dollar amount of legal fees may not be appropriate given the circumstances, if you don't deny their claims however, then you may lose your ability to challenge the appropriateness of the amount of the legal fees in the future. One case I saw had a ridiculously small debt, which the debt collector attorney added legal fees which amounted to many times over the debt itself. Keep in mind the standard disclaimer, I am not an attorney, I can not provide legal advice, this is what I would personally do if I received a summons on anything... Because I don't want to have the court say that the amount of the debt is any higher than it has to be... And once there is a judgement, *THAT* alone becomes the unquestionable amount of the debt, as adjudicated by the court. Your answer is the equivalent to the "speak now or forever hold your peace" in a wedding ceremony... If you don't make a challenge now, you are forever beholden to whatever the court decides, with or without you.
http://consumers.creditnet.com/Discussions/credit-talk/t-good-dv-letter-72196.html#post498864 Here is the post which goes through my first reading of Fields v. Wilber which the OP cited in a validation letter that they were writing. Essentially, the CA wanted to charge legal fees of more than 200% of the amount of the debt, but didn't specifically break down how they got the ballooned amount of the debt.
There are some attorney's fees tacked on to the amount I owe, but it's for a relatively small amount...probably a couple of hundred dollars. Should I request validation but at the same time offer to reach a payment agreement with them? Or, try to work out a payment agreement only if they validate?
You are the only one who can decide if they have satisfactorally validated that the amount of the debt is correct. Whatever you decide, you need to check with your court to make sure you are following the proper proceedures for that court. If a rule of that court allows for specifying the scope of a communication as being for settlement purposes only, I would use that rule to make sure trying to settle isn't used against you. And I personally would NEVER use a line disclaiming that I have no defense to a suit! If you are satisfied that they have broken the amounts down enough, then I would WRITE a letter giving them most of the relevant info that they requested, but the last thing I would give them is employer contact information, or pay dates. I personally wouldn't give them any more, I don't see a defendable reason why something that simple doesn't provide them enough info to determine the appropriateness of the offer. Remember the mini-miranda, any information obtained will be utilized for the debt collection purpose, the less you provide the better, for you.
They already have my employer's contact info. It is on the summons that they sent to me. As part of the suit, they are also seeking my employment and pay records from the state labor department, which leads me to believe they are preparing to garnish my wages as soon as they have a judgement against me. I'm thinking (and I could be wrong) that it would just be better to settle with them and work out a payment arrangement to try to head off any garnishment action. I really don't want my employer getting dragged into this, and I may be able to work out a better payment arrangement than having 25 percent of my wages garnished.
Okie, Based on everything I've read in the thread, if you feel like wage garnishments are on the horizon and you're uncomfortable w/ where that might lead I would do my best to settle. However, keep in mind what Jam said, "If a rule of that court allows for specifying the scope of a communication as being for settlement purposes only, I would use that rule to make sure trying to settle isn't used against you." i.e. Negotiate the best possible outcome for you in terms of your credit moving forward, and don't settle for anything that could lead to a personal finance issue in the immediate future. These things can turn into vicious cycles if not treated correctly. Best of luck and let us know how it goes.
