My mortgage and auto lender are calling me monthly and I’m not overdue!

If your bank has targetted you as a high risk loan — it may be because you have had some late payments, because of your debt:income ratio, or because of some totally random characteristic having NOTHING to do with your character or payment history, you may be getting monthly reminder calls.  “Remember to pay your mortgage!”

These calls may be from an autodialer or even real people (!) and if there are multiple calls, especially multiple in a day, they can really become annoying.  However, in most circumstances, these calls fall into the “crappy customer service” category and not debt collection harassment.   I am not sure what can be done to stop the calls (change your number?) but you could try sending a letter requesting you only be contacted by mail.

Will the REAL free credit report website please stand up?

http://www.annualcreditreport.com

Not that other one.  Don’t go there.  Don’t do it.

Five things NOT to do when served with a collection law suit

In these tough economic times, more and more people who have always worked hard to manage their funds and pay their own way are finding it harder and harder to pay their bills.  Hard choices must be made, and sometimes that means not paying a few or even most bills.  Do that long enough and you may be hit with a collection suit.

How do you know you’ve been sued?  If things work the way they are supposed to, you will be SERVED with a summons and complaint.  That’s never a good day and a lot of thoughts will be racing through your mind.  Here is my short list of five things NOT to do when served with a collection suit.

(1)  Do not call the attorney listed on the summons and complaint.  That is the law firm who represents the OTHER SIDE.  They are not going to help you, on the contrary they have an oath to do what is best for the company SUING YOU.

(2)  Do not send a small payment to show you are an honest, well-meaning person.  This can hurt you as sometimes, lawsuits are filed after the statute of limitations has passed.  If you send a payment, in many states this restarts the time frame that a suit can be validly filed!  So do NOT do this.

(3)  Do not respond with excuses. For example, do not respond to the complaint with a court filing in which you state “I really want to pay this debt but the creditor/collector will not negotiate a plan with me, they are totally unreasonable.”  You want to pay $45 a month and the collector wants all or nothing?  Tough cookies, sista.   The collector or creditor has no duty to be reasonable, this is business not preschool where we all learn to be considerate!  I cannot think of a consumer loan contract which states that the lender must negotiate with you in the way that you choose.  Plus, you just basically admitted the debt is yours and the full amount is correct.  Don’t do that.

(4)  Do not just show up in court on the date stated without filing any paperwork.  Usually the date for the first court appearance is long after a response is due to the complaint and if no response is filed, you may show up only to find you already have a judgment against you.

(5)  Do not bury your hand in the sand and hope it all goes away.  It won’t.  The creditor or collector can get a default judgment and in some states, like California, they can begin to garnish your wages — 25%!   They can put a levy on your bank account and even a lien on your home!

OK, so what TO do?  That’s another post!  BUT — keeping it simple, get advice from an attorney who specializes in representing consumers — you can look for an attorney at http://www.naca.net or your local free legal services.  Also, there are books like those from nolo press that help you represent yourself in collection suits.

The key is to remember — this is a LAWSUIT.  If you got in a car wreck and the other driver took you to court, you wouldn’t expect the judge to award damages just based on the other driver’s statement “It’s his fault and he owes me $5000″, right?  EVIDENCE would be expected.  This is no different — make the other side prove their case before you hand over money.  I mean, if you had extra cash you would already have paid a long time ago, right?

Student Loan Collectors are not allowed to harass you!

The law is different for Student Loans then for many loans like credit cards, car notes, or personal loans.  For example, student loans can sometimes lead to garnishment — money taken out of your paycheck — without a court judgment!

However, student loan collectors are not allowed to harass you any more than any other collector.  Many times student loan collections are done by the original creditor, but in states like California and Texas, harassment is illegal no matter if it is done by outside collections or the original owner of the loan.

Some things that student loan collectors are not allowed to do include:  talking to people at your job or family members about your debt (although they can talk to co-signers), calling you before 8 a.m. or after 9 p.m., and speaking or yelling at you in a derogatory fashion, either by calling you names or telling you how you are a bad person for not being able to pay your debts.

Student loan collections are serious business — for many people, student loans are the largest debts they have and they can not get discharged in bankruptcy.  If you have outstanding student loans you are unable to pay, there are progams to help you.  However, harassment is not part of the program.  If you are being harassed by a collector, be it a student loan collector or otherwise, contact your local consumer attorney for help!

Never served but now there is a default judgment? Set that baby aside!

In California state court, a party cannot get a default judgment against someone who never knew the lawsuit was occurring.  Service of a summons and complaint are necessary to alert someone of the lawsuit and give the person an opportunity to be heard in court.

What should you do if a debt collector — or anyone — gets a default judgment against you when you were never served?  An attorney can file a motion to overturn the default judgment for lack of personal jurisdiction.

The closer in time to the granting of the judgment, the simpler the motion is — HOWEVER, if you never were served, the judgment can be set aside at any time.

PLEASE note — service does not mean that someone has to hand papers to you and you grab hold of the papers.  Substitute service, where a process server hands the papers to an adult at your residence who admits that you do live there, that counts as service.  If you run or slam the door when a process server shows up and they leave you the documents, that almost always counts as well.  This is not a “gotcha!” type cure-all for all or even most default judgments.  However, if you really were not served and can show that to be true, then contact a consumer attorney to get the judgment set aside.