Everyday Law

December 18, 2008

Credit Repair Organizations — NO FEE until work is done

Filed under: Uncategorized — Amy Kleinpeter @ 11:13 pm

Under the Credit Repair Organizations Act, anyone (including lawyers and law firms) who promises to fix your credit for a fee can NOT take any of that fee until after the work is completed. Just thought you should know…if they take money up front, they are breaking the law. Maybe not someone you should be trusting …


Debt negotiation companies — how can it hurt?

Filed under: Uncategorized — Amy Kleinpeter @ 11:11 pm

You hear the advertisements on radio — Special programs!  Pay off your debt at a dramatically reduced rate!  Avoid life in prison castration BANKRUPTCY!

So it sounds too good to be true…but you call and it sounds very convincing.  What’s the harm in trying it out?

One word — lawsuits.  Any company that tells you otherwise is not helping you.

First, here is how debt negotiation typically works — if a company follows this procedure and calls it something else, they are still debt negotiators.  Let’s call them DN.

You sign contract with DN.  Contract is mostly admissions that DN may not be able to help you and you cannot sue them but must arbitrate any disagreement.

You change your credit card and personal loan bills’ addresses to the DN.  You quit making any payments on these loans.  You send money each month to DN.   Some of that goes to DN as a fee.  Some goes into an account to help pay back your debt.

Credit card lender, personal loan lender, or a collection company will send letter to DN.  Citibank will do something like this “Hey, Joe Schmoe just changed addresses to a DN.  Make him an offer NOW.”   Citi sends offer letter but because DN has taken most all of your first two payments as fees, you have nothing to pay.

Citi files a lawsuit against you which will be hard to defend as they are the original creditor and you just quit paying your bills a few months before.   In some states like California, if Citibank wins their lawsuit, your wages will get garnished once a judgment is entered against you.

I used Citi as an example, but this can happen with any lender when you join a debt negotiation company.

But what about those reduced rates — those special relationships between lenders and the DN?  Well, if you quit paying your credit cards and personal loans tomorrow, they would start sending you offers to negotiate with a lump sum payout in a few months.  That just is what the lender or debt collector ALWAYS does.  The DN does not “negotiate” anything.

So, avoid the debt negotiators.  Trust yourself — if it sounds too good to be true and involves you giving up money in the beginning for promised rewards in the future — it’s probably a scam.  Debt negotiation companies cannot live up to their radio advertisements.  I am not saying no one has never been helped by a DN – -just many more have just lost money on fees and ended up still in debt but wtih judgments against them.

December 15, 2008

Debt Collection –Why do I keep getting calls but no messages?

Filed under: Debt Collection Harassment — Amy Kleinpeter @ 3:13 pm
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“Calls, I got calls!  But they always hang up the phone!”

Whenever a client calls to inquire about bankruptcy, or because she was sued in a collection action, I always ask — have you been getting calls?

There is no need to explain what I am talking about — everyone who has been unable to pay their bills, or even has been paying bills late — everyone knows about the CALLS.  Most start at 8:00 a.m. and end at 9:00 p.m., but the sheer number of calls can make using the phone almost impossible!  Plus there is the fact that if you are getting calls, you do not want to EVER answer your phone., so you let it go to voicemail, where, pretty often, the debt collector will hang up.

I have clients complain about this — No one ever leaves a message!  They all just hang up!

Yes, most debt collectors hang up and do not leave a message.  Why?  Because that is what they are SUPPOSED to do by law!

Why?  Because a debt collector must, by law, always identify themselves and the nature of the call — those “This is Amy calling from Amy Collections, I am trying to collect a debt…”  That message must be left with ALL communications.  HOWEVER — debt collectors are not allowed to leave information in a phone message which, if heard by anyone other then the person being called, would effectively broadcast “This person has an unpaid debt!”

Imagine that I have an answering machine, or I share voicemail with a family member,  and a debt collector leaves me message “Amy, this is ACK Collections, and I am calling to collect a debt.  Call me back about paying your overdue Citibank card!”  If that message is heard by anyone else, that person immediately knows my business!  It is illegal for a debt collector to tell others about my debt or anyone’s debt — they do not have the right to broadcast your business like that!

Sooooo..let’s recap:  Any message from a debt collector that does not have their identifying information is illegal.  Any message which an outside person could hear and learn about your debt is illegal.  THEREFOR — all messages left by debt collectors are illegal.

So, quit complaining about the hang-ups on your voicemail – – at least do not complain about the fact that the collector hung up.

AND — start saving and recording every message that IS left by a debt collector, because it very likely is illegal.  You can sue the debt collector for these illegal messages and help put a stop to their illegal tactics.

December 11, 2008

Fraudulent transfer of money from YOUR bank account — what to do?

Filed under: Banking — Amy Kleinpeter @ 4:36 pm

This is NOT an easy question, but let me just bring out a couple of points.  Say you check your savings account balance one day online and it is down $10K — and you did NOT authorize a withdrawal.  What do you do to protect yourself?

NOTE: This post is written for California, but it may be applicable in your state.

(1)  Notify your bank — obviously!  Calling is good, but be sure to follow up with something in writing.  If possible, go to your local branch and talk to someone there — have the bank employee fill out a report but also hand them a written explanation yourself.  Be clear that this transfer of money out of your account was NOT authorized.  You need to do this as soon as you find out about the missing money and it is best if it is within 90 days of the unauthorized transfer.

(2)  Gather information — this should be done by your bank, but you do what you can do as well.  For some situations, this is easy — you can maybe find out that your brother forged your name.  However, for most situations, the bank will have much more access to information as to how the transaction occurred and where the money went.  You need to be sure the bank gives you this information.

(3)  Report crime to police — and call to follow up on their investigation.

(4)  Write an OBJECTION to the bank having made the transfer.  This is separate and distinct from your writing the bank to state the transfer was unauthorized and/or fraudulent.  Don’t understand the difference?  Don’t sweat it — just do this!  Write a letter to bank stating you object to the bank having made the transfer.  You want to, in the words of the California Supreme Court “tell the bank expressly that the bank erred in processing the payment orders, or that it is liable for the loss.”  Zengen v. Comerica Bank (2007) 41 Cal.4th 239, 259. I would put in both statements in your letter — the bank erred and the bank is liable for the loss. Who do you send the letter to?  Feel free to call and ask the bank!  You should have some fraud department or some account representative you are dealing with by this point in your dispute.

Please be aware this is just a short summary of some important points to follow if you are ever in the situation of having money stolen from your bank account.  I was talking to a prospective client about this issue yesterday and so went to do the research myself.

Please do NOT think all you need to do is fill out a police report or feel your work is done if someone is arrested and convicted of the theft.  There is a big difference between the government’s goal of getting a criminal off the street and your goal of getting your money back!  Good luck!

Yeah, I’m back…believe it!

Filed under: Uncategorized — Amy Kleinpeter @ 2:45 pm

After one rockin’ post, I am back in the saddle.  Or I should say I am in the saddle shop, looking for a saddle that fits and I am going to BUY it and bring it home and please someone help me stop this metaphor before it takes over this little post.  This blog shall soon have many posts, sometimes more than one a day, on various consumer issues from bankrutpcy to employment (or loss of employment) to debt collection harassment, credit reports — whatever is interesting (to me) and either in the news or on my mind.

February 12, 2007

Welcome to Everyday Law!

Filed under: Uncategorized — Amy Kleinpeter @ 6:50 am

I feel like I should be welcoming myself — I am new to blogging and you are all probably old hat at reading. So I am the new one here. Newness aside, I do have some things to say and information to provide that I know can be helpful to people. I just hope to be entertaining enough to keep people reading.

Someone recently gave me an opportunity to speak very briefly on one of my areas of expertise — consumer bankruptcy. The topic was “Common mistakes I see my clients make”. The difficulty was in keeping my advice brief! My clients are all wonderful people, but they are not experts in bankruptcy. Why would they want to be? They have their own full lives to run. My job as an attorney is to help them decide if a bankruptcy would help their financial situation and then help them to successfully GET that bankruptcy and the fresh start it offers.

Unfortunately, sometimes people do things before seeing a lawyer that just dig themselves deeper into trouble, and that was what I hope this blog can be about.

Before you are at a point where you need an attorney, there are still bits of law that are useful to know. Being familiar with the law, whenever it intersects with your daily life, can keep you out of court and out of trouble. The areas of law I know best are three:

(1) consumer bankruptcy;

(2) consumer law, including fighting harassment and intimidation by debt collectors; and

(3) employment law, especially fighting discrimination in the workplace and protecting whistleblowers.

I hope to have some guest bloggers on here sometimes as well — attorneys who can add information relating to car accidents, copyrights, divorces, child custody and wills. But for now, I think I will have a lot to say on my own.

— Amy Kleinpeter

Clark Kleinpeter Law

Pasadena, California


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