Small Claims Court is NOT After Your Social Security

The Social Security Act of 1935 began financial assistance for the elderly, the blind, the disabled, and the unemployed.  Since the first Social Security payments in 1937, $11.3 trillion has been paid out in benefits through 2009…none of that was meant for credit card debt settlement in Small Claims Court. Everyone should pay their bills, but you have to be able to stay in your home, feed yourself, and put gas in your car.  Therefore do not promise your Social Security income to cover a collection judgment; claim an exemption instead. If you are living off Social Security, you may be able to claim those benefits as exempt from a debt collection judgment.  The key to that exemption is that you have to claim it.  Just because you are eligible does not mean you automatically get it. Seek competent legal advice to learn more about exemptions from judgment.  (You do not need an appointment to pick up a pamphlet at Legal Aid about collection exemptions and how to claim them.)  Small Claims Court is not necessarily easy, but good legal advice may give you a better outcome. Read More

‘What?’ Another Good Question in Small Claims Court

‘What?’ is a good question for a debt you have already paid off, or is too old to collect, or has been discharged in a bankruptcy.  (It is a great question if you do not owe anybody anything!)  Even if you owe money, you know you owe money, and you receive a small claims lawsuit, ‘What?’ may still be a good question to bring to the pretrial hearing so you can ask about the amount. Asking questions about the debt you owe is not a denial of that debt, and the place to ask is in the pretrial hearing.  If you have a question or disagreement about the amount demanded in a small claims lawsuit, the pretrial hearing is where you let the court know of your uncertainty. Make sure the amount demanded in the lawsuit adds up to your expectations…and does not exceed them!  Reasons to question the amount might include:  What if the company suing me included charges I do not owe?  …Charged the wrong interest rate?  …Included charges for products I did not request? If you feel that the debt is too old to be collected on or that the debt has already been discharged in a […] Read More

Who? – A Good Question in Small Claims Court

‘Who?’ can be a bigger question than it should be in Small Claims Court.  Debt buyers purchase debt from credit card companies for pennies on the dollar, then try to collect the full amount.  With such large growth in the debt collection industry of recent years, often the paper is not in order.  A debt buyer may sue you in Small Claims Court faster than they have the authority to do so.  This is especially troubling if the company that actually owns the debt comes along later and sues you for the same amount. In order to get a debt judgment against you, the Plaintiff should be able to prove they own the debt, you are responsible for the debt (your promise to pay in writing), and the exact amount you owe.  The plaintiff must use proper legal proof, as through business records—not the hearsay of an affidavit they sign that says you owe. If you are not familiar with the name of the company suing you, “Who?” is a good question to ask to make sure they have proper authority over the debt to bring the lawsuit. For other good questions and answers in Small Claims Court, go to […] Read More

‘Testiliars’ in Small Claims Court

Great Britain hosts a competition every year to crown the World’s Biggest Liar.  The winner has to fabricate the biggest fib and make it convincing.  We have the same thing in this country in Small Claims Court. Small Claims Court deals with matters of $5,000 or less, usually in credit card debts.  The problem is the credit card company often sues faster than they put the case together.  The credit card company will send a ‘testiliar.’  Those can be fun to mess with because they appear by phone ready to negotiate a repayment plan–they are NOT prepared to answer questions about the debt, like verification of the amount or terms.  They are unprepared to deal with a legal defense from the debtor (and they may not have a legitimate case). Even in a Small Claims case, a little legal advice could make a big difference.  You may have defenses available and / or you may be eligible for exemptions from a debt judgment.  Seek competent legal counsel before you write checks to somebody who has been racing snails with Prince Charles.  Read More

Credit Card Shoppers in Small Claims Court

If you are a Neiman Marcus shopper, you are no doubt aware of this year’s hundred-grand His and Her watches that come with a trip to Paris and Geneva.  Or—for that somebody who has everything—a half million dollar closet remodel (with silk-lined drawers, fur coat cabinet, walk-in cigar humidor, and wine fridge) may be the only gift option.  Most defendants in small claims court do not fit that tax bracket. Many small claims defendants are caught in the spin cycle of revolving credit:  they spend what they do not have on items they cannot afford, so they charge purchases on a credit card, where the debt racks up large interest fees, and eventually the matter winds up in small claims court. Yes, you should pay your debts.  And yes, you have to have a place to live.  You have to eat, wear clothes, and put gas in your car to go to work.  If you are the head of household at or below a certain income level, you may be exempt from a small claims judgment. Before you sign over your wages, your pension, Social Security benefits, or disability income to a creditor, you might want to find out if […] Read More

Second Chances on Credit

You have 100 un-do’s in Microsoft Word…not so many un-dos with credit card charges. Microsoft Office software including Word, Excel, and PowerPoint, let you use the un-do button100 times…too bad credit cards do not work that way.  You could make up to 100 purchases on the same credit card, and when the credit card bill came, you could realize you do not need that set of golf clubs, or the fabulous new wardrobe, or the latest game system, or the weekend in the Bahamas.  If you could back out of the clubs, the clothes, the electronics, and the travel, you could significantly lower your bill! You do not get a lot of second chances on credit.  Once you have made the purchases, usually you are stuck with the debt.  How you deal with that obligation; however, could determine how fast you can rebuild your credit. Before you declare bankruptcy or give up an exempt income in small claims court, seek legal counsel.  It is a lot easier to get into debt than to pay for it.  Legal guidance may help you navigate the financial and legal challenges of debt obligations, and can help you avoid costly mistakes.  The consequences of […] Read More

LIBOR Scandal – Where Invisible Hand Becomes Visible

The LIBOR scandal neatly tucked between the Olympics countdown and the 60th anniversary of the Queen’s coronation is not exactly the Diamond Jubilee London was looking for.  Bob Diamond of Barclays Bank in London was one of the first in a litany of bank executives allegedly involved in manipulating interest rates through the LIBOR.  The organic self-correction of the market became a self-corruption of the market at the visible hand of Bob Diamond and other big bank officials. LIBOR stands for “London Interbank Offered Rate.”  It is an international financial benchmark used to set interest rates for credit cards, student loans, and yes…home mortgages.  The LIBOR is the reference point of about $550 trillion of interest rates derivatives contracts.  While the upcoming Triple X Olympiad brings together more than 10,000 athletes from over 200 countries, the sun never sets on the interest rates influenced by the LIBOR. “Inspire a Generation” is the motto for the 2012 games, but the torchlight may reach beyond the track and field of this summer’s London events. Read More

Waiting Period After Bankruptcy

You have to wait 20 minutes before you go in swimming after you eat.  You have to wait days before you get a gun.  And if you buy a car too soon after Bankruptcy, your trustee will get cramps. You cannot file Bankruptcy every year like federal income tax.  There is a waiting period to allow you to complete a Bankruptcy plan before you start another one or take out a new loan.  The Bankruptcy waiting period is one of the consequences you need to know and understand before you file. There are other aspects of Bankruptcy which can dramatically affect your life as well.  Good legal counsel can help you evaluate the equity involved and take into account other debts such as credit cards, and future expenses like college loans.  Do not barge into Bankruptcy.  Think about it with good legal guidance. Read More

Commercial Appeal to Dealing with Debt

When you cannot pay your bills, you get depressed.  When you get depressed, you go to seminars.  When you go to seminars, you feel like a winner.  When you feel like a winner, you go to Vegas.  When you go to Vegas, you lose everything and have to sell your hair to a wig shop.  Do not sell your hair to a wig shop…there are other ways to deal with debt. Being in the red is the new black for many Americans.  Those who spent big thinking their smart phone afforded them to order “endeeve” salad, or those who relied on debt to stabilize their expenses as wages dropped widened the gap between the 1% and the other ninety-nine.  Meanwhile, the rich get richer and the have-nots have less. Whether you are behind on your mortgage or slouching into credit card debt, there are legal choices.  Consulting an attorney could save you money and credit.  Do not sell your hair if you do not have to.  Seek competent legal guidance instead. Read More

Credit Card Debt Is So Sketchy

Credit card debt is so sketchy.  You are setting up for a pop shuvit and land flat on your assets.  Suddenly you are grinding the rail of going broke.  Credit card charges do catch up…with interest. You cannot ollie over bad credit.  You cannot skate through debt.  Do you bail and go bankrupt?  Are there alternatives?  “Street” may not be your definition of “Free Style.” If you understand any of this, good for you.  If you are having trouble with the legal terms of debt, seek competent legal advice.  Sometimes a simple pamphlet from Legal Aid is a start, or the Federal Trade Commission website, like their page for those “Knee Deep in Debt:” http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre19.shtm. Read More