Social Security Reminder

Your Social Security benefits were not meant to be used to pay off a credit card debt in Small Claims Court.  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. August 15, 1953 is the anniversary of when President Franklin D. Roosevelt signed the Social Security Act into law, providing financial assistance for the elderly, the blind, the disabled, and the unemployed.  While everyone should pay their bills, people have to be able to stay in their homes, feed themselves, and put gas in their cars.  Therefore, do not promise Social Security income to cover a collection judgment; claim an exemption instead. Seek competent legal advice to learn more about exemptions from judgment.  You can learn more at St. Johns County Legal Aid at 222 San Marco Avenue in St. Augustine (no appointment necessary to pick up a free pamphlet about collection exemptions and how to claim them).  Even if you do not qualify for Legal Aid, they have a lot of pamphlets […] Read More

Exempt Incomes from Money Judgments

Money can’t buy happiness, but it sure makes misery easier to live with.  That is the idea behind Social Security, disability, pensions, and income that provides more than one-half the support for dependant or minor children—those are exempt incomes from money judgments. Small Claims Court can be a lot bigger than you think.  Even though it only deals with matters less than $5,000, that can be a big claim if you have limited means. Everybody should pay their debts, but you should not have to decide whether to buy food or pay the electric bill.  Thus there are certain incomes that are exempt from money judgments. The key to an exemption is that you have to claim it.  Just because you are eligible for a collection exemption does not mean you automatically receive it.  Exemptions have to be filed within 20 days of the Notice of Garnishment that you receive after your account has been frozen. A Judgment is bad, but ignoring it is worse.  Seek competent legal advice to learn more about collection exemptions.  (You do not need an appointment to pick up a pamphlet at Legal Aid about collection exemptions and how to claim them.) Read More

No Defense? No Problem

Debt collectors are standing by to take up to 25% of your paycheck.  Did you have trouble paying your credit card bill?  Maybe you did not notice the Small Claims Court suit filed against you (or you did not know what to do about it)?  No problem.  If you did not show up to your court date the debt collector has a simple remedy:  Get a default judgment against you that allows him to take 25% of your paycheck every payday. That is no big deal, right?  After all, what is a quarter of your earnings?  What would you use that money for anyway—Rent?  Groceries?  Gas to get to work?  Everybody can give up 25% of their net income, right? Everybody should pay their bills; however, you should not have to decide whether to pay your credit card bill or put food on the table.  There are exemptions you can file to protect certain incomes so that you can pay for basic needs.  Exempt incomes include: Income of head of household at a certain level Social Security benefits Pension Disability The key to an exemption is you have to claim it.  Even if you have an eligible exemption, you do […] Read More

Payback is Heck with Consumer Debt

Being in debt is bad.  Having up to 25% of your wages garnished, or having your bank account swept clean without advance notice can be a life-affirming experience…not in a good way. In Florida, debt collectors can take up to 25% of your net pay for things like old credit card debt, medical bills, and/or student loans.  Or they can sweep your bank account for the amount that you owe without prior notice—you wake up one day and whatever you owe them, that money got disappeared.  Later when you receive that notice of garnishment, you also get a form to file for exemption.  Everyone should pay their bills, but you have to be able to stay in your home, feed yourself, and put gas in your car—that is why certain incomes are eligible for exemption, like head-of-household at a certain level, pension income, Social Security benefits, or disability. 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 […] Read More

Debt-Buyer Business Model

Buying delinquent consumer accounts has bloomed into an industry unto itself with its own business model, which thrives on certain practices, such as the following: * Purchase thousands of delinquent accounts for pennies on the dollar.  This gives debt-buyers a spreadsheet of data, which they do not verify; they purchase without representations or warranties as to the accuracy of the information.  They do not know if the balance stated is correct, or if anything is owed at all. * Contact the consumer.  Contact the consumer a lot!  While there are regulations on fair debt collection practices, not all debt collectors are interested in fair debt collection.  The debt-buyer calls and writes to settle the account…and if that does not work: * File a Small Claims lawsuit.  A Small Claims Court notice can get lost in the paperwork shuffle, and the consumer does not show up for court (or does not defend) and the debt-buyer wins by default. * If the consumer does take time off work to launch a defense, ask for a continuance.  Repeat delay tactics until the consumer stops coming to court. * Have a judgment entered against the consumer.  That judgment is good for 20 years, so […] Read More

What’s In Your Wallet?

Whether it is your paycheck or bank account, debt-buyers are standing by.  While garnishment used to be the purview of child support, it has begun to share the spotlight with debt-buyers, and in Florida, they can take up to 25% of your net income, or sweep your bank account for everything in it. Debt-buyers purchase delinquent accounts in bulk for pennies on the dollar.  Their business model is a numbers game:  they know they will not collect on every account, but they have so many of these accounts that they will make a profit, despite their losses.  Furthermore, if they can get a money judgment against you, they can wait up to twenty years to collect. Often these are delinquent accounts that wind up in Small Claims court for amounts less than $5,000—old credit card debts and medical bills.  The claim may not start as a large amount, but the interest piles up. Just because you owe money does not mean you lack rights. Consumer debt comes with a lot of paperwork.  A Small Claims Court notice can get lost in the shuffle, the consumer does not show up in court (or does not defend) and the debt-buyer wins by […] Read More

Time Machines in Credit Card Contracts?

There was a young lady who bought shoes in bulk, that way she got a discount and always had something to wear on her feet.  The purchase landed on her credit card statement as a big debt.  The young lady wondered how she would ever foot the bill. She took steps to pay off the debt—she got a job and put herself on a budget.  Little by little she began to reduce her debt balance, but her account went delinquent because she had other bills to pay as well, like rent and food and gas.  Then the young lady got sued in Small Claims Court on the credit card contract. The problem was that the credit card company had charged off the debt in 2004, but the credit card agreement was copyrighted in 2006.  “How are you suing on Contract?” the young lady’s attorney asked, at which point the debt collector got back in his time machine and disappeared from the lawsuit. Just because you owe money does not mean you lack rights.  Seek competent legal counsel to properly assert your consumer rights. Read More

Not Going Anywhere for 20 Years?

The standard operating procedure in credit card debt is not to be sued by your credit card company, but instead by a third-party debt-buyer.  Most consumers arrive at Small Claims Court and the Judge says:  “Do you admit or deny the claim?”  They admit it, saying they need time to pay; then they make a repayment plan with the debt-buyer.  Instead of asking for verification, most consumers rely on third-party debt-buyers to have their facts straight.  That can be a costly silence. When you get a credit card, you sign a credit card agreement that says you agree to the terms of that contract.  That is not what the debt-buyer sues you on.  Instead of suing you on the credit card debt or contract debt, the debt-buyer sues on Account Stated. For debt-buyers it is a numbers game.  They buy millions in debt for pennies on the dollar.  They purchase a spreadsheet of data without representations or warranties, and they do not necessarily know that the information is correct.  The debt-buyer does not know if you owe anything or not. When pushed to a trial with live testimony, the debt-buyers lose.  In Small Claims Court we like to agree to […] Read More

Social Security & Small Claims Court

August 15, 1953 President Franklin D. Roosevelt signed the Social Security Act into law, providing financial assistance for the elderly, the blind, the disabled, and the unemployed.  This year the Social Security Administration projects that over 59 million Americans will receive almost $863 billion in Social Security benefits…none of that is meant to be used to pay off a credit card debt 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 […] Read More