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30

Sep 2010

Leslie beats a warrant in debt

Posted by / in Before Bankruptcy, warrant in debt / 46 comments

How Leslie Beat a Warrant In Debt

Leslie, not her real name, came to see me two months ago about filing for bankruptcy.

It was clear, after we looked at her forms and talked it over, bankruptcy would work for her.  It would take a couple months, though, to gather up everything we needed for her bankruptcy to go right through.

But, she had a warrant in debt scheduled for the following week.   If she just ignored it, she was likely to get garnished.   (We didn’t want that.)  So, I told her to go to court, and follow the instructions at my warrant in debt blog.

Leslie went to the courthouse (in the picture) on the “return date” and asked the judge for a trial.  In Virginia, the trial is usually set six or eight weeks later–depending on the county and the judge.

Warrant in debt in Prince William Courthouse

Leslie’s warrant in debt hearing was in the Prince William County Courthouse.

 

She knew to ask for a bill of particulars, and the creditor asked for her grounds of defense.  The bill of particulars under Virginia law is how the creditor plans show the amount of the debt and why there is a debt.

Leslie was in luck–because her creditor was Asset Acceptance, a debt buyer.  Debt buyers often cannot prove what the debt is about or what the amount of the debt really is.   Asset Acceptance proof must have been really weak in Leslie’s case, because they filed nothing at all as their bill of particulars.

So, for her grounds of defense, Leslie wrote to the court and to Asset Acceptance, that they never filed their bill of particulars.  Also, for good measure, she also listed statute of limitations in her grounds of defense.

(The statute of limitations sets a deadline to sue you after you’ve stopped paying debt.  Wait too long, and the creditor is out of luck.)

We expected that would mean Leslie would win at the trial, but she won sooner.

Asset Acceptance wrote to the judge and said they were dropping the warrant in debt case.  Under Virginia law, that’s called a non suit.

Is Leslie home free?  Not quite.  In Virginia law–not like most states–after a non suit, the creditor could come back and try again.  But, we’ll have the bankruptcy filed before that.   (This debt with Asset Acceptance was only a small part of her problem.)

Because of her good work, she now has plenty of time to get ready to file for bankruptcy, without having to worry about getting garnished.

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29

Aug 2010

Before Bankruptcy: Do You Need to Change Banks?

Posted by / in Before Bankruptcy / No comments yet

As a Virginia Bankruptcy lawyer, I often tell my clients to “change banks.” Why?

If you have been hit with and ignored a warrant in debt,  and the return date is past, you may be about to be garnished.  What checking account did you use when you last paid that debt?  Since they know where it is, that’s the one you can expect will be first garnished.  Unless we can file your bankruptcy right away, it’s time to change.

(Changing your account number is not enough.   A garnishment will hit all the accounts you have at that bank.)

You also need to change if have a loan where you bank .   If you are falling behind on your second mortgage–for example–with Bank of America and you save or check with Bank of America, they can dip into your account to pay themselves.   Credit Unions can also pay themselves for credit cards.  Banks can’t.

What do I recommend? I like to say that the universe is full of banks.  You want to go to a bank you never used before.  And one you don’t owe money to.

Some people’s before bankruptcy credit is so bad they cannot open an account at most banks.   I recommend TD Bank, which has a number of locations in Northern Virginia.   I send TD four or five people a months, with no complaints.  Many people  have told me TD is their all-time favorite.

(TD is also right across the street from the bankruptcy court.  They are always very nice when I need change for parking.)

Woodforest Bank, found in some Northern Virginia Walmarts, will also open an account for most people with really bad credit.

Even if they haven’t done it before, your bank, if you owe them money, can freeze your account and help themselves to what you had there the day the bankruptcy was filed.

After bankruptcy, your account is safe.  Being able to keep your money safe from offsets and garnishments is one important reason people file bankruptcy in Virginia.

Here are the steps.  Stop the direct deposit.  Spend down the money you have in your existing account:  pay bills, buy groceries, whatever.  Open a new bank account.  Start the direct deposit going to the new bank.

There’s a very remote danger your bankruptcy could be challenged if you transfer money from the old bank to the new one.  So spend that money on real needs as quick as you can.  Switch the direct deposit to the new bank.

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29

Jul 2010

Before bankruptcy: beating a warrant in debt

Posted by / in Before Bankruptcy, warrant in debt / 66 comments

Bill, not his real name, is filing bankruptcy with me in October.  (He needs a couple more months to finish everything to get his bankruptcy approved.)

Virginia Bankruptcy Lawyer Robert Weed

Virginia Bankruptcy Lawyer Robert Weed

In the meantime, he received a warrant in debt.  Midland Credit Management, a big debt buyer, was suing him on a old Chase card.  He didn’t want to get a judgment and a garnishment while we were waiting for the right time to file the bankruptcy.

Bill knew, from my warrant in debt website, that he had to go to court on his return date, and tell the judge he wanted a trial.  He had an easy basis for saying he wanted a trial.  “I never heard of Midland Credit Management.  I don’t know who they are or what this is about.”

He asked for a bill of particulars, and Midland’s lawyer asked for grounds of defense.

When Midland submitted their bill of particulars, they wrote they had bought the debt from Chase, and Bill owed Chase $4822.

For Bill’s grounds of defense, he wrote to the court and Midland’s lawyer that there were no documents showing that Midland really bought the debt from Chase; and that Midland had no evidence of how much he owed Chase–they would need a witness from Chase to prove that.

Bill was nervous on his warrant in debt trial date, but it was easy.  When they called his name, the lawyer for Midland said, “Your Honor, this is our first dismissal of the day.”  The Judge then turned to Bill and scolded him slightly to be financially responsible.  Then he  said, you won today,  you are free to go.

Bill handled this on his own, but I had given him some tips.  One thing I said, if this is still America, you’ll win.  Nice to know this still is America.

Under Virginia law, Midland would be able to bring the same warrant in debt a second time.  But they won’t be able to move fast enough to beat our October bankruptcy filing.  (And they probably couldn’t prove it then, either.)

When we get to October, his bankruptcy will go fine.

PS  Here’s an update on March 30, 2011.  The Attorney General of Minnesota announced he is going after Midland, and their parent company, Encore.  He says they used robo-signed affidavits to sue people on in Minnesota.  In other words, Midland claimed they reviewed their records and had proof so-and-so owed them money–but nobody actually looked to see whether they really had that proof.  This press release would be something to bring to the attention of the Judge, if you go to court and fight Midland on one of these.

PPS.  Washington Post had a good article on beating Midland in May 2014.

In Northern Virginia, Encore’s Midland unit has filed 16,878 lawsuits from 2003 to March of this year in the district courts of five counties. The company won nearly two-thirds of those cases through judgments against consumers who either failed to appear in court or simply agreed to pay the amount.

Almost 20 percent of those people wound up having their wages garnished, according to a review conducted by The Washington Post. Debts range from as little as $53 to as much as $23,786.

The Post article includes a comment from a guy who calls himself “rogerramjetz.”  He says he used to work as a collection lawyer on exactly those cases.

A guy gets a credit card with an Account Agreement that charges him $137 to open the account the first time he uses the card, and the card has a $250 credit limit. He then buys a $35 iron and a $45 coat at Walmart with the card. He now owes $217 the next month, and when he doesn’t pay the bill, he accrues an interest charge of $5 at 29% interest. When he doesn’t pay the next month, the card accrues a late charge of $35, $5 in interest, and an overdraft fee of $35 a month, totaling $297. The following month, interest is $6, and the late fee is $35 and the overdraft fee is again $35. A year and a half after the initial $80 purchase, the account shows a $1600 balance to Providian Bank. Totally legal.

Providian then sells the debt to Midland for $0.17 on the dollar, or around $200, and gives the last statement the guy received for $1600 as evidence of the debt. Glasser & Glasser in Norfolk is promptly retained to sue the guy for $1600, with interest at 29%, and accrued interest since the default a year before totaling $500, while the Account Agreement is invoked for a “33.3% reasonable attorney’s fee, totaling $533” and court costs of $63.00. An affidavit from Midland and Providian is generated, and a sheriff delivers the Warrant in Debt to the guy.

Total sued for? $2,693, but we will gladly settle for a lump sum of eighty cents on the dollar, or $2,154. For an iron and a coat at Walmart. Or we will take a judgment and garnish 25% of your wages until paid, and in three years the balance will double again at 29% interest.

How do I know this? I worked for Glasser as local counsel.

“Roger’s” example may be extreme but it shows how small debts can lead to fairly big garnishments, with late fees, over limit fees, later over limit fees, legal fees and the rest are added in–the just 29% interest alone doing it’s magic.

What’s the lesson:  Many credit cards in bankruptcy have already been money makers for the credit card companies.   And if you are getting sued by people you never heard of, it’s time to talk to a lawyer.

 

 

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12

Jul 2010

Before bankruptcy: outlaw debt collectors

Posted by / in Before Bankruptcy / 4 comments

People who need  to file bankruptcy are often abused by debt collectors.

CNN Money reported Saturday that complaints against debt collectors to the Federal Trade Commission are up 50% from 2007 to 2009–and up another 15% this year.

“Harassing phone calls, abusive language and physical violence are becoming a bigger part of business as debt collectors struggle to round up money from people who don’t have it,” CNN reported.

People who need  to file bankruptcy sometimes feel too guilty to complain about these illegal threats.  My firm sues five or six debt collectors a month.  Two of three for harassment before bankruptcies are filed.  And another two or three for what they did after bankruptcy.   (There are a handful of lawyers nationally who sue debt collectors a dozen times a month, months after month. )

Most of what we sue on are what the collectors call “technical violations.”  Usually continuing to call after being told to call the bankruptcy lawyer.  Also, sending letters threatening to sue, when they don’t really intend to sue.   (We sometimes see otherwise law-abiding companies make seriously illegal threats when they are talking in Spanish to Spanish-speaking consumers.)

When the consumer is obviously reading from instructions given by his bankruptcy lawyer, most callers know to be careful.

Recently a handful of my bankruptcy clients have gotten threats of immediate arrest.  These are for payday loans that have been sold to outlaw debt collectors.  These outlaws clearly know they are illegal and don’t care.

We sued one of those outfits last falls and got a $10,000 judgment for our client–but there’s no chance to collect it.  (Although they had several US addresses, this outfit may not be in America at all.)

Suing to stop violations only helps when you are suing (mostly) honest people.   Really abusive collectors are just criminals.    Outlaw debt collectors use the telephone to threaten criminal arrest to extort payment.  They violate the Federal extortion statute, 41 USC 875(d).  They can (and should) be imprisoned for two years.

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01

Jul 2010

Watch Out for "Avoid Bankruptcy" Scams

Posted by / in Before Bankruptcy / 9 comments

Bankruptcy should be a last resort.    Most people want to look at all the alternatives before they file bankruptcy.  That makes some people easy victims of “avoid bankruptcy” scams.

I’ve talked to three people in the last ten days who sent ten thousand dollars or more to “debt negotiators.” They stopped when the sheriff brought court papers.  At that point, each one realized they had been scammed.  And they realized it was time to talk to a bankruptcy attorney.

Yesterday, I met Linda–not her real name.  This is her story.

When she signed up with this debt negotiator,  she had $98,000 in credit card debts. They were all current.  She had stayed current by living on the credit cards all month, and then her entire paycheck went to make the minimum payments.  She knew this couldn’t go on.

Ten months later, she got court papers for her$20,000 Bank of American credit card.  She had sent $11,119 over the ten months to the debt negotiator, and they had settled two credit cards for her.  One for $629 and one for $2190.   So, she had paid $8300 in legal fees, to get rid of $2819 in debts.  Not a good deal.

There’s a lot of income in Linda’s family, so she may end up in a Chapter 13 bankruptcy.

She is prepared for the worst case, which is this.  She may have to pay the bankruptcy court $300 per month for five years and have to pay me $3323.  That’s $21,323 to get rid of debts that now (with late fees) are over $110,000.   That’s a good deal.

Best case would be a chapter 7 bankruptcy.  Again about $3400 in legal fees, and the whole $110,000 would be wiped out at once.  That’s really a bargain.  If she had seen a bankruptcy attorney when she first contacted the scammers instead, she would have been an easy chapter 7.  Why is that?  What messes up her income eligibility is the new part time job her husband took on the weekends to try to make the payments.  Without that job, eligibility would have been fine.

I’d like to go after these debt negotiators for false advertising and get that money back.  (At this point it would go to the bankruptcy court to pay a little to the credit cards–but that was what Linda was trying to do with it.)  When I checked, I saw how careful they are to avoid any claim of false advertising.  Look at this:

“Some companies “promise” results and advertise exceptional settlements as commonplace. Legal Helpers Debt Resolution is different; we make no promises and will not guarantee you we can negotiate your debts to a certain percentage. We are experienced attorneys and trained legal advocates and adhere to the following minimum performance standard: If we do not reduce your debt by at least 35% of what you owe, we will refund your fees for settling that particular debt and still resolve the debt on your behalf.”

If you read that carefully–they are bragging that they “make no promises” and “will not guarantee.”  Well, they are telling the truth about that.  So its hard to make a false advertising case against someone who says they promise nothing.

I don’t know what to do.  These outfits have loads of money to spend on advertising, because they charge so much and do so little.   The best I can do is warn you.  If it seems too good to be true, it isn’t true.

My recommendation, if you want to try to avoid bankruptcy and work out lower payments, is Money Management International. They know what the credit card companies will agree to, because basically they were set up by the credit card companies. And they will try to give you an accurate estimate of what they can get your payment, including their fee, down to.

There are a number of other companies that are honest and do the same thing.  The National Foundation for Credit Counselling certifies counselors who a trained and tested on being able to help people, rather than scam them.

People who say they can do better than an NFCC member, in nearly every case, are lying.  What if you talk to Money Management or another reputable credit counselor and they cannot give you the help you need?  Then it’s time to talk to a bankruptcy attorney.

PS.  Just was sent this link to a Government Accounting Office study of these “avoid bankruptcy” outfits.  Thanks to Robert Brandt, a bankruptcy attorney in Alexandria VA, who saw my comments and passed on the study.

PS May 15, 2015

Thomas Macey and Jeffrey Aleman, the two lawyers behind Legal Helpers Debt Resolution, were suspended from the practice of law, by the Illinois Supreme Court, yesterday.   US Justice Department lawyers, who are also chasing Macey and Aleman, said, we’re not done with them, yet.

PPS  March 18, 2016

The Consumer Financial Protection Bureau won $40 million in fines, against Morgan Drexen, one of the biggest debt settlement operations.  They were also ordered to refund $133 million to the consumers they scammed.  You can read about that, here.  It’s not clear how much they will be able to collect.  This shows the CFPB trying to shut down the worst of these scammers.

Also, this week, we collected $1500 from Global Client Solutions.  Global handles the payments for nearly all of the hundreds of debt settlement operations.  They are one of six defendants we are suing on behalf of one of our clients, named Cary.  So far we haven’t heard form the other five.  They are due in court in mid April.  Cary got scammed out of $1133.  We’ve gotten $750 back so far (we got the other $750 for doing the work.)  Virginia law gives her triple damages, so we’re trying to get to $3400.

PPS Federal Trade Commission Shuts Down Some More Scams

The Federal Trade Commission shut down another set of these debt settlement scammers today.  Here are the details.

 


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30

May 2010

Before bankruptcy, does Navy Federal violate Virginia law?

Posted by / in Before Bankruptcy, Virginia Bankruptcy / 3 comments

Before you file bankruptcy, once you have a lawyer, you should tell your creditors when they call, “call my bankruptcy lawyer.”  The law assumes that most companies with a good name will leave you alone at that point.

In my experience that’s true of just about everybody, but not Navy Federal.

Navy Federal’s collection department says they will keep calling you day and night, until the bankruptcy is filed with the court.  And they do.  (Some people told us Navy Federal calls almost hourly until the bankruptcy is filed.)

I think this is a violation of Virginia law.  Code of Virginia § 18.2-429 makes it a class 3 misdemeanor to cause someone’s phone to ring with the “intent to annoy.”  And the law expressly says that it can still be illegal even if there is also an “intent to communicate.”

The punishment in Virignia for a class 3 misdemeanor is a fine of up to $500.

I think its pretty clear that when Navy Federal calls four or five times a day, after being told, “I can’t pay, call my bankruptcy lawyer, I have to file bankruptcy”–that’s calling with the intent to annoy.

This spring, we helped one of our clients sue Navy Federal to get them to stop violating Virginia law.  We didn’t get far.  Just because something is a criminal law violation,  does not mean a private citizen can sue to enforce it.

So, the judge made it clear we would lose, unless we dropped the case.  (Which we did.  We are going after them under Florida law, but that’s for another day.)  But the judge suggested, here on page 13, that we could “bring it back as a criminal offense.”

My before-bankruptcy clients seem to have fewer complaints about Navy Federal than they did this time last year.  Maybe that’s because they have gotten nicer.

Maybe it’s because their lawyers were listening to that judge.  I hope so.

PS October 2016, CFPB slams Navy Fed

Saw in this morning’s Washington Post that the Consumer Finance Protection Bureau went after Navy Fed.  Hit them for $23 million to unfair collection procedures.  I was really glad to see it.  You can read the Post story, here: Navy-Federal-to-pay-23-million.

PPS  January 2018, Navy Fed suddenly polite.

The last week of January brought a nice letter from a now very polite Navy FCU.  

NFCU was writing to tell me that Woodbridge resident “Stevie” asked them to stop calling her, and that they’d do it!  That’s a big change. 

Thank you Navy Federal.  I take back half the bad things I’ve said about you.

 

Here’s the polite letter

Here’s a sample of the polite letter Navy Federal sends now, when you tell them to “call my lawyer.”

 

 

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13

May 2010

Abusive Debt Collectors: The Lies They Tell

Posted by / in After Bankruptcy, Before Bankruptcy / No comments yet

For most people facing the prospect of filing for bankruptcy, it seems that nothing is more stressful than getting behind on your debts. Knowing that you have obligations that you simply cannot meet, bills that you cannot pay—it’s enough to make the average person feel anxious, frustrated, and even helpless. Now imagine a collector calls about one of those debts and threatens you with arrest and imprisonment if you don’t pay. That’s what happened to one of our clients just this past year.

Our client, let’s call her Mary, had gotten behind on a debt with a department store. That debt was later either assigned or sold to a debt collector called Creditors Interchange Receivable Management, LLC.  Creditors Interchange began calling Mary at home. They left several messages on her answering machine telling her that a lawsuit was being “finalized” against her for the department store debt.  In their final message, an employee of Creditors Interchange told Mary “the authorities” were coming to her home and the only thing she would get out of ignoring their messages was a trip to jail.

After weeks of sleepless nights, crying, depression, and fear, Mary’s son convinced her to call our office. She truly believed that Creditors Interchange could have sent her to jail for failing to pay a personal debt. Once we assured her that that was not possible, we started the work of getting her justice under the law.

The law we used to fight on her behalf was the Fair Debt Collection Practices Act (or FDCPA). The FDCPA is the law passed by Congress to protect consumers from abusive debt collectors such as Creditors Interchange Receivable Management, LLC. The FDCPA says generally that a debt collector cannot harass or abuse you, make false, misleading, or deceptive statements to you, or use unfair practices to collect from you.  These protections for consumers apply whether or not you owe the debt about which the debt collector is calling.

In this case, we were able to get Mary an out of court settlement she was more than happy with, and begin the process of making her whole.

No one should have to go through what Mary went through, but if you have, you do have a remedy.

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30

Apr 2010

Navy Federal takes money from children

Posted by / in Before Bankruptcy / 18 comments

Last month, Navy Federal emptied out the savings account where 14 year old Tammy (not her real name) saved the money she made baby sitting.

Tammy’s mom had been out of work for nine months.  She was now two months behind on her second mortgage.  (The second mortgage was from Navy Federal.)  She just got a new job paying half of what she had been making, and she was glad to get that.  But she knew she would not be able to pay the second mortgage and still feed her children.

So Tammy’s mom came to see me about filing bankruptcy.  But she mentioned in passing that Navy Fed has helped themselves to her daughter’s savings account.  How could they do it?

First time I heard of Navy Fed doing this, I was shocked too.  But I figured out how they do it.

Most banks set up children’s accounts under the Uniform Transfers to Minor’s Act, where the parent is the custodian of the account, but the child is the owner.

Navy Fed apparently doesn’t do it that way.  Instead they set up a joint account, with the parent and the child.  This gives them right, as they see it, then to take Tammy’s money to make mom’s payment.

I think that stinks.  The child, by definition, is a child, and hasn’t agreed to co-sign for mom.  So I don’t think the credit union can pretend the little girl did.

I’ll see if I can find a judge who agrees with me on this.

The big lesson of this.  If you lose your job, take your money out of Navy Federal.  And that include’s your children’s money, too.

PS Navy Federal did back down on this when we sued them–and the little girls have their money back. May 2011

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04

Apr 2010

Warrant In Debt – What You Need To Know

Posted by / in warrant in debt / 282 comments

Warrant In Debt

A warrant in debt is what they call it in Virginia when a creditor is suing you in General District Court.  Warrant makes it sound a little worse than it is, but it is bad enough.  It is not a criminal law problem—you can’t go to jail; but they are trying to make you pay.

A creditor wants to make you pay—and if nothing else works, they want to make you pay with a garnishment.  (A garnishment is a court order to your bank or your payroll office to send part of your money to the court instead.)

warrant in debt judge

When the judge asks, do you owe this money, say “Your honor, I want a trial”

In order to get a garnishment, a creditor first has to take you to court and win. Taking you to court starts with sending you court papers. Those papers are the “warrant in debt.”

(They have to sue you in Virginia if you live in Virginia.  Or where you first signed for the debt.  That’s in the FDCPA, a Federal law.  You should keep that in mind when you get threat letters from lawyers. A lawyer in Atlanta GA probably doesn’t come to Virginia to take people to court. A lawyer in Rockville MD probably does. A lawyer in Richmond VA does almost for sure.)

The way you get a warrant in debt is for the sheriff to come around and tape it to your door. Some creditors will also mail you a copy. The warrant in debt will have a return date which is your first court date.  You can find that return date in the upper right hand corner.  (Where it says Hearing Date and Time.)

YOUR FIRST WARRANT IN DEBT COURT DATE

If you admit you owe the money or don’t show up on your first court date, they get a judgment. Ten days after the judgment, then they can get the garnishment.

(You have ten days to note your appeal; but to appeal you have to pay into court the amount of the judgment—that’s probably impossible for you to do.)

Around here, most people don’t show up, so they automatically plead guilty to owing the debt. Ignoring court papers is usually not a good idea.  Especially not in Virginia, where the judges don’t lose sleep over whether you understood what was happening.

(A lot of people call the lawyer for the creditor and ask, do I have to come to court.  And usually the answer to that is no—you don’t have to come to court.  And it’s true—you don’t have to come to court. It’s just if you don’t come to court you plead guilty and they can start garnishing you in ten days.)

Most people who do show up, just plead guilty.

The judge says, “do you owe this money?”

“Yes, but I can’t pay it right now.” Judge, “OK, you can discuss it with that lawyer after court.”

Do that, and you just pled guilty! The ONLY judge who cares about whether you can pay is a bankruptcy judge. Bankruptcy judges worry full time about whether you can pay, so the other judges don’t have to worry about it at all. And they don’t.

If you go on a warrant in debt, you should tell the judge you are not admitting you owe the money and you need time to talk about it with a lawyer. Some judges will really crowd you to just plead guilty, but if you stand your ground they can’t make you. “Your honor, I want a trial.”

“YOUR HONOR, I WANT A TRIAL. AND I WANT A BILL OF PARTICULARS.”

When the judge calls your name, you need to step up behind one of the podiums (the one the collection lawyer isn’t using) and claim your rights under Virginia law (and also the Constitution.) “Your Honor, I want and trial.  And I want a Bill of Particulars.” Your right to a trial is right there, on the Warrant in Debt form. See where it says,  To dispute this claim, you must appear on the return date for the judge to set another date for trial. That’s what you are doing. You are disputing the claim and asking the judge to set another date for trial.

Right under that is place on the form for the Judge to order a Bill of Particulars. The Bill of Particulars is their proof that you owe the money, you owe it to them, and how much you owe. Sometimes they include a lot of that with the warrant in debt. Sometimes they don’t. But either way, it’s worth asking again.

YOUR WARRANT IN DEBT TRIAL

If you show up for your first court date, don’t plead guilty and do ask for a trial, you’ll get a trial date a month or two later. At the trial you need to stop the creditor from proving that you owe the money.  So you should use that month or two to talk to a lawyer, get ready to fight them yourself, or maybe try to work out a payment schedule.

(If you want to work out a payment schedule, you want to show up for court and ask for a trial.  That gives the lawyer for the creditor the idea that you know a little about your rights—and so the lawyer has some reason to be fair to you.)

If you plan to fight them at the trial—with or without a lawyer—you need to first file your grounds of defense.  Your grounds of defense are the reasons you think you don’t owe the money.  At your first court date, the judge will give you a date for your grounds of defense.  Miss that, and, you just pled guilty.

(Virginia’s system makes it easy to plead guilty to owing the money.  Ignoring the first court date—you just pled guilty.  Showing up and admitting you owe the money—you just pled guilty.  Missing your grounds of defense deadline—oops, you just pled guilty.)

So, if you send in your grounds of defense, then you have the right to show up for trial and defend yourself.

The creditor’s lawyer probably appears in that court on hundreds or thousands of cases each year. You’re there for the first time. That gives you an idea your chances of winning without a lawyer are not all that good.

Still you have a better chance if you are being sued by a debt collector—somebody you never heard of like Asset Acceptance, NCO, CG Services, Cavalry Portfolio—rather than being sued by the company you dealt with, like Ford Motor Credit, Bank of America or Fairfax Hospital.  If you know how to object to their evidence and make them prove that they really own the debt, you have a chance of winning.  (Here’s my blog on how Leslie beat a warrant in debt.)

If this debt has bounced around from debt collector to debt collector, you might also win on the statute of limitations.  The statute of limitations means if they left you alone for too long, they are too late.  But they are only too late if you say so.  Statute of limitations is an affirmative defense—meaning you have to show up and argue it; the judge won’t raise it for you.  (And you’d have to put it in your grounds of defense.)

How long is the statute of limitations?  It depends.  The original creditor, especially a credit card company, probably will produce a notice they claim they sent you where you agree that the law of some state you’ve never been to controls the statute of limitations; and they picked that state because it has a long one.

A debt collector, however, may not have any kind of notice, so then you are protected by Virginia’s statute of limitations.  How long is that?  Maybe three years, maybe five.  (Sorry I can’t be more specific than that.)  It depends.

GETTING SUED IN THE WRONG COUNTY

One way to get some leverage on your creditor is if they sue you in the wrong county.  A debt collector—those guys like Asset Acceptance, NCO, CG Services, Cavalry Portfolio—they are required to sue you in the judicial district where you live.  (Or where you signed the contract; meaning where you financed the car, for example.)  In Northern Virginia, each county and Alexandria City is a judicial district.  (Except Loudoun and Fauquier share a district.)

An original creditor who uses a lawyer is bound by the same rules.  The have to sue you in your home county.

If you get sued in the wrong county, that’s a violation of the Federal Fair Debt Collection Practices Act. And you can sue them for violating your rights!

GETTING SUED BY CAPITAL ONE IN RICHMOND

Capital One sues nearly everybody in Richmond.  (Or sometimes Henrico.) They can get away with that, because they don’t use a lawyer.  However, you don’t have to just give up.  And you don’t have to leave Northern Virginia at 5:00 AM driving down I-95 to get to Richmond at 8:30, either.  On the back of the warrant in debt, lower left, it explains that you have the right to object to venue.  If you follow those instructions and say you can’t get to Richmond and ask the judge to please move it to your home county, the judge will nearly always do it.

Then they will show up several weeks later in your home county, with a lawyer.  And so you start from there.

WHAT TO DO WHEN YOU GET A WARRANT IN DEBT

You have some tough decisions.  If the debt is something that you owe—and that you can afford to pay—you should pay it off.  (No, they do not have to accept payment arrangements; by warrant-in-debt time you are way too late for that.)

If you don’t owe it—or are not sure—you should go to court, ask for a trial, and try to find a lawyer who will help with that kind of thing.  (If you Google “Virginia debt defense lawyer,” one Manassas law firm comes up.  Many lawyers who do this kind of work are members of the National Association of Consumer Advocates, and you can check their website here.)

When you go on your first court day, and you tell the judge you want a trial, you should also ask for a “bill of particulars.”  The bill of particulars is their writing proving that you do owe the money.  That will give you some idea about how strong or weak their evidence is.  If you then get a lawyer to help you, he will really want to study their bill of particulars.

If you owe the money but can’t pay, then it’s probably time to talk to a bankruptcy lawyer.  You can find out more about bankruptcy law in Virginia at this website.  I’m Virginia bankruptcy lawyer Robert Weed.

IF I LOSE IN COURT CAN I STILL FILE BANKRUPTCY?

You can still file bankruptcy on most debts even after your trial on the warrant in debt.  (You can’t file bankruptcy and discharge a debt for fraud–for example if they say proved you lied on your credit report, or stole the money.)

There are a couple reasons why its better to file the bankruptcy before.   One is, after bankruptcy your credit report will still show that you had a judgment against you.   That will make it a little harder to get back to good credit.

Second, the judgment may become a lien on your real estate.   (Less likely if you own the real estate as husband and wife.)  The bankruptcy may not be able to get the judgment off.  It depends.

Third, if you wait until after your warrant in debt court date and you get garnished, you may not be able to get that money back.  You sometimes can if you see a bankruptcy lawyer and file your bankruptcy fast enough.

So, if you are thinking about bankruptcy when you get a warrant in debt, its better to talk to a lawyer quickly.

Hope this is helpful.  Good luck.

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