License and Registration

So you received a summons and complaint for a debt collection lawsuit. Before you call the collection attorney, you may want to contact a consumer rights lawyer first. There are two important laws that can drastically impact your collection lawsuit.

The first is MGL c. 93, s. 24A. Under this statute, all debt collectors are required to obtain a license and post a bond with the Commissioner of Banks. If the debt collector doesn't, not only are they not entitled to collect the debt, but any collection attempts is a violation of MGL c. 93A, which entitles you to damages and attorneys fees.

The other law is MGL c. 156D, s. 15.02. Even out of state corporations are required to register with the Secretary of the Commonwealth. This law states that corporations that do business in Massachusetts, but don't register with the Secretary, cannot maintain a lawsuit in a Massachusetts court.

So what does all of this mean for you? If you have been sued by a out of state debt buyer, it could be very likely that that company is neither licensed with the Commissioner of Banks, nor are they registered with the Secretary of the Commonwealth. This means they legally cannot collect the debt against you. In these situations, a lawyer who's experienced in defending debt collection lawsuits can get the case against you dismissed.

I hope this helps and remember to always find out your rights before committing to anything with a debt collector.

Senior Partners for Justice Award

On February 22, 2012, I was very honored to accept the Senior Partners for Justice Meg Connolly MVP Award for recognition of my work with the organization's Fair Debt Collection Clinic held each Wednesday at the Boston Municipal Courthouse.

The Fair Debt Collection Clinic, administered by the Volunteer Lawyers Project, has done a great job representing indigent clients in all phases of debt collection actions. I look forward to assist in their continued success.

A link to past winners of the Meg Connolly MVP Award can be found here: http://www.spfj.org/MVP.htm

The Bankruptcy Discharge and Debt Collection

One of the situations I've seen quite a bit of lately is the collection of debts that have been discharged in bankruptcy. I think there is merit in discussing what potential bankruptcy filers should know about this problem.

One of the primary reasons for filing for bankruptcy is the very strong mechanism of the discharge injunction. Once there's a discharge order, all the debts are eliminated and future collection efforts are enjoined (not allowed).

Seems simple enough, so why the article? Well, many debt collection companies and creditors are incredibly large organizations. They don't really pay attention to an individual bankruptcy filing, they perform systematic checks for debtors who are involved in a bankruptcy. Once a bankruptcy is complete, a debtor no longer appears on these lists and collection begins again.

If you think they shouldn't be allowed to do that, you'd be right. Collecting on a discharged debt is in violation of the bankruptcy discharge injunction. Also, if the collection is being done by a debt collector, then its a violation of the FDCPA too. A debtor who finds themselves in this situation would be entitled to actual and punitive damages.

If you have filed for bankruptcy, or plan to, keep this in mind. You should contact an attorney if you receive a collection letter or call after your discharge. It is not only important for you to enforce your rights, but it's also important to put a stop to a practice that shouldn't be so routine.

Keep Your Records

Today, I just had a case dismissed that had a lesson worth sharing. As with most debt collection defense cases, evidence is the most important issue. The case can take a much different path depending on whether the debt collector has evidence of the debt or if the debtor has evidence of payment or a defense. In this case, the debtor had paid the debt and kept the records of that payment. This turned the case from months of litigation to a pretty quick dismissal.

Most of the time, I encounter clients who make payments on their debts, but do not keep records of those payments. This is a mistake. Sometimes the debt collector will not account for payments made, and without proof of payment, it's very difficult to assert the defense in court. With the advantages of technology these days, its incredibly easy to keep long term records in case you are later sued on the debt. There are a few relatively easy steps to employ this strategy:

Scanner: First, get a scanner. Engadget has a great back to school guide that includes some all-in-one printer/scanner options.

Software: Next you need to get some software to scan your receipts, checks, bank statements, letters, and other documents concerning your debts. I like free options, so there are two programs I like. The first is CutePDF Writer. This is basically a pdf writer. The way it works is it will install as a printer just like any other, but instead of printing to paper, it prints to pdf. Very useful program. The other program is iCopy. This program will let you use your scanner to create the pdfs. Basically all you have to do is set CutePDF as your printer in iCopy. There's an article describing the process here.

Storage: You'll also need a good place to keep these records. I like online storage, that way, no matter what happens, a copy will be kept offsite. The two options I like are Dropbox and Sugarsync. If online isn't your thing, usb drives work well. Sandisk is a pretty good brand.

System: Finally, you need a system. Whenever you have a document needing scanning, scan it and save to your storage of choice. But don't give the file random names that will prevent you from ever finding them again, use a system. First, put the date in a format like Year-Month-Day so Windows will automatically sort them by date. Second include the name of the creditor the document references. Finally, include a short description of the document itself. For instance, let us say you pay a credit card bill online. You'll get a payment confirmation page at the end of the process. When you print it, print it to a pdf on your storage choice and name it "2011-09-28 Discover Credit Card Payment.pdf". If you have multiple accounts with the same creditor, you may want to add the last 4 digits of the account number to the creditor name.

I hope this was informational. I'm sure there are a ton of other ways people manage their records, feel free to share your system in the comments.

Thomas Beauvais, Attorney at Law Wins Trial

I recently took a case that was going to trial based on an automobile rental agreement. As some may know, there's an option for something called a Loss Damage Waiver. If the customer declines the waiver and is involved in an accident, he or she is held entirely responsible for the damage, regardless of fault. What's worse, is there are additional damages (called loss of use) and administrative fees that are tacked on to the actual damage to the vehicle. The rental company, as it seems, also has the discretion to call the damage a total loss at will. As a result, the customer could be on the hook for the entire value of the car, plus additional damages and fees, for a simple fender bender.

This was the situation of my client. She thought it was unfair, and I happened to agree. Just this week, we took the case to trial and won, with the client having to pay nothing. Why? Mostly because the rental company couldn't prove their case at trial.

And this is the real lesson I'd like my readers to take away from this situation. More often than not, Collection Lawsuit Defense cases come down to proof. Often the collectors or their attorneys do not have the required evidence to actually prove the debt. Does this mean you can get away with anything? No. It means that you don't have to put up with being treated unfairly. If you get sued on a debt that you don't believe you owe or the amount is unfair, you should hire a trial attorney who works with these kinds of cases. There's no guarantee you walk away owing nothing, but you should protect your rights. The more people do, the less often oppressive or sloppy lawsuits are filed in the first place.