the worldwide leader in providing electronic news and information to the accounts receivable management industry, announced today that it will partner with the Best Companies Group to determine the Best Places to Work in Collections. insideARM’s Best Places to Work program recognizes employers that have the most engaged and satisfied employees.
Applications are now being accepted from U.S. collection agencies, collection law firms, and vendors that provide technology and services to these groups. Companies must have at least 15 U.S.-based employees, and nominations must be received by August 15. Learn more about the program and nominate your company at www.bestplacestoworkcollections.com.
The top companies will be determined through employer reports and comprehensive employee surveys and will be selected from three categories: small companies of 15-25 employees, medium-sized companies of between 25 and 249 employees, and large-sized companies consisting of 250 or more employees.
The Best Companies Group, which has overseen similar programs in other industries, as well as many states, is responsible for the selection process. The basis for this initiative is Fortune magazine’s noted “100 Best Companies to Work for in America.”
“Numerous studies show a strong correlation between profitability and creating a good place to work,” says Peter B. Burke, President of Best Companies Group. “In addition to the positive effect the award has on their employee relations and recruitment, the driving force for companies to join in this program is the remarkable effect that workplace improvements can have on their bottom line.”
“Given our long history of involvement in this industry, we know that the collections community has many first-rate employers. The Best Places to Work in Collections program is one way we can recognize them for their important efforts,” states insideARM.com Publisher Stephanie Eidelman.
All companies participating in the program receive a free overview report, and have the opportunity to purchase an evaluation identifying strengths and weaknesses according to their employees. In turn, this report can be used in developing or enhancing employee retention and recruitment programs.
The winning companies will be announced online and in insideARM.com newsletters in January 2009.
Wednesday, July 30, 2008
Friday, July 25, 2008
Stalled projects hamper flood recovery
Two years after the floods of 2006 devastated the Tier, a number of items designed to reduce the chance of a similar catastrophe sit unfinished -- and in some cases, not started.
In most cases, officials blame a lack of money. In another case: timing. In a third, a bad computer set a project back months.
Any way you slice it, several projects have yet to come to fruition, despite having been touted shortly after the region began digging out from the catastrophe that killed four people, destroyed 1,100 homes and caused at least $175 million in damage.
In Broome County alone:
* Residents of Union's Fairmont Park neighborhood have known for years that one of the levees standing between them and the next flood is shorter than it needs to be. But the town has been unable to get $350,000 or so to fix the problem.
* More than a dozen low-income families in Vestal, Conklin and two other towns still need buyouts of their flood-ravaged homes. But it's unclear if the money in a new state program will meet the need.
* People to the north and south of the Susquehanna River near Washington and State streets in Binghamton are no better protected by their floodwalls than they were in 2006. The sealing of cracked concrete, delayed last year while officials waited for answers on a grant application, hasn't started.
* A floodwall that needs raising near Binghamton's Crowley Foods remains untouched. An Army Corps of Engineers study conducted in 2006 recommended the work.
"Some of this should be a no-brainer," Union Town Supervisor John Bernardo said. "To the people who've been affected by the floods, protection is priceless."
Sunday, July 20, 2008
HMV recovery on track thanks to games
HMV has told investors that its recovery in on track as Britain's biggest music retailer reported a jump in pre-tax profits.
The company, which also owns book chain Waterstones, said this morning that strong demand for video games helped drive pre-tax profits up about 25pc to £56.6m for the 12 months to April 26. Sales climbed to £1.87bn from £1.68bn.
Analysts at Panmure Gordon welcomed the results, saying "the second year of recovery starts from a good place, with a debt-free balance sheet and strong market share growth.It's going to be difficult, given the challenging markets that it operates in, but we do believe that there is substantial self help opportunity here."
HMV UK and Ireland saw like-for-like sales up 11.4pc while Waterstones' sales increased by 3.3pc.
Games and technology sales soaerd 21pc as the British appetite for computer games showed no sign of abating, with Grand Theft Auto and the Nintendo Wii proving popular amongst gamers.
Despite the group facing stiff competition from music downloads online sales from HMV.com increased by 42pc.
Last year, HMV launched a three-year turnaround plan which it hoped would allow it to successfully compete against Internet retailers and supermarkets.
Simon Fox, Chief Executive, said: "One year into our transformation plan group profits are up by 25pc and we are ahead of where we expected to be.
"We still have much to do, and whilst we are mindful of the challenging economic outlook, the current financial year has started in line with our expectations and I remain confident that we are building a better and stronger business that can prosper in a rapidly changing market."
The group also said its debt had virtually been eliminated by the sale of its Japanese business.
A final dividend of 5.6p will be paid on 10 October making a total dividend of 7.4p and is unchanged from the previous year.
Monday, July 14, 2008
Credit crunch yet to bite, says consumer debt industry
Research sponsored by Firstsource, a global business process outsourcing company, indicates that the credit crunch has not yet had a major impact on the consumer debt management industry. More than a quarter of respondents (26 per cent) said they had not been affected by the declining economic environment, and over half (53 per cent) reported that they had monitored only minimal impact.
The poll covered nearly 1,000 consumer debt managers of companies in the financial services, telecommunications, retail, and utility industries.
However, although debt managers say they have not yet been significantly affected by the credit crunch, the research showed signs that consumers are starting to take longer to pay their bills, and that write-offs of consumer debt are increasing. Twenty seven per cent of respondents said that some consumers are delaying payment of bills by up to three months, and twenty two per cent of debt managers reported that they had increased their write offs of customer debt in the last 12 months.
In response to the uncertain economic outlook, debt managers expect to outsource more work to specialist collections and recovery agencies to increase their collections levels, reduce defaults, and lower their costs. Sixty eight per cent of debt managers said they planned to increase their use of outsourcing within the next year; 27 per cent said they would outsource more within the UK, 18 per cent reported they would collect more from offshore, and 23 per cent expect to outsource more both within the UK and offshore.
Matthew Vallance, Firstsource’s President, said: “Although most consumer debt managers report that they haven’t been rocked by the credit crisis, the trend amongst consumers is towards later payments which will consequently affect cash flow. Therefore debt managers are looking to specialist consumer debt collections and recoveries outsourcers in the UK and offshore that have the expertise and resources to collect more debt, in faster time frames and at lower cost than is possible in-house.”
Debt managers said that the main benefits of an offshore strategy are further cost reduction, the ability to recover more debt, and increased access to talent.
Most of the collections work that has been outsourced to date is debt collection (35 per cent of respondents), tracing (identifying and prioritising debtors to contact, 25 per cent) and legal collections (24 per cent). The majority of outsourced collections relates to early stage work (debt that is one to 60 days old, 42 per cent of respondents), followed by recoveries (six months, 26 per cent), late stage (90 to 180 days, 21 per cent), then mid stage (60 to 90 days, 10 per cent).
Respondents said that there were many areas where they could see obvious rooms for improvement in their collections strategies. The main failings relate to poor use of technology. Over half of debt managers said greater use of online payment systems would improve their collections levels. Many managers also felt that they should make more use of interactive messaging and interactive voice recognition systems. Better analysis of customers’ debt levels and internal training were two other key areas identified for improvement.
About Firstsource
Firstsource (www.firstsource.com) is a global BPO (business process outsourcing) service provider headquartered in India with operations in India, US, UK, Argentina and Philippines. Firstsource provides customised business process management to the world's leading companies in Banking & Financial Services, Telecom & Media and Healthcare sectors. Its clients include Fortune 500 banks, telecommunications companies and healthcare companies. Firstsource is listed on India's leading exchanges, the NSE (NSE:FSL) and the BSE (BSE: 532809).
Firstsource has an established collections and recoveries practice, providing the full life cycle of collections and recoveries services from early stage collections to third party recoveries, to a wide range of financial services, telecommunications and utilities companies.
Amongst Firstsource’s client list is the credit card operation of a leading UK retail bank. Firstsource collects more than £2.5m per month, with Firstsource agents making between 34-40 calls per hour, collecting on average £550 per hour, with a promises kept rate of around 70 per cent. Average kept value of each call is £260.
For a major UK telecoms company, Firstsource makes 6-7,000 outbound calls every day and has radically improved collections rates, achieving the highest collections per day compared with the in-house operations.
Survey methodology
956 senior professionals from the consumer credit industry took part in the online survey which tool place in April 2008. The types of businesses polled included banks, mortgage lenders, finance companies, utilities companies, credit card operators, insurers, retailers and telecommunications companies.
The poll covered nearly 1,000 consumer debt managers of companies in the financial services, telecommunications, retail, and utility industries.
However, although debt managers say they have not yet been significantly affected by the credit crunch, the research showed signs that consumers are starting to take longer to pay their bills, and that write-offs of consumer debt are increasing. Twenty seven per cent of respondents said that some consumers are delaying payment of bills by up to three months, and twenty two per cent of debt managers reported that they had increased their write offs of customer debt in the last 12 months.
In response to the uncertain economic outlook, debt managers expect to outsource more work to specialist collections and recovery agencies to increase their collections levels, reduce defaults, and lower their costs. Sixty eight per cent of debt managers said they planned to increase their use of outsourcing within the next year; 27 per cent said they would outsource more within the UK, 18 per cent reported they would collect more from offshore, and 23 per cent expect to outsource more both within the UK and offshore.
Matthew Vallance, Firstsource’s President, said: “Although most consumer debt managers report that they haven’t been rocked by the credit crisis, the trend amongst consumers is towards later payments which will consequently affect cash flow. Therefore debt managers are looking to specialist consumer debt collections and recoveries outsourcers in the UK and offshore that have the expertise and resources to collect more debt, in faster time frames and at lower cost than is possible in-house.”
Debt managers said that the main benefits of an offshore strategy are further cost reduction, the ability to recover more debt, and increased access to talent.
Most of the collections work that has been outsourced to date is debt collection (35 per cent of respondents), tracing (identifying and prioritising debtors to contact, 25 per cent) and legal collections (24 per cent). The majority of outsourced collections relates to early stage work (debt that is one to 60 days old, 42 per cent of respondents), followed by recoveries (six months, 26 per cent), late stage (90 to 180 days, 21 per cent), then mid stage (60 to 90 days, 10 per cent).
Respondents said that there were many areas where they could see obvious rooms for improvement in their collections strategies. The main failings relate to poor use of technology. Over half of debt managers said greater use of online payment systems would improve their collections levels. Many managers also felt that they should make more use of interactive messaging and interactive voice recognition systems. Better analysis of customers’ debt levels and internal training were two other key areas identified for improvement.
About Firstsource
Firstsource (www.firstsource.com) is a global BPO (business process outsourcing) service provider headquartered in India with operations in India, US, UK, Argentina and Philippines. Firstsource provides customised business process management to the world's leading companies in Banking & Financial Services, Telecom & Media and Healthcare sectors. Its clients include Fortune 500 banks, telecommunications companies and healthcare companies. Firstsource is listed on India's leading exchanges, the NSE (NSE:FSL) and the BSE (BSE: 532809).
Firstsource has an established collections and recoveries practice, providing the full life cycle of collections and recoveries services from early stage collections to third party recoveries, to a wide range of financial services, telecommunications and utilities companies.
Amongst Firstsource’s client list is the credit card operation of a leading UK retail bank. Firstsource collects more than £2.5m per month, with Firstsource agents making between 34-40 calls per hour, collecting on average £550 per hour, with a promises kept rate of around 70 per cent. Average kept value of each call is £260.
For a major UK telecoms company, Firstsource makes 6-7,000 outbound calls every day and has radically improved collections rates, achieving the highest collections per day compared with the in-house operations.
Survey methodology
956 senior professionals from the consumer credit industry took part in the online survey which tool place in April 2008. The types of businesses polled included banks, mortgage lenders, finance companies, utilities companies, credit card operators, insurers, retailers and telecommunications companies.
Thursday, July 10, 2008
The Different Ways To Pay Your Attorney To Collect Your Debts
Probably the biggest reason that small businesses chose to write off bad debt rather than pursue legal debt collection is they hear the age old adage of don’t waste good money after bad ringing in their head. Small business owners have a perception that it will cost them more in attorney’s fees to legally collect a debt than the debt is worth in real dollars. This perception was created by and is perpetuated by the legal profession. Too often attorneys have taken a collection matter for an hourly fee and treated it just like any other piece of litigation without regard for the client or for the debtor they are pursuing. The attorney "works" the file running up the bill without focusing on the ultimate goal of getting the debt paid. The end result is that the client pays three times the amount of the debt in attorney’s fees and at the end of the day only has a piece of paper from the court saying the debtor legally owes them money. In that case, the attorney has done a disservice to both the client and the legal profession.
When a debt collection lawyer takes a case, he should make a fundamental determination of whether the debt is collectable. If the debt is not reasonably collectable, the debt collection lawyer should candidly discuss that with the client and let the client make the decision as to whether or not to pursue the debtor. Once the decision is made to sue the debtor, the debt collection lawyer should devise a plan to get the debt paid. Payment of the debt is the goal and the debt collection lawyer must keep that goal foremost in his mind and in his actions. . The goal is not to milk the client out of fees, nor is it to punish the debtor, nor is it to get a judgment, nor is it harass, intimidate or scare the debtor. The only goal is to get the client paid the most money possible in the shortest period of time. Sometimes, that goal doesn’t even require the lawyer to file a lawsuit and sometimes it requires the lawyer to abandon what he thinks is an excellent suit in exchange for a good settlement. All of that said, once a creditor decides to hire an attorney and sue a debtor, the subject of how to pay the attorney must be discussed.
There are essentially two fundamental ways to pay an attorney; by the hour and as a percentage of what he collects. Some attorneys will only work by the hour. Hourly rates can vary greatly depending upon geography, experience and quality. If you hire an attorney by the hour, you will most likely pay him in one of two ways. The first way is for him to bill you each month for the time he spent working on your case. You should receive an itemized bill telling you exactly what he did, how long it took him and how much it cost you. You would then mail your attorney a check paying that invoice. The second method of hourly billing is to have the client deposit a retainer. A retainer is a sum of money deposited with the lawyer that the lawyer bills against. You should still receive a monthly invoice from the lawyer showing you exactly what he did, how long it took him and how much it cost you, but you will not have to mail him a check. The invoice will also tell you the retainer balance. The items that are negotiable with an hourly charge lawyer are: (1) his hourly rate, (2) the smallest increment of time for which he will bill–if he answers the phone and talks a minute is that charge recorded as a tenth of an hour, a quarter of an hour, etc., and (3) the amount of any up front retainer.
The second way to pay your attorney is as a percentage of what he collects. Most people call this a contingency fee, as his fee is contingent upon him actually collecting something. The client will be responsible for paying expenses such as the filing fee, but not an hourly rate for work the attorney performs. When the attorney collects money from the debtor, he will deduct a percentage as his fee. The amount of that percentage may be determined by the volume of cases that client is placing with the attorney, the dollar amount of the debt sought to be collected or the expected difficulty in collecting the debt. The items that can be negotiated with a continency fee lawyer are; (1) the amount of the percentage, (2) what items will be regarded as expenses and (3) at what point will the attorney’s fee be deducted.
A third way to pay your debt collection attorney is by blending the hourly rate and percentage. There are any number of ways to customize a billing method to suit a client’s needs and ability to pay. A simple method provides for an hourly fee to be charged on each account up to a maximum ceiling at which point the attorney begins working on a continency basis. Another way is to utilize a sliding percentage based upon the amount of the debt.
A fourth way to pay your debt collection attorney is to utilize an attorney fee provision in your contract. Make your customer responsible for paying all of the cost of collection, including a reasonable attorney’s fee, if collection becomes necessary. The attorney would then be paid a percentage of the debt (as determined by the court) in addition to recovery of 100% of the balance of the debt. The attorney then keeps that amount as a court awarded attorney’s fee.
A fifth way to pay your debt collection attorney is to exchange services. The act of bartering has experienced a resurgence with the advent of internet web sites like www.craigslist.org. You may be able to pay your attorney by providing the services your business offers in exchange for "free" legal work.
The bottom line is that attorney’s fees should never be an impediment preventing your company from collecting it’s past due debts. If your attorney won’t discuss alternate methods of payment or negotiate fees, find another attorney.
When a debt collection lawyer takes a case, he should make a fundamental determination of whether the debt is collectable. If the debt is not reasonably collectable, the debt collection lawyer should candidly discuss that with the client and let the client make the decision as to whether or not to pursue the debtor. Once the decision is made to sue the debtor, the debt collection lawyer should devise a plan to get the debt paid. Payment of the debt is the goal and the debt collection lawyer must keep that goal foremost in his mind and in his actions. . The goal is not to milk the client out of fees, nor is it to punish the debtor, nor is it to get a judgment, nor is it harass, intimidate or scare the debtor. The only goal is to get the client paid the most money possible in the shortest period of time. Sometimes, that goal doesn’t even require the lawyer to file a lawsuit and sometimes it requires the lawyer to abandon what he thinks is an excellent suit in exchange for a good settlement. All of that said, once a creditor decides to hire an attorney and sue a debtor, the subject of how to pay the attorney must be discussed.
There are essentially two fundamental ways to pay an attorney; by the hour and as a percentage of what he collects. Some attorneys will only work by the hour. Hourly rates can vary greatly depending upon geography, experience and quality. If you hire an attorney by the hour, you will most likely pay him in one of two ways. The first way is for him to bill you each month for the time he spent working on your case. You should receive an itemized bill telling you exactly what he did, how long it took him and how much it cost you. You would then mail your attorney a check paying that invoice. The second method of hourly billing is to have the client deposit a retainer. A retainer is a sum of money deposited with the lawyer that the lawyer bills against. You should still receive a monthly invoice from the lawyer showing you exactly what he did, how long it took him and how much it cost you, but you will not have to mail him a check. The invoice will also tell you the retainer balance. The items that are negotiable with an hourly charge lawyer are: (1) his hourly rate, (2) the smallest increment of time for which he will bill–if he answers the phone and talks a minute is that charge recorded as a tenth of an hour, a quarter of an hour, etc., and (3) the amount of any up front retainer.
The second way to pay your attorney is as a percentage of what he collects. Most people call this a contingency fee, as his fee is contingent upon him actually collecting something. The client will be responsible for paying expenses such as the filing fee, but not an hourly rate for work the attorney performs. When the attorney collects money from the debtor, he will deduct a percentage as his fee. The amount of that percentage may be determined by the volume of cases that client is placing with the attorney, the dollar amount of the debt sought to be collected or the expected difficulty in collecting the debt. The items that can be negotiated with a continency fee lawyer are; (1) the amount of the percentage, (2) what items will be regarded as expenses and (3) at what point will the attorney’s fee be deducted.
A third way to pay your debt collection attorney is by blending the hourly rate and percentage. There are any number of ways to customize a billing method to suit a client’s needs and ability to pay. A simple method provides for an hourly fee to be charged on each account up to a maximum ceiling at which point the attorney begins working on a continency basis. Another way is to utilize a sliding percentage based upon the amount of the debt.
A fourth way to pay your debt collection attorney is to utilize an attorney fee provision in your contract. Make your customer responsible for paying all of the cost of collection, including a reasonable attorney’s fee, if collection becomes necessary. The attorney would then be paid a percentage of the debt (as determined by the court) in addition to recovery of 100% of the balance of the debt. The attorney then keeps that amount as a court awarded attorney’s fee.
A fifth way to pay your debt collection attorney is to exchange services. The act of bartering has experienced a resurgence with the advent of internet web sites like www.craigslist.org. You may be able to pay your attorney by providing the services your business offers in exchange for "free" legal work.
The bottom line is that attorney’s fees should never be an impediment preventing your company from collecting it’s past due debts. If your attorney won’t discuss alternate methods of payment or negotiate fees, find another attorney.
Saturday, July 5, 2008
How to Not Pay Your Debt or Beat a Collection Suit
I really shouldn’t tell you this at all. I could get excommunicated from the fraternal order of blood sucking collection attorneys. But in my purpose I told you I would tell both sides of the story and so I will. This article comes with a giant very real DISCLAIMER. This article does not and is not meant to give legal advice. I am not YOUR attorney and we have no attorney client relationship. If you use any of the information imparted by this article, you do so at your own risk and I strongly urge you to consult your own attorney.
What do you do now if you don’t want to or simply can’t pay the debt? The very first thing you do is request a Federal Fair Debt Collection Practices Act debt VERIFICATION. You do this for two reasons. First and most importantly, it buys you some time. Under the FDCPA, all collection activity must cease until the attorney puts that verification in the mail to you. The verification is usually a simple statement signed by the creditor and it will not take the collection attorney long to obtain it. But for that brief period, nothing will happen. Secondly, it sends a signal to the collection attorney that you are not going to be a roll over debtor. He knows you will be active in the defense of the suit. A high percentage of collection suits simply proceed to default judgment without any response from the debtor. This request moves you out of that category. Now, some simple advice. Don’t use a form from the internet to make the FDCPA verification request. I’ve seen a lot of them lately and they ask for information and documentation the FDCPA doesn’t require the collection attorney to give you. That tells the collection attorney you really have no idea what you are doing. The form letters also make threats which simple irritate the collection attorney. And perhaps simplest enough, they are wrong. The FDCPA operates on the least sophisticated debtor standard so you don’t have to be fancy. Just make sure you do it in writing and I’d send it certified mail. Simply ask the attorney to verify the debt in accordance with the FDCPA. Next, don’t be antagonistic or stupid. Don’t threaten the lawyer or lie. Don’t threaten to sue him or report him to the Bar or say you have an attorney if you don’t. These tactics don’t intimidate collection lawyers and simply mark your file for extra special attention. Finally, a certified mail written request for an FDCPA verification may end the collection process. That is true in a very small percentage of cases, but it is worth taking as a first step.
This needs to be a statement in WRITING that you FILE with the court where you have been sued. It can be a simple statement, but it needs to be typed, signed, notarized, filed with the clerk of the court and a copy sent to the collection lawyer. It needs to be a graduated denial. In other words, it needs to say, I deny this is my debt and if it is my debt, I deny that it is still a valid debt and if it is a valid debt, I deny the amount sued for is the correct amount. The sworn denial is a powerful tool. It eliminates the Sworn Affidavit of Account. The vast majority of collection suits proceed without a witness for the creditor The collection attorney enters an affidavit signed by the creditor that the debtor owes the debt and that is this amount. With that affidavit in hand, the court gives the creditor a judgment. When a sworn denial is filed, the debt collection attorney can not rely upon a sworn affidavit of account, but must instead produce a live witness to testify about the debt. The requirement of a live witness changes the dynamic of the collection action considerably. The likelihood that the action will go no further now increases again.
The third step is to file DISCOVERY. This is more difficult than simply filing the Sworn Denial. You need to file a written Request for Production of Documents asking for a copy of the contract or agreement upon which the debt is based. If the debt is a credit card debt, it is likely that the debt collection attorney will not be able to secure a copy of the original agreement or if he is, he will not be able to do so timely. Most credit card signature agreements are scanned or if older, microfilmed and stored away in electronic archives. If it is an old debt which has been sold to a debt purchaser the likelihood of retrieving the original signed agreement decreases dramatically. If you are being sued in a small claims type court where discovery is not permissible, ask for the agreement at trial.
The fourth step is TRIAL. SHOW UP! I can’t stress that enough. As I’ve said repeatedly, the vast majority of debt collection suits proceed to default judgment because no one shows up to dispute them. Show up and ask for a trial. And remember, the worst thing that can happen is the same thing that would have happened if you hadn’t appeared at all, a judgment. You can’t make it worse. If the attorney doesn’t have his live witness available, oppose the case being continued. Tell the judge you’ve taken off work to be there and are ready to go forward. If the judge does continue the case to a new trial date, show up again. You will need to educate yourself. You won’t be able to equip yourself to spar with an attorney, but knowing a little is better than knowing nothing. You will need to read the Rules of Procedure that govern the court and the Rules of Evidence for that jurisdiction. Look them up online. The Rules of Civil Procedure will govern how the trial is conducted. The Rules of Evidence will govern what the Judge is allowed to see and hear. If you do have a trial and the creditor produces a live witness, attack the witness first and the debt second. The witness can only testify from personal knowledge. Generally, the witness has no personal knowledge about you or your account, but only knows what’s in the file he got from the collection department. If he is going to testify without personal knowledge, but from the records and documents of the business, then he has to have a basis to do so. He needs to be the regular keeper of those books and records and be familiar with how they are kept and their contents. Don’t simply accept his answer when the debt collection lawyer asks him if he is the regular keeper of those books and records and be familiar with how they are kept and their contents and he says yes. Ask him how long he has been with the company, in that job, what he does on a daily basis, when he first saw your file, if he knows from personal knowledge if it’s a complete file, etc. You must destroy his credibility and ability to testify about the papers he has in front of him. If you can do that, then the debt collection attorney has no case. If the witness is actually a good witness and you can’t prevent him from testifying from your file, then you need to know your defenses to the debt. The best defense is the Statute of Limitations. The Statute of Limitations is the time limit that an aggrieved party has in which to file a lawsuit. It is a drop dead deadline. Find out what your states is and whether the creditor is beyond that date. If they are, ask the court to dismiss the suit.
What do you do now if you don’t want to or simply can’t pay the debt? The very first thing you do is request a Federal Fair Debt Collection Practices Act debt VERIFICATION. You do this for two reasons. First and most importantly, it buys you some time. Under the FDCPA, all collection activity must cease until the attorney puts that verification in the mail to you. The verification is usually a simple statement signed by the creditor and it will not take the collection attorney long to obtain it. But for that brief period, nothing will happen. Secondly, it sends a signal to the collection attorney that you are not going to be a roll over debtor. He knows you will be active in the defense of the suit. A high percentage of collection suits simply proceed to default judgment without any response from the debtor. This request moves you out of that category. Now, some simple advice. Don’t use a form from the internet to make the FDCPA verification request. I’ve seen a lot of them lately and they ask for information and documentation the FDCPA doesn’t require the collection attorney to give you. That tells the collection attorney you really have no idea what you are doing. The form letters also make threats which simple irritate the collection attorney. And perhaps simplest enough, they are wrong. The FDCPA operates on the least sophisticated debtor standard so you don’t have to be fancy. Just make sure you do it in writing and I’d send it certified mail. Simply ask the attorney to verify the debt in accordance with the FDCPA. Next, don’t be antagonistic or stupid. Don’t threaten the lawyer or lie. Don’t threaten to sue him or report him to the Bar or say you have an attorney if you don’t. These tactics don’t intimidate collection lawyers and simply mark your file for extra special attention. Finally, a certified mail written request for an FDCPA verification may end the collection process. That is true in a very small percentage of cases, but it is worth taking as a first step.
This needs to be a statement in WRITING that you FILE with the court where you have been sued. It can be a simple statement, but it needs to be typed, signed, notarized, filed with the clerk of the court and a copy sent to the collection lawyer. It needs to be a graduated denial. In other words, it needs to say, I deny this is my debt and if it is my debt, I deny that it is still a valid debt and if it is a valid debt, I deny the amount sued for is the correct amount. The sworn denial is a powerful tool. It eliminates the Sworn Affidavit of Account. The vast majority of collection suits proceed without a witness for the creditor The collection attorney enters an affidavit signed by the creditor that the debtor owes the debt and that is this amount. With that affidavit in hand, the court gives the creditor a judgment. When a sworn denial is filed, the debt collection attorney can not rely upon a sworn affidavit of account, but must instead produce a live witness to testify about the debt. The requirement of a live witness changes the dynamic of the collection action considerably. The likelihood that the action will go no further now increases again.
The third step is to file DISCOVERY. This is more difficult than simply filing the Sworn Denial. You need to file a written Request for Production of Documents asking for a copy of the contract or agreement upon which the debt is based. If the debt is a credit card debt, it is likely that the debt collection attorney will not be able to secure a copy of the original agreement or if he is, he will not be able to do so timely. Most credit card signature agreements are scanned or if older, microfilmed and stored away in electronic archives. If it is an old debt which has been sold to a debt purchaser the likelihood of retrieving the original signed agreement decreases dramatically. If you are being sued in a small claims type court where discovery is not permissible, ask for the agreement at trial.
The fourth step is TRIAL. SHOW UP! I can’t stress that enough. As I’ve said repeatedly, the vast majority of debt collection suits proceed to default judgment because no one shows up to dispute them. Show up and ask for a trial. And remember, the worst thing that can happen is the same thing that would have happened if you hadn’t appeared at all, a judgment. You can’t make it worse. If the attorney doesn’t have his live witness available, oppose the case being continued. Tell the judge you’ve taken off work to be there and are ready to go forward. If the judge does continue the case to a new trial date, show up again. You will need to educate yourself. You won’t be able to equip yourself to spar with an attorney, but knowing a little is better than knowing nothing. You will need to read the Rules of Procedure that govern the court and the Rules of Evidence for that jurisdiction. Look them up online. The Rules of Civil Procedure will govern how the trial is conducted. The Rules of Evidence will govern what the Judge is allowed to see and hear. If you do have a trial and the creditor produces a live witness, attack the witness first and the debt second. The witness can only testify from personal knowledge. Generally, the witness has no personal knowledge about you or your account, but only knows what’s in the file he got from the collection department. If he is going to testify without personal knowledge, but from the records and documents of the business, then he has to have a basis to do so. He needs to be the regular keeper of those books and records and be familiar with how they are kept and their contents. Don’t simply accept his answer when the debt collection lawyer asks him if he is the regular keeper of those books and records and be familiar with how they are kept and their contents and he says yes. Ask him how long he has been with the company, in that job, what he does on a daily basis, when he first saw your file, if he knows from personal knowledge if it’s a complete file, etc. You must destroy his credibility and ability to testify about the papers he has in front of him. If you can do that, then the debt collection attorney has no case. If the witness is actually a good witness and you can’t prevent him from testifying from your file, then you need to know your defenses to the debt. The best defense is the Statute of Limitations. The Statute of Limitations is the time limit that an aggrieved party has in which to file a lawsuit. It is a drop dead deadline. Find out what your states is and whether the creditor is beyond that date. If they are, ask the court to dismiss the suit.
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