Fighting Debt is Not Always a Losing Battle

Nobody has to tell you that the Tampa Bay area has been going through a rough patch. Even though the government’s economists say that the Great Recession ended in 2009, it sure hasn’t felt that way. It’s felt more like the economy continues to grind along on flat tires and bad bearings while running out of gas. People are still being foreclosed on. Other folks have defaulted on credit cards. And while movements like Occupy Wall Street have begun to focus on debt, the relief they’re looking for on a collective basis has yet to trickle down to anybody.

It’s fine to talk about political action and political solutions, but what about people who owe debt right now? I’m proud to say that in my practice I help people fight debt every day, without bankruptcy and without spending an inordinate amount of money.

Often I am asked to defend a foreclosure case. These should be pretty simple for the banks: the homeowner isn’t paying, so out they go, right? Remarkably, they’re not so simple, and in many cases just filing an answer will slow a case down by a year or more. During this time my client can find a new job or arrange for a new living situation in an orderly way rather than hastily.

In some cases, the banks make errors that allow me to actually obtain a dismissal for the client. The most common reason is failure to prosecute. If the bank just lets a case sit, the court can dismiss it on our request. In other cases, the bank has failed to serve a summons within 120 days of filing the case, another grounds for dismissal.

Increasingly I’m called upon to defend a credit card case. I recently had one dismissed for a client because the creditor had filed suit instead of taking the case to arbitration as the contract called for. While arbitration was once a stick used to beat consumers, the Minnesota Attorney General pressured both of the card companies’ favorite arbitration firms to drop out of consumer arbitrations in 2009 because her investigation discovered that they were in fact owned by the collectors whose cases they were deciding. The sole remaining arbitration company has a good reputation for fairness, and creditors are loathe to go there because of the costs imposed upon them.

In another case I filed a motion to dismiss for a client who had been sued on a credit card not under the contract, but under two other legal theories called “account stated” and “open account.” While those are valid legal theories in some cases, Florida law requires the creditor to sue on the contract if there is a contract (and without the contract to interpret, the consumer is hard pressed to make use of many federal and state legal protections), so the other legal theories should not be used by credit card companies, which never issue cards without a cardmember agreement. That motion has not been heard yet, but the creditor has allowed the case to languish and it may ultimately be dismissed for lack of prosecution.

Sometimes a client comes in with a case that has already gone to judgment, but there are problems with how that happened. For instance, one client was served by publication by a credit card company after it claimed it had made attempts to serve him in person, and a judgment was issued. My review of the client’s life at the time that the supposed attempts to serve him took place revealed that he was at a stable address that could have been ascertained by looking at his credit report, and in fact he was so well established he was in the process of buying a house during the same time period the creditor claimed it couldn’t find him. I motioned the court for the judgment to be vacated. There has been no decision on that motion, and the creditor and client are in slow-motion negotiations to resolve the matter, but the creditor’s collections thrust was blunted by the filing.

In still another case, I filed a suit against a collector that had been repeatedly calling a debtor’s mother and had accused the debtor of “robbing a bank” on the phone just because the debtor couldn’t pay. The creditor paid a substantial amount of money in settlement before even answering the complaint. These kinds of actions are the day-to-day solutions to the problem of debt.

Marching in the streets may become an important part of changing how debtors are treated in this country, but the most important thing for any individual is to take timely action to reclaim the initiative from a creditor who is using the legal system to press for payment. I’m glad I can do my part to help debtors who are being abused.