“And the beat goes on…”

The Wall Street Journal reports that J.P. Morgan Chase & Co. has dropped or asked to voluntarily dismiss without prejudice more than 1,000 credit card debt-collection lawsuits in several states. The bank's lawyers asked that they be dismissed without prejudice, which means the bank can re-file them later if done within the statute of limitations. The Statute of Limitations can vary widely from state to state and is determined by the date of the consumer’s last payment on the account or acknowledgement of the debt.

Though Chase would not say how many cases were dismissed or why, The
Journal determined that cases were dropped in California, Florida, Illinois, New Jersey, and New York. These five states contain the largest number of Chase credit card holders. As of March 31, Chase was owed nearly $50 billion on outstanding credit cards in those states.

The Journal reports that the dismissals may have been related to "irregularities" in the paperwork used to file the lawsuits, which could indicate sloppy or fraudulent
documentation of debt.  The bank is being scrutinized for possible use of so-called robo-signing, in which employees sign documents—often in large number —without reviewing them.  In an affidavit the bank employee basically swears that they have reviewed the account documentation and they have determined that the information is valid and correct and that the balance is owed. In the case of robo-signing no such review of the documentation was done and the affidavit of account is, therefore, fraudulent.

Also, as seen in the past, improper service of the legal documents could be responsible for the nearly 95% of legal judgments issued against consumers by default.  In this case the defendant does not appear in court after being served with a summons and complaint and a judgment is issued against them.

As I have previously stated, no action can be taken against a consumer in an unsecured credit card transaction to garnish their wages, seize their bank account, and put a lien against their home until they have had their day in court. Therefore, if you are served with a summons and complaint alleging that you owe money you MUST defend yourself or a default judgment will be issued against you. This legal judgment empowers the creditor to take actions to collect which may include any of the above remedies.

So, do not allow a creditor to attain a default judgment against you. There are things that you can do to protect your assets in this situation. Even if you owe the debt and cannot pay you should appear in court. The judge will instruct you and the creditor’s attorney to have a conference at which time a number of solutions will be offered including settlements and stipulated payment schedules.

- Patrick Ingegno can be reached at inner-circle@optimum.net or
www.innercircledebtsolutions.com