Flawed Credit Card Lawsuits
Flawed Credit Card Lawsuits
Debt collectors are not the only ones filing faulty paperwork in an attempt to collect on alleged debts. As was reported in a recent New York Times article, original creditors are also filing faulty paperwork and overstating amounts owed in their credit card lawsuits. However, the article shows that Judges are starting to get wise to this:
The same problems that plagued the foreclosure process — and prompted a multibillion-dollar settlement with big banks — are now emerging in the debt collection practices of credit card companies.
As they work through a glut of bad loans, companies like American Express, Citigroup and Discover Financial are going to court to recoup their money. But many of the lawsuits rely on erroneous documents, incomplete records and generic testimony from witnesses, according to judges who oversee the cases.
Lenders, the judges said, are churning out lawsuits without regard for accuracy, and improperly collecting debts from consumers. The concerns echo a recent abuse in the foreclosure system, a practice known as robo-signing in which banks produced similar documents for different homeowners and did not review them.
‘I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,’ said Noach Dear, a civil court judge in Brooklyn, who said he presided over as many as 100 such cases a day.
The problem is that the creditor is usually granted a default judgment because the borrower does not show up for court. This typically results in the borrower being responsible for whatever amount the lender alleged was owed in their complaint. The amount alleged to be owed is not always accurate! The same NYT article states that “The Office of the Comptroller of the Currency is investigating JPMorgan Chase after a former employee said that nearly 23,000 delinquent accounts had incorrect balances, according to people with knowledge of the investigation.” So, as we have stated in the past, it may be a good idea to defend that credit card lawsuit!
The Law Firm of Vaughn, Weber & Prakope, PLLC can assist you with debt settlement and debt collection issues. Call (516) 858-2620 to arrange a FREE consultation with an attorney!
Court Appearance Default
Did you attend a court appearance and the other side wasn’t there? Did you miss a court date and want to know what your options are? Vaughn and Weber can help you decide what to do next.
People miss appointments. It’s a fact of life. Accidents, illnesses, family emergencies, or any number of other events beyond our control may prevent people from attending meetings, even very important ones. Court appearances are just as likely to be interrupted by such events as anything else. Courts understand this, and missing a court date is not necessarily fatal to a case. When someone misses a court date, or “defaults,” every party involved – the appearing party, the absent or defaulting party, and the Court – has options.
Section 202.7 of the Uniform Court Rules, titled “Defaults,” provides:
At any scheduled call of a calendar or at any conference, if all parties do not appear and proceed or announce their readiness to proceed immediately or subject to the engagement of counsel, the judge may note the default on the record and enter an order as follows:
(a) If the plaintiff appears but the defendant does not, the judge may grant judgment by default or order an inquest.
(b) If the defendant appears but the plaintiff does not, the judge may dismiss the action and may order a severance of counterclaims or cross-claims.
(c) If no party appears, the judge may make such order as appears just.
This section gives Courts certain options, depending on the type of case, and whether the defaulting party is a defendant or plaintiff. Most importantly, this rule gives the Court the power to enter a Default Judgment against the absent party. When a Default Judgment is entered against the absent party, the present party wins the case. This is good news for the present party, but it is not the end of the story. Even if the Court enters a Default Judgment against the absent party, the present party – the “winner” – still has work to do. Section 2220 of the Civil Practice Law and Rules requires that the winner provide the defaulting party with notice of the Judgment. When the defaulting party receives notice of the Judgment, that party has a certain period of time to ask the Court for an opportunity to explain the absence. If the Court is satisfied that the absent party has good cause for missing the court date, the Court may re-open the case. If not, then the default judgment ends the case.
If you have questions about defaulting on court appearances, Vaughn, Weber & Prakope, PLLC is here to assist you. Call 516-858-2620 to schedule a free consultation. We are located in the heart of Long Island at 393 Jericho Turnpike, Suite 208, Mineola, NY 11501.
*Contributions to the research for this article have been made by Jason Mays, J.D.
Understanding an Inquest
Understanding an Inquest
An inquest is a hearing in which a court evaluates a party’s claims for damages when another party “defaults”. Defaults occur in some areas of law more than others. They can be very common in landlord-tenant and and consumer debt cases.
When someone fails to attend a court date, and cannot give the Court a good reason for the absence, the Court may enter a “default” judgment against that person. The default judgement will mean that, as far as the court is concerned, the person is liable of whatever the other party has alleged.
However, whether a person has caused harm to another, and how much harm a person has caused, are two different issues. For example, assume a plaintiff sues a defendant for damaging a car. The defendant may admit to damaging the car, but may dispute the dollar value the plaintiff assigns to the damage. Perhaps the defendant claims that the car was already damaged in a previous accident. The defendant may argue that the plaintiff is attempting to collect money to cover damages resulting from the previous accident – damages that the defendant didn’t cause. Although the defendant caused some damage to the plaintiff’s car, it would be unfair to hold the defendant liable for more damages than the defendant actually caused. The inquest addresses this issue.
Once a default judgement is entered against a defendant, it is as if the defendant has admitted to causing the harm. But the court will still want to make sure that the defendant is not paying more in damages than the defendant caused. At an inquest, the court will require the plaintiff to provide testimony, affidavits, or other evidence, that will prove how much harm the defendant actually caused. Additionally, the defendant may cross-examine witnesses at the inquest, and may even offer evidence – as long as that evidence is confined to the issue of damages, not liability.
In a landlord-tenant case, it is certainly possible for a landlord to ask for more money than the tenant actually owes in arrears. In this context, a court will want to see some proof that the tenant actually owes the amount of rent the landlord claims. Similarly, a creditor could ask for a higher amount of money than the debtor owes. Perhaps the debtor made payments that have not been credited to the account. Or, the creditor may have charged fees or interest rates that exceed those included in the contract terms. In each of these situations, parties will be able to raise these issues at an inquest, even though a default judgement has been entered against them.
Long Island Litigation Attorney
If you have any questions about this issue, or other legal questions, the Law Firm of Vaughn, Weber & Prakope, PLLC is here to help. Call (516) 858-2620 to schedule a free consultation.
Cash advances taken shortly before filing bankruptcy can be problematic for the debtor. Some creditors will file an adversary proceeding if they believe the cash advance is nondischargeable. This type of adversary proceeding is basically a lawsuit against you to determine the dischargeability of the cash advance. It must be defended like any other lawsuit or a default judgment will be taken against you. This type of action is by no means a slam-dunk for the creditor. However, some cash advances are presumed nondischargeable. This basically makes it easier for the creditor to make their case. Therefore, it would be wise to mention cash advances you have taken to your bankruptcy attorney before he of she files your bankruptcy case.
We proudly assist residents of Long Island (Nassau county, Suffolk county) and New York City (Queens, Brooklyn, Bronx, Staten Island, Manhattan) with their bankruptcy filings.
Call (516) 858-2620 to arrange a FREE consultation with a bankruptcy attorney!