Debt Lawsuits, Garnishments, False Affidavits of Service on the Rise
April 21, 2010
A good article about consumer debt collection recently appeared in the New York Times: More Struggling Borrowers Face Pay Garnishment.
The article discusses the dramatic rise in debt lawsuits and wage and bank account garnishments. It also discusses as the importance of responding to debt lawsuits.
Most interestingly, it discusses the problem of consumers’ not being properly served with notice of these lawsuits.
I would say this is an epidemic in Maryland. Several times a week I speak to consumers whose court summons paperwork has been left on their front porch or in their mailbox. This does not constitute adequate service.
The process server then submits a false affidavit of service to the court stating that he personally served the defendant or the defendant’s family member.
Unfortunately, many consumers don’t know they can challenge the insufficient service. But, even if the service is thrown out, you can be served again. So, you still have to deal with the underlying lawsuit. Consequently, many consumers don’t challenge the bad service.
But, it seems to be common knowledge in Maryland that certain process servers routinely submit false affidavits of service. It is a mystery why debt collection firms continue to use these process servers.
Consumers who were improperly served should consider whether they can make a motion to the court to quash the bad service. If nothing else, doing so will put the courts on notice that certain debt collection firms routinely use process servers who submit false affidavits.
Mann Bracken’s Cases Dismissed, But Consumers Should Remain Vigilant
January 16, 2010
Debt collection law firm Mann Bracken’s pending lawsuits are being dismissed without prejudice in Maryland courts.
If your case is supposed to be dismissed, be sure to follow up and ensure that it is actually dismissed. There is going to be a lot of confusion in the court system as a result of the mass dismissals. Stay on top of your case and verify that it has in fact been dismissed.
Mann Bracken LLC Ordered to Cease Collection Activities in Maryland
January 14, 2010
The Maryland Commissioner of Financial Regulation has suspended Mann Bracken’s collection agency license in the state of Maryland and ordered it to immediately cease all collection activities, including pending litigation.
Defendants in cases for which Mann Bracken is Plaintiff’s counsel should consider how this affects their cases, garnishments, or settlements.
Please see text of order at this link:Â mann-bracken-cease-and-desist-1-11-10
Have Your Wages Been Garnished in Maryland? Tell the Court About Your Hardship
August 6, 2009
If a judgment creditor attempts to garnish a judgment debtor’s wages in Maryland, the debtor has a few options.
(A “judgment debtor” is a person who already has a judgment resulting from a debt lawsuit against him or her. He or she was the Defendant in the original debt lawsuit. The Plaintiff from the original lawsuit, who then tries to collect on its judgment, is called the “judgment creditor.”)
Keep in mind a judgment creditor– if the garnishment is successful– can get up to 25% of a judgment debtor’s pay after deductions for taxes, social security, and medical insurance payments. For most people, this is a significant amount.
In other words, an employee may exempt up to 75% of his or her “disposable wages,” which is the amount remaining after deduction for taxes, social security, and medical insurance payments.
But what about the remaining 25%? Is there any way to avoid a garnishment of these amounts?
Maryland courts have held that a Maryland resident’s “wild card” exemption may not be applied to a wage garnishment.
In order to stop a wage garnishment, judgment debtors typically must (1) declare bankruptcy, (2) work out a voluntary arrangement with the judgment creditor, or (3) successfully argue to the court that the garnishment will not leave them with enough money for basic survival.
(There may also be procedural grounds or other grounds to challenge a particular garnishment– here I am assuming no other challenges apply.)
This week I heard some interesting anecdotal feedback from some pro se judgment debtors whose wages have been garnished. They were able to successfully argue to the court that the wage garnishment should not be granted because there would not be enough funds left over for the debtor to pay for rent and food.
As you know, every case is different. This post is intended to encourage pro se judgment debtors to (1) request a hearing and (2) argue their hardship situation if they are faced with a wage garnishment.
Unless your local court has a specific form for this purpose, you can use this general purpose Motion form to tell the court (1) you object to the wage garnishment on the grounds of hardship and (2) you request a hearing on the issue.
maryland-district-court-general-purpose-motion-form
Keep in mind I cannot give legal advice in a blog post. Every situation is different. The court may not deem your particular situation to be a hardship.
But, judgment debtors facing wage garnishment should be aware they have the option of raising the issue with the court.
Opposing Bank Account Garnishments in District of Columbia
August 2, 2009
If you are a D.C. resident whose bank account has been garnished or you have a bank account located in D.C. that has been garnished, read the attached form carefully:
If you would like to request a hearing or exempt your funds from garnishment, file this form as soon as your bank notifies you of the garnishment:
dc-garnishment-motion-for-exemption-and-to-request-hearing
Please contact our office with any questions or for a consultation.
Laws Regulating Debt Collectors: FAQ
January 11, 2009
Below are some questions our office frequently receives.
The collection agent I spoke to was very threatening and called me in the middle of the night. Is this legal?
No, such collection techniques are not legal.
Collection agencies must by law follow certain detailed procedures when contacting a consumer by mail or phone. Collection agencies must also by law provide you with certain information about your rights.
You can sue a collection agency if it breaks these laws in its communications with you.
How can I prove a debt collector broke the law?
To help you prove your case, it is very important that you save all letters and voicemails from collection agencies.
You should also save all old statements, the original account agreement, and any other documents you have for the account.
We do not recommend dealing with collection agencies over the phone. But, if you decide to speak with a collection agency over the phone, you may want to consider taping all phone calls. In Maryland, you must by law get the other partyÂs permission before recording a call.
Also, save any recorded phone messages from collection agencies. If you speak with a collection agent over the phone, make detailed notes about the phone call as soon as you hang up, even if you are recording the call.
And, if you have an attorney, the collection agency must by law (1) stop contacting you about the account and (2) direct all communications about the account to your attorney.
What kinds of debt collector contacts are prohibited by law?
Many state and federal laws regulate debt collection activities. In some cases, a consumer can sue a debt collector if it violates these laws. Below is a partial list of illegal debt collector activities.
You should contact an attorney for more information if you think a debt collector has behaved inappropriately or made suspicious statements to you.
Even if you donÂt see a description below that fits your situation, there may be other laws that apply.
Harassment. A debt collector may not:
- Threaten violence or harm.
- Refuse to identify him- or herself and the fact he or she is a debt collector.
- Advertise or publish a debt. (Exception: it usually may report the debt to credit bureaus.)
- Use obscene language.
- Call very early, very late, or in an otherwise harassing pattern.
- Contact you by postcard in an attempt to embarrass you.
- Charge you for collect calls.
- Contact neighbors, employers, or family members about your debt. (This is illegal in most cases.)
- Continue to contact you about a debt after you have informed the collector that an attorney represents you.
False Statements Prohibited. A debt collector may not make false statements when trying to collect a debt. Some examples are:
- Falsely implying that a debt collector is an attorney, police officer, or government representative.
- Falsely implying that a consumer can be arrested or imprisoned for not paying a debt.
- Falsely claiming or implying to be affiliated with a credit bureau.
- Misrepresenting the amount or legal status of the debt.
- Sending fake Âlegal papers in an attempt to collect on a debt.
- Telling a consumer that a letter is not a legal document when it is.
- Telling a consumer a lawsuit is in progress when that is not true.
- Telling a consumer the debt collector will seize the consumerÂs property or wages. (This is an illegal threat unless the debt collector both has the legal right to do so and intends to do so soon.)
- Telling a consumer the debt collector will garnish his or her paycheck “immediately” or “next week,” when there is no final legal judgment in place. Garnishments usually cannot take place until a creditor or debt collector gets a final court judgment against the consumer.
- Telling a consumer she or he will be sued. (This is an illegal threat unless the debt collector both has legal grounds to sue and intends to do so soon not months or years later.)
- Making contradictory statements about a consumerÂs legal rights. For example: in one paragraph, a collectorÂs notice might inform a consumer of his legal rights, but in the next paragraph the collector might write, Âyou waive all of the above rights if we donÂt hear from you in 30 days.Â
Garnishments of Bank Accounts in Maryland
October 23, 2008
If a judgment creditor seeks to garnish your bank account, it is very important to respond to the garnishment notice.
IN MOST CASES, YOU HAVE 30 DAYS OR LESS TO RESPOND TO A GARNISHMENT.
If you ignore the garnishment notice, the contents of your bank account will probably be turned over to the judgment creditor.
Remember: in most cases, creditors need to get a final judgment against you before they can garnish your bank account.
If the creditor sued you in Maryland District Court and got a judgment against you, you can respond to the garnishment by filing the attached form with the court:
Certain funds are exempt from garnishment. A few examples include:
- unemployment income,
- some social security disability income payments,
- some workman’s compensation payments, and
- some joint account funds if the account is held by spouses as tenants by the entirety and the judgment is against only one spouse.
The above is not an exhaustive list of exempt funds. You will need to consult an attorney to determine if your bank account funds are exempt from garnishment based on the source of the funds.
You may also be eligible to declare an exemption of up to $6000.00. To determine if you are eligible for this exemption, contact an attorney.
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