Collection Defense

How to answer a collection lawsuit in Minnesota

Before I explain how to answer a collection lawsuit, it's important to understand that Minnesota is a unique state because a lawsuit is started by serving the defendant. It is not required to be filed with a court at the beginning of the case. Because of this quirk, a lawsuit in Minnesota will almost never have a court filing number. And the courts will not have a record of the lawsuit until the creditor files the lawsuit and pays the filing fee. But this doesn't mean the lawsuit isn't legitimate. If you're served with a lawsuit in Minnesota, you must answer within 20 days. If you don't answer the lawsuit, it's likely that a default judgment will be entered against you without a court hearing. So the first step to respond to a collection lawsuit is to answer it. An answer is a formal legal document that responds to each of the allegations in the lawsuit. A phone call or letter isn't sufficient. Here's how to answer a collection lawsuit in Minnesota:

Fill out the caption

Overall, your answer should be formatted much like the collection lawsuit itself. Start by filling out the caption at the top of the lawsuit. This is where the name of the county and judicial district are listed. It's also where the plaintiff and defendant's names appear. You can basically copy this directly from the lawsuit. Just change the title of the document from "complaint" to "answer."

Respond to all of the allegations in the lawsuit

The body of your answer is where you respond to the allegations in the complaint and list your defenses. It's best to number each paragraph of your answer to correspond with each numbered paragraph of the complaint. There's basically three responses to an allegation: (1) admit; (2) deny; and (3) deny based on a lack of information.

Your responses must be truthful, so if you know that the allegation is true, you have to admit for. For example, if the collection lawsuit alleges that you live in Hennepin County and you live in Hennepin County, you have to admit it. On the other hand, if the lawsuit alleges that you live in Hennepin County and you live in Ramsey County, then you would deny the allegation.

Many times, you won't know the answer to an allegation. For example, many debt buyer lawsuits allege that the debt buyer purchased the account from the original creditor. Since you weren't a party to this transaction, you have no way to know if this allegation is true or not. So it's usually best to deny the allegation based on a lack of information. You only have to admit something that you know for a fact is true.

You should also watch out for multiple allegations in a paragraph. It's possible to admit one part of an allegation and to deny another. Read each allegation carefully and be sure to respond to all of its parts and sub-parts. When you've finished responding to every allegation, sign and date the answer.

Serve the answer by mail

Once you've completed the answer, make two copies. You serve one copy of the answer by mailing it to the debt collector's lawyer, or the debt collector itself if they don't have a lawyer. It's best fill out a sworn statement, called an affidavit of service, to prove when you served the answer. Here's a form affidavit from the Minnesota Court website.

Keep  the second copy of your answer for your records. Hang on to the original answer for filing with the court, but you don't have to file it until the debt collector does if you don't want to.

Knowing how to answer a collection lawsuit isn't enough

Now you know how to answer a collection lawsuit in Minnesota. But answering is just the first step. There will likely be discovery to answer and a motion to respond to. When you get these things from the collector, it's probably best to talk to a consumer lawyer right away. Responding to discovery  or a motion is complicated, there are strict deadlines, and it's possible to lose your case based on a technicality if you don't follow the court rules.

Who is National Collegiate Student Loan Trust?

Over the last few years, National Collegiate Student Loan Trust has brought hundreds of debt collection lawsuits against Minnesota citizens. If you've been sued by National Collegiate Student Loan Trust, here's what you need to know.

Who is National Collegiate Student Loan Trust?

NCSLT doesn't lend money. It's merely a series of trusts that contain a pool of hundreds of private student loans. The loans have been packaged together and sold as investment vehicles. If this sounds similar to the way mortgages are handled, it should.

There are several National Collegiate Student Loan Trusts. They are typically named with the year the loan was originated. For example, most of the cases I'm seeing lately involve National Collegiate Student Loan Trust 2007.  I've also seen loans held by National Collegiate Student Loan Trust 2005 and 2006.

How do the student loans get into these trusts?

First, a bank issues a student loan to help someone pay for college. The bank then sells the loan to an entity called National Collegiate Student Loan Funding. This entity is merely a holding company that deposits all of the student loans into the individual trusts. Once the loans are packaged into trusts, bonds are sold to investors. The investors receive money based on the amount of money collected from student loan borrowers.

The trusts themselves don't actually service the loans and collect the payments. They hire someone, called a servicer, to do that for them. In most of the cases I've seen, the servicer is U.S. Bank.

Another interesting element of these trusts is that the loans are partially guaranteed. This means that the investors basically have an insurance policy when student loan borrowers aren't able to make payments. If the borrower defaults, the guarantor steps in and covers the payment.

What should I do if I'm sued by National Collegiate Student Loan Trust?

In my experience, it's difficult to negotiate a reasonable payment plan with National Collegiate Student Loan Trust. They demand that the borrower hand over a bunch of sensitive financial documents, such as tax returns and pay stubs before they'll even consider a settlement offer. And the offers that they make are rarely affordable. To avoid this frustrating experience, I've been advising people to fight back against the lawsuit by answering it and challenging NCSLT's proof in court.

National Collegiate Student Loan Trust can usually prove that they acquired a pool of loans from the originating bank. But, in my experience, they rarely have sufficient proof that they own your loan. There are other ways to challenge the sufficiency of their evidence and, depending on the specific facts involved, you may have other defenses as well. We've been successful getting NCSLT cases thrown out of court and have negotiated very favorable payment plans by pushing back.

What you need to know about the collection of old debts

If you're facing debt collection on a debt that is more than a couple of years old, the first thing you should do is figure out how long the statute of limitations is. Remember, the statute of limitations is the amount of time set by law for a creditor to start a lawsuit against you. In Minnesota, for example, the statute of limitations for most debt collection lawsuits is six years. This means that the lawsuit only has to be started within six years. It doesn't mean that the lawsuit has to be finished within six years.

Once you know what the statute of limitations is, you need to determine when it starts to run in your case. Generally, the statute of limitations begins to run on the first day that you are in default on your account. A quick way to figure out when your account went into default is to determine the date that you made your last regular payment. Although this won't always be a precise date that the statute of limitations began to run, it's a good estimate.

When you know the applicable statute of limitations and the date it started in your case, the rest is just simple math. Using Minnesota's six-year statute of limitations as an example again, if you defaulted on your account on December 15, 2011, the creditor must start the lawsuit against you no later than December 15, 2017.

If the creditor doesn't start the collection lawsuit within the statute of limitations, it loses its ability to use the judicial process to collect the debt. This doesn't necessarily mean that the creditor can't call or write you to collect the debt. In Minnesota, a debt collector may collect a debt that is past the statute of limitations. But it can't threaten to sue you or sue you for an old debt that is past the statute of limitations. And if the debt is more than seven years old, it can't be reported to the credit bureaus.

If the debt collector brings a lawsuit on a debt that is past the statute of limitations (or time-barred as some courts say), you have an absolute defense to the collection lawsuit. You need to raise this defense in your answer or it may be waived. Also, it's your burden to prove that the statute of limitations is up and you may need to gather some evidence first. But this is a powerful defense that, if proven, will result in the debt collector's case being thrown out.

In addition, many courts have held that a debt collector violates the FDCPA when it threatens to bring or brings a lawsuit for an old debt that is past the statute of limitations. When a debt collector violates the FDCPA, you have the right to sue them and the law provides that the collector has to pay you up to $1,000, plus any provable actual damages--such as emotional distress. Further, the debt collector has to pay your attorney fees and costs. So if everything goes your way, you could get the debt wiped out and get some money back from the debt collector.

A quick summary of the law on the collection of old debt

(1) In Minnesota, a debt collector can attempt to collect a debt past the statute of limitations through phone calls, letters, or similar methods. This rule may be different in other states.

(2) A debt collector in Minnesota cannot, however, threaten to sue you or sue you for a debt that is past the statute of limitations. This is also true in most other states.

(3) A debt collector cannot put a debt that is more than seven years old on your credit report. This is true everywhere. I would also take the position that a debt collector cannot even threaten to report a debt that is past the statute of limitations.

Debt collection judgment? What you need to know.

A debt collection judgment is a court order that you owe the creditor money. The judgment is the final decision in a collection lawsuit. It gives the debt collector the power to garnish your bank account and wages. It has a negative impact on your credit score. And in some cases, creditors will exercise their post-judgment power to seize some of your personal property and have it sold to pay the debt. Having a judgment against you is an unpleasant situation to be in and is one of the main reasons why it's so important to answer the summons and complaint. If a debt collector has a judgment against you, here are some of your options:

Consider vacating the debt collection judgment

If the judgment was obtained by default, you may be able to bring a motion to vacate the judgment. This will give you a chance to defend yourself. Think of it as a do-over. But you're only able to get a debt collection judgment vacated in very limited circumstances. A consumer lawyer can help you decide if a motion to vacate is right for your case.

Negotiate a settlement or payment plan

If a motion to vacate the judgment is not appropriate in your situation, your options are pretty limited because the time to dispute the debt has passed. In many cases, your best choice may be to try to negotiate a settlement of the debt collection judgment. That may be the only way to avoid the stress and inconvenience of garnishments. Good deals are hard to come by after judgment because you've lost most of your leverage. But if you can demonstrate a significant financial hardship, or have a lump sum of cash available, you may be able to get the creditor to knock a decent chunk of the balance off.

If all else fails, bankruptcy may be your best option

If the judgment is for a significant amount of money, or if you have multiple judgments, your best choice may be bankruptcy. Bankruptcy puts an immediate stop to garnishments and other collection activity and will allow you to wipe out or manage all of your debts.

Remember that the FDCPA applies even after the judgment is entered

The FDCPA is a federal law that regulates what debt collections can and can't do when collecting. If a collection violates the FDCPA, you have a legal claim against them for up to $1,000 in statutory damages, plus provable out-of-pocket and emotional damages. The debt collector also has to pay your attorney fees and costs. A viable FDCPA claim is also great leverage to get a debt collection judgment resolved favorable. So keep a record of all the conversations you have with the debt collector and save all letters and voice mails from them. And if you think that a debt collector has violated the FDCPA, talk to a consumer lawyer right away.

Debt buyer lawsuit: What you need to know.

A debt buyer lawsuit is a collection lawsuit brought by a company that bought the debt after it went into default. It's a completely different animal than a collection lawsuit brought directly by the original creditor.

What is a debt buyer?

A debt buyer is a company that purchases delinquent debts from creditors for pennies on the dollar and then tries to collect the full amount, often making a nice profit in the process. Debt buyers have strange names like Midland Funding, Cavalry Portfolio Services, or Unifund CCR Partners. As with any business, they come in all shapes and sizes. Some debt buyers operate nationwide and have millions or billions of dollars in accounts. Others operate regionally and have much smaller debt portfolios. Some specialize in certain types of debt, like credit cards, second mortgages, and the like.

Here's a partial list of some of the debt buyers I've come across:

  • Asset Acceptance

  • Cavalry Portfolio Services

  • Central Prairie Financial

  • Dakota Bluff Financial, LLC

  • Debt Equities, LLC

  • Equable Ascent Financial, LLC

  • Livingston Financial, LLC

  • LVNV Funding

  • Midland Funding

  • Palisades Collection

  • Pipestone Financial, LLC

  • Portfolio Recovery Associates

  • Red Rock Lake Financial, LLC

  • Unifund CCR Partners

Why it's critical to answer a debt buyer lawsuit

Debt buyers are notorious for filing collection lawsuits in bulk. According to a 2009 article in the William Mitchell Law Review, debt buyers obtained 2,400 default judgments a month in Minnesota. These judgments were obtained by default because the consumer didn't show up in court. In almost all of these cases, the debt buyer didn't have to present any evidence to a judge.

This last point is crucial because debt buyers acquire accounts in bulk and often don't have the account-level documents needed to prove their claims. That's why it's so important to answer a debt buyer lawsuit within 20 days of being served to ensure that a judge reviews their evidence.

Possible defenses to a debt buyer lawsuit

One good way to defend a debt buyer lawsuit is to challenge their proof of ownership. Because they didn't extend the credit, they should be required to prove their ownership of the account and their entitlement to collect the balance. The more times a debt has been bought and sold, the less likely it is that the current debt buyer can prove each step in the chain of ownership.

Another possible defense is to dispute the debt buyer's evidence. Under the court rules, if a party wants to introduce documents (like credit card billing statements, for example) it must provide testimony about the reliability of the documents. This can be difficult for the debt buyer to do properly because they didn't create the account documents in the first place.

An additional defense to consider in a debt buyer lawsuit is the statute of limitations. The statute of limitations is the length of time that a creditor has to start a lawsuit after the account goes into default. In Minnesota, it's generally six years, although there are exceptions. It's not uncommon for a debt to be bought and sold multiple times and some debts bounce around for years before a legal action is taken. These repeatedly-sold accounts are sometimes called zombie debts (because they never die) and the statute of limitations is often a powerful defense in these cases.

There are other possible defenses that are more fact specific and will depend the particular facts and circumstances of your case. There are also some bad defenses that consumers often put in their answer. It may be wise to discuss your case with an attorney experienced in defending debt buyer lawsuits before proceeding too far to see what defenses apply to your case and how strong they are.

Sued by a debt collector? Avoid these defenses.

When you're sued by a debt collector, you must respond to the lawsuit with an answer within 20 days or a default judgment will be entered against you. An answer is a written legal document that responds to the allegations in the lawsuit. A default judgment often leads to bank garnishments, wage garnishments, and other involuntary collection efforts. So while it's critical to respond, there are some defenses that should be avoided.

Lack of a signed contract

Many people believe that debt collectors must produce a copy of the contract that the account-holder signed to prevail in a debt collection lawsuit. But there are alternative theories used by debt collectors, such as account stated, that may allow them to prevail by merely introducing credit card billing statements. Account stated is an equitable theory where the debt collector must show that the consumer "assented" to the account by receiving billing statements and not objecting to them within a reasonable period of time. Although there are defenses to this argument, particularly if the plaintiff is a debt-buyer, the point is that a signed contract doesn't have to be produced.


Unfortunately, the fact that you cannot afford to pay the alleged debt is not a defense when you're sued by a debt collector. The issue in a debt collection lawsuit is whether you are legally obligated for the debt, not whether you can afford to pay the alleged debt. That fact that you are unemployed, receive public assistance, or are otherwise "judgment proof" may mean that the debt collector will never collect any money from you. But it is not a legal defense to a lawsuit.

Attempted to pay

While frustrating, the fact that the debt collector refused to work out reasonable payment arrangements with you is not a legal defense to a debt collection lawsuit.  Courts do not have the authority to force the debt collector to accept the payment plans or settlements.

Ex-spouse responsible for payment

Just because your divorce decree ruled that your ex-spouse is solely responsible for payment of a joint debt, doesn't mean you cannot be sued for the account by a debt collector. Divorce courts do not have the power to modify contracts between you and a third-party debt collector. You may, however, be able to sue your ex-spouse to repay you for any money you are ordered to pay the debt collector.

Good defenses when you're sued by a debt collector

Now that you know how not to defend a debt collection lawsuit, here are some good potential defenses: statute of limitations, unauthorized and/or fraudulent use of the account; identity theft; incompetent or insufficient evidence; and lack of valid assignment of the debt (usually only applicable in debt buyer lawsuits). This is not an exhaustive list and these defenses may or may not apply to your particular case. Consult with a consumer lawyer in your area for specific advice about your case.

Debt collection lawsuit in Minnesota? What you need to know.

Dealing with a debt collection lawsuit can be a scary and confusing process. This is especially true in Minnesota where the initial stages of the case often take place outside of court oversight. Hopefully, this post will shed some light on the collection litigation process and allow you to make a more informed decision about how to get your case resolved as quickly and painlessly as possible.

Before we begin...

This post describes the basic steps of a debt collection lawsuit in District Court in Minnesota. Every state has different laws and procedures. What happens in a Minnesota lawsuit may be very different from what happens in a collection lawsuit in another state. If your collection lawsuit is not in Minnesota, then you shouldn't rely on anything I've written here. And if your case is in Minnesota Conciliation Court, or small claims court, then the steps are different than what I've described here.

Step 1 -- Service of the Complaint

In Minnesota, a debt collection lawsuit begins when the consumer is served with the Summons and Complaint. The Summons is a notice that a lawsuit has started and contains basic instructions about what to do next. The Complaint details what claims are being made. The Summons and Complaint are not required to be filed with a court and most debt collection lawsuits will not be filed at the time they are served. Accordingly, the Summons and Complaint will not have a court file number on them. There is a lot of information on the internet that suggests that a Complaint without a file number is invalid. This may be true in other states, but it isn't true in Minnesota.

I'm often asked what it means to be "served." Served essentially means "notified." In Minnesota, the most common way to serve a defendant with a Summons and Complaint is to personally hand it to the defendant. Another common method of service is to hand the Summons and Complaint to a person of "suitable age and discretion" that lives with the defendant. This is usually a spouse, older child, or roommate. In Minnesota, it's possible to serve a Summons and Complaint by mail, but the defendant must sign an acknowledgment that they've received the complaint or it's not effective service. It's also possible to serve a defendant by publishing notice of the lawsuit in a newspaper or similar publication, but this is very rare in debt collection lawsuits.

Step 2 -- Answer the Complaint

Once a debt collection lawsuit is served, the defendant has 20 days to respond with an Answer. An Answer is a formal, written, legal document that specifically responds to each of the allegations in the Complaint and lists any defenses that the defendant has. Phone calls or letters are not considered Answers under the court rules.

If the defendant does not answer a lawsuit within 20 days of being served, then he is in default and a judgment may be entered against him. In a debt collection lawsuit, a default judgment is a final court order that the consumer owes the money. If a default judgment is entered, none of the steps below will take place and the case will be over. A default judgment is granted not because the creditor has better evidence or arguments, but because the consumer didn't participate. It happens administratively and no judge will ever see the case. If you want to protect your rights and force the creditor to prove its case in front of a judge, then you must answer the lawsuit within 20 days of being served. This is especially important if you've been sued by a debt buyer.

Step 3 -- Initial disclosures and discovery plan

After the Answer is served, the parties are required to confer about the case and develop a plan for discovery (Step 4, below). This conference, which can be by phone, is required to take place within 30 days of the original due date for the Answer. Most debt collection law firms will send a letter to set up the conference.

The parties are also required  to disclose all known witnesses and supporting documents, as well as to itemize the claimed damages and describe any insurance coverage for the claims, at this stage of the case. These are known as Rule 26 initial disclosures and must be sent to the other side within 60 days of the original due date for the Answer.

Both the initial disclosures and discovery conference and plan were added to the court rules in 2013.

Step 4 -- Discovery

Once the discovery conference takes place , the next step in a debt collection lawsuit is discovery. If the case has not been filed with the court, there is no explicit time frame for discovery to happen and the parties are free to serve discovery whenever they wish. Once the case is filed with the court, the court will issue a deadline for discovery to be completed by.

Discovery is simply an opportunity for the parties to exchange information about the claims and defenses involved in a case. Discovery is not compulsory and a party is only required to provide information if they're properly asked. The most common forms of discovery in a debt collection case are Interrogatories, Request for Production of Documents, and Requests for Admission. Interrogatories are basically just questions that one party asks of the other. Requests for Production of Documents, as the name implies, requires that certain documents related to the case be produced. And Requests for Admission are essentially true or false questions about the claims or defenses in the case.

To request discovery, a party has to properly serve their Interrogatories, Requests for Production of Documents, or Requests for Admission. Written discovery is usually served by mailing the requests to the other side. The other party then has 30 days from the day the discovery was served to respond fully. Simply mailing a letter to the other side asking them to provide information about the case is not sufficient and doesn't trigger the other side's duty to respond.

Requests for Admission are probably the most critical part of discovery, because if they are not responded to within 30 days, they are considered admitted. Creditors write their Requests for Admission carefully so that if the consumer doesn't respond to them, they will end up admitting each element of the creditor's claims. I've seen cases where the only evidence that the creditor put in front of the judge was the consumer's failure to respond to the Requests for Admission.

The bottom line: if you receive discovery requests, you must truthfully respond to them in writing within 30 days. If you don't, you risk losing your case on a technicality and being penalized by the court. And if you want to ask questions of the other side and see what documents they have, you must mail them proper discovery requests. If they don't respond within 30 days, you can ask a court to make them respond and penalize them if they don't.

Step 5 -- Filing the case with the court

In 2013, the court rules were changed to require that cases be filed with the court and brought under court supervision within one year from the date the Complaint was served. If the case isn't filed within the one-year time limit, it is automatically dismissed with prejudice and can't be re-started. The rules allow the parties to agree to extend this deadline, but there rarely is a reason for a defendant in a debt collection lawsuit to agree to extend this deadline.

To file the case, each party must file their initial pleading (ie. the Complaint or the Answer) and pay the court filing fee, which is about $325. The parties also have to file their discovery plan from Step 3 above. Once the case is filed, it will typically be assigned to a judge and the court will issue a schedule with deadlines for the case.

Step 6 -- Summary Judgment Motion

The next step in the majority of debt collection lawsuits is the creditor's summary judgment motion. This is a hearing in front of a judge where the creditor will offer all of its evidence and legal arguments and ask the judge to give them a judgment. Defending a summary judgment motion is a complicated and involved process, but essentially it requires the consumer to file a brief with his legal arguments, any written testimony that he wishes the court to consider, and any documents that he wants the court to review. There is a hearing where the judge will have an opportunity to ask questions of both sides. The judge then considers all of the arguments and evidence and decides whether the creditor is entitled to a judgment. If the judge rules in favor of the creditor, a judgment is entered and the case is over. If the judge rules against the creditor, then the case will proceed to trial.

Defending against a creditor's summary judgment motion is probably the most difficult thing for a consumer to do himself. There are a myriad of rules, procedures, and deadlines that must be strictly followed. Many summary judgment motions are won by the creditor on a technicality rather than on the merits. For this reason, a consumer faced with a summary judgment motion should strongly consider hiring an attorney. If you want to hire an attorney to help you at this point, you should hire one immediately after getting notice of the creditor's summary judgment motion. There are strict deadlines to file your response and an attorney will need as much time as possible to get up to speed. Don't wait until the week before the hearing to call an attorney.

Step 7 -- Mediation

In most cases, the court requires the parties to engage in mediation. Mediation involves a neutral third-party, sometimes a retired judge, that tries to help the parties resolve their differences and settle the case. The parties usually have to bear the cost of hiring a mediator, although more and more courts are offering low-cost mediation for qualifying cases and parties. The mediator can't require you to settle the case, but they can help you see the benefits of settlement and propose different settlement options.

Step 8 -- Pre-Trial and Trial

If you're fortunate enough to defeat the creditor's summary judgment motion and the parties don't settle at mediation, the next step in a debt collection lawsuit will be a trial. The judge will issue detailed instructions about the time leading up to trial. There are so many variables at this point that it's difficult to describe all the potential scenarios. If you get to this point, you would benefit greatly from discussing your case with an attorney. You have a great deal of leverage to get the case resolved if you defeat the summary judgment motion and an experienced consumer attorney can help you maximize that leverage to get the best possible outcome.

Settling a debt collection lawsuit

At any point during a debt collection lawsuit, the parties may agree to settle the case. Usually, this means that the consumer will pay an agreed-upon amount of money and, in exchange, the creditor will dismiss the lawsuit. The amount of money that the creditor will agree to settle for depends on many factors, but generally speaking, the better your legal defenses, the better deal you can get. A document financial hardship can also help facilitate a manageable settlement. Here are some tips for getting the best deal possible.

A final word -- the Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act is a federal law that regulates what debt collectors can and can't do when collecting debts. The FDCPA applies even if you owe the debt. If you're involved in a debt collection lawsuit, you should to educate yourself about the FDCPA. This post is a good place to start. Basically, a debt collector can't harass you, lie to you, or use any unfair collection tactics. If a debt collector violates the FDCPA, you can sue it for up to $1,000, plus any actual damages. The debt collector also has to pay your attorney fees and costs if you win your FDCPA case. A FDCPA claim can often be brought as a counterclaim in a debt collection lawsuit, which often will give you additional leverage to get the suit resolved.

Who are Asset Acceptance, Unifund CCR Partners, and LVNV Funding?

Asset Acceptance, Unifund CCR Partners, and LVNV Funding are three of the biggest debt buyers in the collection industry. Other debt buyers include Midland Funding, Cavalry Portfolio, Crown Asset Management, and Palisades. A debt buyer is a company that purchases delinquent consumer accounts from original creditors such as Capital One, HSBC, Discover, and Wells Fargo. The debt buyer purchases the accounts for a tiny fraction of the balance and then attempts to collect the entire balance from the consumer. Debt buyers file thousands of lawsuits and obtain thousands of default judgments each month. They are then free to garnish people's bank accounts and wages, and as a result, collect millions of dollars. This leads to huge profits, even in the current economy. But debt buyers have a dirty little secret: they can almost never prove their case in court. Because they didn't originate the debt, they are at the mercy of the original creditor to provide them with the documents, such as credit applications and billing statements, to prove their case. Sometimes the original creditor refuses or is unable to provide the debt buyer with these critical documents. Debt buyers also have a difficult time providing thorough documentation of their purchase of the debt. Because of this, most debt buyer lawsuits can be successfully challenged. But because the majority of people don't respond to debt buyer lawsuits, the debt buyers obtain thousands of judgments by default. In most states, this means that debt buyers obtain the judgments without having to provide any proof.

If you have been sued by a debt buyer, you should answer the lawsuit and force the debt buyer to prove their case. If disputed properly, most debt buyer lawsuits can be defeated. Even if they can't be defeated outright, challenging them can lead to good deals in the form of settlements.

Changes to Minnesota court rules affect debt collection lawsuits

On July 1, 2013, some pretty significant changes to the Minnesota Rules of Civil Procedure went into effect. The amendments deal primarily with the initial stages of litigation and could have a big impact on debt collection lawsuits here in Minnesota. The full text of the amendments can be found here.

Cases must be filed within one year of commencement

The new rules require that all civil cases served after July 1, 2013 must be filed with the court within one year of the date of service. Under the old rules, there was no deadline for filing the case with the court. Now the plaintiff must file the case within a year of serving it or it will be dismissed with no opportunity to refile.

I’m sure that the debt collection law firms have put procedures in place to ensure that all cases get filed within a year, but it wouldn’t surprise me if some cases fall through the cracks and don’t get filed. This would be a huge win for a consumer, because if the case is dismissed with prejudice (meaning no right to refile), it can never be brought again.

Mandatory initial discovery disclosures

Another big change involves the way that the early stages of the case proceed. Under the new rules, the parties must make mandatory discovery disclosures within 60 days of the initial due date of the answer. The new rule requires the parties to disclose (1) the name of all persons with discoverable knowledge in the case, (2) a copy of the documents that relate to the case, and (3) the plaintiff must provide an itemization of damages.

I’m interested to see how the debt collection attorneys respond to this rule. Typically, they don’t have access to any documents from their client at the early stage of the case. I think they could comply with the new rule by disclosing what they have and updating later when they receive more documents. I had initially hoped that the this new rule would eliminate the need for extensive discovery later in the case, but that will only happen if debt collection attorneys take the spirit of the new rule seriously.

Mandatory early discovery conference

The parties are required to meet and confer within 30 days of the initial due date of the answer. The purpose of the meeting is to discuss the discovery phase of the case and to prepare a written report to the court that contains the parties’ discovery recommendations. Under the old rules, no such meeting or report was required.

This discovery conference is unnecessary in most consumer debt collection cases. There are rarely discovery issues to be discussed and discovery disputes are pretty rare. I think it’s a good idea in other types of cases, but in debt collection cases it'll only add to the cost of litigation without offering any meaningful benefit.

Optional court discovery conference

In addition to the mandatory discovery conference between the parties, the new rules give the court the option of having an early discovery conference with the judge.

I suspect that most judges will forego this conference in debt collection cases, but I could see some judges using it as an opportunity to get the parties together and urge them to settle.

How to negotiate a settlement with a debt collector

When you're facing a debt collection lawsuit, you usually have three options to get it resolved: (1) negotiate a settlement; (2) answer the lawsuit and challenge the case; and (3) file bankruptcy. If you decide to try to negotiate a settlement of the lawsuit, here a five tips to get the best possible deal.

If possible, negotiate a settlement in a lump sum

The best way to get a good deal from a debt collector is to offer a lump sum settlement. Debt collectors usually have blanket authority to settle debts for between 40% and 80% of the full balance if you pay the settlement in a one-time payment. If you're unable to afford a lump sum payment, the debt collector usually has the authority to agree to smaller monthly payments, often over a couple of years. But in exchange for the flexibility of a low monthly payment, you're probably going to have to pay the full account balance.

The last day of a month is the best day to get a great deal

Debt collectors have monthly goals that they must meet and there are significant consequences if they don't meet those goals. If a collector is short of their goal on the last day of the month, they may be willing to accept a lower settlement amount than they normally would. To take advantage of this, however, you'll probably have to make the settlement payment that day. So plan accordingly.

Insist that the debt collector confirms any agreement in writing, before sending them any money

Once you've reached a verbal agreement with the collector, ask them to send you confirmation of the agreement in writing before turning over your money. Read the agreement carefully to be sure that it actually contains the terms that you agreed to. Any reputable debt collector will be willing to confirm a payment arrangement in writing, so be wary of one who won't.

Keep a record of your payment

If you're paying with a personal check, get a copy of the canceled check from your bank. If you're paying with a money order or cashier's check, make a copy of the check and either note the date that you mailed it or, better yet, use certified mail. If you pay in cash or make the payment in person, be sure to get a receipt. Along with the collector's written confirmation, your proof of payment may be needed in the future to prove that you settled the account.

Be sure to get the proper follow-up documents

The appropriate follow-up documents vary depending on what point in the legal process you are when you settle the debt:

  • If you settle the debt before you get sued, the collector's written confirmation of the agreement, plus your proof of payment, should be sufficient.

  • If you settle the account after you've been sued, but before a judgment is entered, the collector should send you (and the court if the case has been filed) a dismissal WITH prejudice. A dismissal with prejudice means that the claim is fully resolved and can't be brought against you again. Don't accept a dismissal without prejudice if you've settled the account in full because there's a possibility that you could get sued again for the same claim.

  • If you settle the account after you've been sued and after a judgment has been entered, the collector should send you and the court a satisfaction of judgment. And if your wages were being garnished at the time you settled the account, the debt collector should quash the garnishment.

Why judges need to scrutinize debt buyers' evidence more closely (and how to do it)

One prominent defense against a debt buyer collection lawsuit is to challenge the admissibility of the debt buyer's evidence. Credit card billing statements and other account documents are generally considered hearsay under the rules of evidence. Although there is an exception for business records, a debt buyer must first provide specific testimony--from someone with personal knowledge--that demonstrates that the business records are accurate and reliable. Debt buyers are very good at providing the precise testimony required to trigger the business records exception. But admissibility shouldn't be about whether a debt buyer has recited verbatim the requirements of the exception. These requirements have been cheapened to the point of meaninglessness by debt buyers' boilerplate affidavits that are robo-signed by low-level employees who don't know the first thing about the legal concepts that they are testifying to. Rather, admissibility should be about whether the evidence is actually reliable.

Although a few judges focus exclusively on whether the debt buyer has met the technical requirements of the hearsay exception, in my experience the overall reliability of the evidence is the primary concern of most judges. Fortunately for debt buyers, many judges (not unreasonably, perhaps) believe that credit card billing statements are inherently reliable and are therefore willing to overlook technical deficiencies in a debt buyer's evidentiary foundation. I'm not blind to the other challenges that judges face when handling collection cases. In many contested cases, the consumer doesn't have an attorney and may not even challenge the admissibility of the debt buyers' evidence. When the consumer does raise the issue on his own, it's often in a poorly researched and incomprehensible brief obtained from a questionable source on the internet. Judges probably can't raise the reliability issue sua sponte, because then they risk veering from impartial decision-maker into the consumer's advocate. I also understand that budget challenges have placed enormous pressure on judges to get cases off their docket. An busy trial judge can be forgiven for holding her nose and granting a debt buyer's summary judgment motion, despite its evidentiary shortcomings, rather than scheduling a $2,500 collection case for a trial.] But alarming evidence has recently surfaced that suggests that these judges' perception of the inherent reliability of credit card statements might be misplaced.

A March 2012 story by American Banker reported that

JPMorgan Chase & Co. took procedural shortcuts and used faulty account records in suing tens of thousands of delinquent credit card borrowers for at least two years, current and former employees say.

In a similar story on Bank of America, AB discovered that

In the "as is" documents Bank of America has drawn up for [sales to debt buyers], it warned that it would initially provide no records to support the amounts it said are owed and might be unable to produce them. It also stated that some of the claims it sold might already have been extinguished in bankruptcy court. B of A has additionally cautioned that it might be selling loans whose balances are "approximate" or that consumers have already paid back in full.

Read the American Banker stories for yourself. They offer detailed, on-the-record information the provides a glimpse into the profit-at-all-costs mentality that plagues some banks' legal collection departments. At the very least, there is enough in the stories to cast serious doubt on the reliability of the banks' records. And debt buyers rely heavily on the perceived reliability of the banks' records because they don't have any way to independently verify records that they didn't create.

So what's the solution? Courts and legislators should resist the temptation to create a more comprehensive list of factors a debt buyer must establish to admit business records into evidence. It's far too easy for debt buyers to create another self-serving, boilerplate affidavit to meet any new requirements and have them robo-signed by the thousands. Instead, debt buyers should be required to provide specific testimony about why the records are accurate and reliable. This needs to be more than a vague and unverifiable statement that the debt buyer is familiar with the records, has reviewed them, and that they're accurate. To truly evaluate reliability--especially in light of the troubling allegations uncovered by American Banker--courts need much more specific testimony. What type of software is used? How often is it audited? When was the last audit? What was the error rate? What is the industry standard for acceptable error rate? This testimony should come from someone with actual knowledge of these systems--not a robo-signer who claims to have such knowledge--and the affiant should explain in detail how they came to possess such knowledge.

Sure, this heightened reliability analysis may slow down the freight train that is legal debt collection. But debt buyers, and the banks that they buy debt from, have earned the additional scrutiny after cutting corners with relative impunity for so long.

Garnishment in Minnesota

What is garnishment?

Debt collectors are allowed to garnish a consumer's bank account and wages to recover unpaid debts. Although the law permits garnishment before the entry of judgment in limited circumstances, the majority of garnishment in Minnesota occurs after a court judgment has been entered. The law provides strict procedures that a collector must follow and if they foul up the process, their garnishment may be wrongful.

To initiate a bank garnishment in Minnesota, a debt collector first sends a garnishment summons to the bank. The bank is required to seize all funds in the consumer's bank account on the day they process the garnishment summons. Consumers do not get notice of the garnishment until after the funds have been seized, which unfortunately can result in bounced checks and overdraft fees. In contrast, a wage garnishment is initiated by first sending a notice of intent to garnish to the consumer. The debt collector must then wait 10 days before sending a garnishment summons to the consumer's employer. Upon receipt of the garnishment summons, an employer must seize 25% of the consumer's after tax earnings for each pay period until the debt is satisfied.

What to do if you're being garnished

First, determine if any portion of the funds that were seized are exempt. Certain sources of funds are exempt from garnishment in Minnesota. For example, a debt collector may not keep most forms of need-based government aid, such as social security or energy assistance. In addition, a debt collector can only keep up to 25% of your wages, even after you deposited them in your bank account. Minnesota law also provides that child support, some insurance settlement proceeds, and many pension plans are exempt from garnishment. This is not an exhaustive list of exemptions and you should consult with a consumer lawyer to determine what, if any, exemptions you may claim. A consumer lawyer can also help you navigate the process to claim an exemption and get your exempt funds back. It is critical to act quickly because Minnesota law provides very stringent deadlines for claiming an exemption and if you fail to act in the required time, you may lose your ability to claim an exemption.

Another thing to consider if your bank account has been garnished is whether any of the funds that were seized belong to a joint account holder, such as a spouse or child, who has nothing to do with your underlying debt. Under current Minnesota case law, a debt collector may not keep funds in a bank account that were contributed by a joint account holder who is not responsible for the debt. And there is at least one Minnesota court that has ruled that a debt collector that seizes a joint account holder's funds to satisfy a debt they aren't responsible for may have violated the Fair Debt Collection Practices Act, or FDCPA, and other Minnesota laws.

You should also consider whether its possible to get the underlying court judgment vacated, or removed. If the judgment was obtained by default and you were never served with the lawsuit, you may be able to have a court vacate the judgment and return the garnished funds to you. Its also possible, under certain circumstances, to get a default judgment vacated even when you were properly served with the lawsuit. Consult with a consumer lawyer to determine whether you have a viable motion to vacate the default judgment.

If you can't get the judgment vacated, your only other options are probably to either negotiate a settlement or consider filing bankruptcy. A good consumer lawyer can walk you through you options and help you figure out the best one for your unique situation.

Why did a debt collector send me a 1099-C?

Some consumers are surprised to receive a 1099 from a lender or debt collector they dealt with in the last year, counting income to the consumer for debt forgiveness. The amount on Form 1099-C states the income "derived" from the forgiveness or settlement (for less than the full value) of a debt. Because the lender wrote off a debt (or a portion of a debt) it believed it was owed, it has the right (but not necessarily the obligation) to charge the income to you. Here are some exceptions:

  • A lender can't send a 1099-C for debt discharged in bankruptcy. If a debt was discharged in bankruptcy, the lender can't issue a 1099-C for debt forgiveness. However, let's say a debt was settled in January of 2010, and then you filed bankruptcy in February--then the debt forgiveness would be income.

  • You were "insolvent" when the debt was forgiven. The insolvency exception is a powerful tool for many people. If, on the day before the debt was settled or forgiven, all your assets (including your retirement accounts) were less than your total debts (including your mortgage)--then you don't have to count a 1099-C as income. File IRS Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness

  • The debt is disputed and the lender can't prove you owed it. If you don't owe the debt and the lender can't prove it's legit. you may be able to contest a 1099-C. Contact a tax attorney for help.

Claiming garnishment exemptions in Minnesota

Without question, dealing with garnishment is the most frustrating aspect of debt collection for consumers. Whether it's a bank or wage garnishment, having a debt collector seize your hard-earned money is a significant disruption to your life and can cause a great deal of stress. But there are a number of garnishment exemptions here in Minnesota, which protect your money from being garnished. In Minnesota, virtually all forms of need-based government aid are exempt from garnishment. Some of the most common forms of need based aid are social security, supplemental security income (SSI), energy assistance, and medical assistance (MA). Other types of need based aid that are exempt include: Minnesota family investment program (MFIP), emergency assistance and emergency general assistance (EA & EGA), work first program, general assistance medical care (GAMC), and Minnesota supplemental assistance (MSA). This isn't a complete list and virtually any form of government aid that you receive based on your income will probably qualify as garnishment exemptions under Minnesota law. Other common garnishment exemptions include any money you receive for child support, unemployment benefits, workers' compensation, and veterans' benefits. Some of the less common exemption sources of funds include retirement pensions (up to a certain dollar amount), disability, and insurance proceeds for damages to exempt property (usually your home or vehicle). And while it's not technically an exemption, under current Minnesota law a debt collector can't keep money from a joint account that doesn't belong to the judgment debtor.

Claiming garnishment exemptions for wage garnishment

If you're facing a wage garnishment, it's important to know that a debt collector can only take 25% of your after-tax wages. This exemption also applies if the debt collector garnishes your bank account after you deposited your pay check. And if you make only the federal minimum wage (or less) your wages are usually completely exempt from garnishment. Further, if you receive any form of need-based aid, such as those described above, your wages are totally exempt from garnishment. Minnesota law provides for this exemption if you currently receive need-based aid, or if you received any need-based aid in the last 6 months. This is an important provision for Minnesotans receiving energy assistance. Most recipients of energy assistance receive it from October through March, which make the recipient's wages exempt for the entire year if she re-enrolls in the program the following season.

To claim an exemption, it's important first to understand the garnishment process. For a wage garnishment, the debt collector must provide you with a form notifying you of their intent to garnish and an exemption form 10 days before starting the wage garnishment. To claim exemptions from a wage garnishment, all you have to do is write the appropriate garnishment exemptions on the form and mail it back to the debt collector. It's critical to do this immediately, or at least within 10 days of receiving the form. You should also provide proof of your exemption, such as your benefit notice, with the exemption form.

Claiming garnishment exemptions for bank garnishment

For a bank garnishment, you won't get notice of the garnishment until 5 days after the bank freezes your money. Fill out the garnishment exemption form that the bank and debt collector mail to you, noting the appropriate exemption. You also need to provide proof that the funds that were seized by the bank arose from an exempt source. This last point is the cause of considerable confusion for consumers. It's not enough to show the debt collector that you receive exempt money, you also have to prove that the funds that were actually seized contained this exempt money. Debt collectors will refer to this as "tracing". Sending the debt collector a copy of your bank statements that show the deposit of exempt funds, along with your benefit statements will usually accomplish the task.

If you merely mail the completed exemption form to the debt collector, and fail to provide the required tracing, the debt collector will probably object to your exemption and refuse to return your money. If this happens, you should schedule a court hearing in front of a judge to determine whether your funds are exempt. Court administration will help you set up the hearing and provide notice of the hearing to the debt collector. On the day of your hearing, be sure to bring proof of your exemption AND bank statements proving the funds seized were from an exempt source. Failure to do so could delay the court's decision or could lead to the court denying your exemption.

Finally, it's important to understand that claiming an exemption when you're not entitled to one could lead to the court ordering you to pay a penalty to the debt collector. Make sure any exemptions you claim are legitimate.

Can I be sued for my spouse's debt after divorce?

People going through divorce often wonder what's going to happen to their and their ex's debt. If they haven't resolved it before the divorce, people going through divorce will need to deal with their debt after divorce. In many divorce decrees, debt can be allocated--for example, the husband agrees to take responsibility for the Capital One card, while the wife agrees pay the B of A Visa. Life is good. But here's something that people often forget to tell you. If you were jointly liable on the Capital One card before the divorce, the divorce decree doesn't get you off the hook. Even though a judge ruled that you don't have to pay Capital One, the divorce decree doesn't change your legal obligation to CapOne. If your ex stops paying his monthly payments, the credit card company can still sue you. In addition, they can come after the full amount of the debt, not just half the balance, or just the purchases you made.

This doesn't mean you can't enforce your divorce decree and go after your ex for the money, but if your ex had the money to pay the card, wouldn't he have paid it to Capital One?

If you were wondering why divorce is one of the three biggest causes of bankruptcy (the other two are medical emergency and job loss) this might be a clue. If you're dealing with debt after divorce, going through divorce, or you're being sued for an ex-spouse's debt, give us a call.

Why doesn't this collection summons have a case number?

Many of our clients get papers that appear to be a collection summons, but don't realize that it's real because there's no case number. Minnesota has some unique rules about how a debt collection lawsuit is started, and these rules tend to trip people up. Here's what you need to know:

Why don't these papers have a case number?

In most other states, debt collectors have to file a case with the court before they can serve papers on the defendant. Minnesota state courts, on the other hand, have pocket filing. Pocket filing (also called pocket service) means that a collection summons can be served on a defendant without being filed with the court. The case will have to be filed with the court eventually, but not to start a case. No case number is assigned until the case is filed.

Don't ignore a collection summons that doesn't have case number

Just because there's no case number, it doesn't mean that the normal deadlines for a lawsuit don't apply. When you' receive a summons and complaint, case number or not, you have 20 days to respond. You do this by sending an answer directly to the plaintiff's lawyer in the case (the debt collector's law firm) rather than responding to the court.

There are serious consequences if you don't respond

If you don't respond to a pocket-filed lawsuit in time, the debt collector can get a default judgment against you--meaning that they win their case and they can try to collect the judgment. Debt buyers, in particular, get a lot of default judgments based on the failure to respond. Many people come to see us who are having their bank accounts levied or their wages garnished and they can't figure out why, since they didn't realize they were being sued in the first place.

If you've received legal papers, consider contacting a consumer rights attorney right away. 20 days to answer a lawsuit goes by very quickly, and an attorney can advise you of your options before a debt collector can get a judgment.

Different time limits on store credit cards may protect consumers

As we mentioned in another post, the statute of limitations for a credit card debt is six years in Minnesota. This means that a debt collector can only sue a consumer on a credit card debt within the six years after default on the card. Once six years have passed, there's very little a collector can do to get the money. Not very many people know that there is a separate, shorter statute of limitations of four years for store credit cards. This is because store cards are governed by the Uniform Commercial Code (UCC), a set of laws that govern installment sales of goods, among other things. So figure out whether the shorter limitations period applies, we need to figure out whether the card was a sale of goods (four years) or money loaned (six years). Some cards are tricky--for example, Walmart has both a store credit card and a Visa card. To figure out which limitations period applies, we ask the following questions:

  • Did the card have a Visa/Mastercard/Amex/Discover logo? If not, the four-year period may apply. If it's been years since you cut up the card and you can't remember whether there was a logo on it, we can generally use the card number to find out. Amex cards begin with the numbers "34" or "37." Visa cards begin with 4. Mastercard begins with 5. Discover begins with "6011" or "65." If the account number began with any other numbers, it most likely was a store card.

  • Did you apply for the card at the cash register? If you did, it's easier to argue that you bought goods on installment and therefore it was a store card. If you applied for the card from home, it may be more likely that it was a credit card.

  • Could you take a cash advance on the card? Store credit cards don't allow you to take cash advances. Credit cards generally do. If you couldn't take a cash advance, the four-year period may apply.

If a collector has sued you after the end of the limitations period, not only is it a defense to the lawsuit, but in some cases it is a violation of the Fair Debt Collection Practices Act if they knew that the debt was too old to be sued on.

New rule protects federal benefits from bank levies

Starting May 1, 2011, banks will no longer be able to turn over some federal benefits held in their accounts to creditors. Previously, when a creditor got a bank levy against a consumer, they could take all the funds in an account, and the consumer would have to use a time-intensive process to claim a state or federal exemption to get the funds back. But in the meantime, the consumer could not access that money. The new rule issued by the U.S. Treasury Department will require banks to check, before turning funds over to a creditor, whether federal benefits (Social Security, SSI, VA benefits, etc.) were deposited into the account within the previous two months. If so, the banks will not be able to send those two months of federal benefits to the creditor. The new rule does not apply to garnishment by a child support agency.

In addition to the new protection, money not protected by the new rule may still be protected under state law. Consumers will still need to fill out the exemption notice for exempt benefits beyond the ones covered by the new rule.

One very important note--this new protection will not apply to federal benefits deposited by paper check. To get the protections, a recipient must sign up for direct deposit or a Direct Express card. Also, the protection will not apply to funds transferred to another bank account. So if you receive the money in your checking account, and transfer it to your savings account, it is no longer protected by the new rule.

How to respond to a debt collector's requests for admission

A favorite litigation tactic used by collection lawyers in a debt collection lawsuit is to serve an unsuspecting consumer with requests for admission. These are typically a series of statements that you are asked to admit or deny. In other forms of litigation, requests for admission are typically used to figure out what facts are disputed in the case. But debt collectors don't use requests for admission to learn more about what facts you dispute. In fact, they could probably care less about your answers and would prefer that you didn't answer them at all. Why? Because if you don't answer the requests for admission within 30 days, every statement in them is then considered to be true. So debt collectors structure them in a way that if you don't answer, you've admitted each element of their case. And debt collectors are well-aware that the majority of people will not answer the admissions because they don't understand the serious consequences of not doing so.

This is just another example of debt collectors using a court rule for something other than its intended purpose. I've seen debt collectors ask judges to rule in their favor based only on the consumer's failure to respond to the requests for admission. They didn't produce any billing statements, applications, terms and conditions--any evidence. And though I suspect that most judges know exactly what the debt collector is up to, their hands are tied to a certain degree by the court rules.

So the lesson here is to respond to every request for admission within 30 days. You only have to admit the statement if you know for a fact that its true. For example, if the statement asks you to admit having a credit card with a specific 16-digit account number, unless you know for sure that is your account number, you can probably deny the request. Of course, if you have copies of your billing statements with that account number on them, you'll probably have to admit that request.

A debt collector is taking my paycheck. What do I do?



One of the most frequent reasons we get called to help people fight debt collectors is when a person's wages are taken hostage. It's called garnishment, and it's one of the most powerful ways a debt collector can get your money. A garnishment can hit unexpectedly, and can cause lots of problems, especially that you might not be able to make your bills for the next month. Here are some of the rules around garnishment, and some tips to help you deal with it.

You can't be garnished unless you've been sued

To get a wage garnishment against you, a debt collector must first sue you. They can win their case by fighting you in court, but occasionally, you didn't get notice of the lawsuit and the collector can get a default judgment because you didn't show up for court. If a debt collector takes your wages before you've been sued, it's most likely not a garnishment, and therefore is probably illegal. To see if you have a judgment against you, check out the Minnesota courts judgment search.

They can't take your whole paycheck

In Minnesota, if a debt collector wants to take your wages, it must send you a "wage exemption notice" at least 10 days before it takes your money. You may be exempt from garnishment if you received public benefits in the past six months or if you were recently released from prison). If that's the case, you must fill out the exemption notice and return it to the collector's attorney within 10 days.

If you aren't fully exempt, there are still limits to what can be taken. You can keep 75 percent of your "disposable earnings"--i.e. your gross income minus your taxes--or 40 x the minimum wage per week (currently $320).

Child support has different rules

If you are being garnished for child support, forget everything I've said. More than 50 percent of your wages can be taken, and there are very few ways to escape being garnished.

There are ways to put a stop to garnishment

One way to stop a garnishment if you haven't appeared in court yet is to reopen a default judgment. This may be something you can do on your own, but it's best to consult an attorney because it can be tricky.

It is also possible to settle the debt for less than you owe. We can help you negotiate judgments.

Another way to stop a garnishment is filing bankruptcy. Not only will a Chapter 7 or Chapter 13 bankruptcy stop wage garnishment in progress, but you also can recover money that was garnished within the last 90 days.