Will Bankruptcy Stop a Credit Card Lawsuit?

Bankruptcy Attorney St. Petersburg Florida

These days, it is crucial to possess at least one credit card. Try renting a car without one. If used properly, credit cards can be a very valuable tool. Some credit cards carry “rewards programs” that bring with them some pretty useful benefits. For example, if you use your credit card for everyday living expenses, and then pay it off in full each month (so as to not incur any interest charges), you can earn enough “points” to go on a vacation every year. There are many advantages to properly using a credit card. In a perfect world, we would use our credit cards wisely, reap tremendous benefits, and nothing bad would ever happen to us. Doesn’t that sound nice?

As you are no doubt aware, we do not live in a perfect world. “Life” gets in the way of even our best plans. Be it injury or illness, marital problems, job loss, or poor financial planning, there are all kinds of reasons that could lead someone to seek legal advice from someone like myself. Let’s look at an example of where someone started out with good intentions, but unforeseen circumstances led them to a credit card nightmare:

“Mr. G” had very good credit. So good, in fact, that a major credit card company (we’ll call them “Bank of USA”) offered Mr. G a pretty good deal. If Mr. G put at least $5,000.00 on his new Bank of USA credit card in the first 90 days after activating the card, Bank of USA would give Mr. G 50,000 “points” that Mr. G could use for travel (airfare, hotels, car rental, etc…). They also gave him a pretty low-interest rate, so even if Mr. G didn’t pay off his balance each month, he wouldn’t have to pay very much in interest. Mr. G had a pretty well-paying job in St. Petersburg, Florida, and lived a pretty stable life. He quickly realized that the more put on his Bank of USA credit card, the more points he would receive. Mr. G was planning a fishing trip in Costa Rica at the end of the year, and his goal was to pay for the trip using only credit card points. In a matter of six months, Mr. G had incurred credit card charges of $50,000.00. Normally he liked to pay off his balance every month, but with Christmas coming, he figured he would just make a few minimum payments so he could free up some money for presents for his family. That’s when things took a turn.

Mr. G was fishing on the beach one day when he stepped on a piece of glass, slicing open his foot. It hurt a bit but didn’t seem like a big deal. In the days to come, he realized that his foot was infected. The doctor told him that he had contracted a rare blood disease. Mr. G’s health quickly deteriorated. The doctors told him that he would have to stay in the hospital for a prolonged period of time. After using up all of his allotted “sick time” at work, his job told him they couldn’t keep him employed and had to replace him. Suddenly Mr. G found himself unemployed, hospitalized for a long period of time, and all of his money was going to co-payments, deductibles, and other unforeseen expenditures. The very last thing on Mr. G’s mind and the lowest priority for Mr. G at that moment was his sizable credit card bill with Bank of USA.

Mr. G had to skip a payment. As almost all banks will do as soon as a payment is missed, Bank of USA raised Mr. G’s interest rate on the card from the low percentage rate to more than 20 percent. The minimum payments skyrocketed and now it was impossible for Mr. G to catch up, especially with no income. After a few more missed payments, Bank of USA turned the account over to a third party debt collector, who called Mr. G repeatedly. Once the debt collector realized that Mr. G wasn’t going to pay them, they hired a lawyer and filed a lawsuit. It was at this point that Mr. G decided to contact a lawyer.

This example is not all that uncommon. One seemingly minor life event can lead to catastrophic consequences. So what are the options available to you if you are facing a lawsuit for missed credit card payments? Assuming there are no good legal defenses to the lawsuit (you actually do owe it), then filing for bankruptcy might be your best option.

The good news is that once you file for bankruptcy, an Automatic Stay goes into effect. Think of an Automatic Stay as a tool used to freeze any and all lawsuits pending against you. While an automatic stay is in place, the credit card company, or third party debt collector, is unable to prosecute their case against you. They are now subject to the protections afforded by the bankruptcy court. The vast majority of individuals filing for bankruptcy do so under what is known as Chapter 7 or Chapter 13. While these two different kinds of bankruptcy have differing advantages and consequences, BOTH Chapter 7 AND Chapter 13 will immediately freeze a credit card lawsuit with an Automatic Stay.

Keep in mind that consulting with a bankruptcy lawyer, paying a lawyer, giving the lawyer financial documents, or signing a bankruptcy petition, will NOT give you the protection you need. It is not until a bankruptcy petition is actually FILED with the bankruptcy court where you will receive an Automatic Stay. This distinction is very important. You will come across many bankruptcy lawyers in Saint Petersburg, and all over the state of Florida, that will offer you what seems to be very enticing “payment options.” Before agreeing to any such payment plan, be sure to find out exactly when the lawyer intends to file your bankruptcy. A credit card lawsuit will contain strict timing deadlines. If you let the case go too long, without filing the bankruptcy to stop it, you could face severe consequences, such as wage garnishment.

Don’t wait until it is too late. If you are facing a credit card lawsuit, or fear that one may be coming soon, the time to act is now. Contact the experienced lawyers at Berkowitz & Myer so you can learn how the bankruptcy laws might help you with your particular financial situation. No two clients are the same and no two situations are the same. We look at each individual client and their unique state of affairs, and we come up with a plan of attack to guide them through this difficult time. The best part is that there is no cost to you, the client, for your initial consultation. You can meet with a lawyer, find out how the laws can help you, and not pay anything. We look forward to hearing from you.—

Jesse D. Berkowitz, Esq.

Attorney at Law

5 Signs Creditors Are Robo Calling Your Cell Phone

Frequently, clients ask me the question: “how do I know if creditors are robo calling my cell phone?” As some of you may know, this is an important question to ask because if creditors are robo calling (a/k/a autodialing) your cell phone without your consent, they are potentially violating the Telephone Consumer Protection Act (“TCPA”). This could entitle you from up to $500 to $1,500 per call. In this blog, I will share the five telltale signs that indicate when a creditor is most likely autodialing your cell phone.

Signs

1. Dead Air

When a creditor or debt collector calls your cell phone and you answer, if you have to say “hello” a few times before they respond, that is a good indication they are robo calling your cell phone. This is known as dead air. Sometimes, you will hear a clicking sound- this is the process of the call being transferred from the computer system to a live representative. Normally, there will be a few seconds of dead air. Other times, a live representative will never come on the line-the entire call will be dead air.

2. Automated Message

When you answer the call, an automated message begins to play and states something along the lines of: “hello, this is Company X calling for Jon Doe. You have a current balance of X amount of dollars which is past due. Please call 1-800-XXX-XXX to make your payment.” This message will be in a robotic voice, and you won’t be able to speak with a live representative.

3. Pre-Recorded Voicemail

In this scenario, you miss the call. When you listen to your voicemail, a pre-recorded message plays similar to the automated message above.

4. Calls Are Multiple Times Each Day

In this instance, you haven’t answered any of the calls yet, but they are coming multiple times a day and at very similar times each day. For example, they are calling your cell phone in the morning, around noon, and during evening time. If you pay attention, the calls could be almost at identical times each day. This is because your cell phone number is on an automated computer system which places calls at specific times. 

5. Creditor Tells You

This one seems obvious, but sometimes when consumers ask why they are receiving so many calls, the creditor will simply tell them because they are on an automated system- the computer is placing the calls.

Caveat

As anything else in the law, there is an exception. Recently, in a couple of cases in Florida, courts have ruled that a certain type of system called the LiveVox Human Call Initiator (“HCI”) System is not considered an Automated Telephone Dialing System (“ATDS”). In other words, the HCI System is exempt from the TCPA because it requires “human intervention”.  Fortunately, the majority of creditors have not switched over to this system yet. Having sued many of the creditors and debt collectors, I know the types of systems these companies use.

What To Do

In a previous blog, I described exactly what you need to do if you are receiving collection calls from creditors and debt collectors. In short, you need to document these calls (number, date, time) and tell them to “stop calling your cell phone”. If they continue to call your cell phone after you have told them to stop, they are most likely violating the TCPA, which could entitle you from up to $500 to $1,500 per call.

If you are receiving collection calls from creditors and/or debt collectors, you need to contact a consumer protection attorney immediately. I have sued the vast majority of these companies and have the knowledge and experience to maximize the recovery in your potential case. Call me at 727-344-0123 or email me at Jon@berkmyer.com for a free consultation of your potential case.

Strauss v. CBE Group, Inc. et alPozo v. Stellar Recovery Collection Agency, Inc.

Arbitration –The Consumer Rights Kryptonite

Have you ever been excited to buy a new car or go on a shopping spree with the new credit card you just received in the mail?  Of course you have- that was a rhetorical question.  What is not exciting is when some unforeseen circumstance causes you financial hardship.  Maybe you lost your job or had a serious medical injury.  Either way, you are strapped for cash and can no longer pay for that new car or the credit card bill due at the end of the month.  Inevitably, once you miss your first payment, you can bet the collection calls will begin.  If you read one of my previous blogs, you will know exactly what to do and what to tell these creditors (basically, stop calling) when they call.  However, more times than not, these creditors will continue to call because most consumers are unaware of protective collection statutes that exist in the state of Florida.  That is a topic for another time though.  The real issue is this- you have told these creditors to stop calling, and thus, most likely have a cause of action against them.  Here is where it gets tricky.  Almost every creditor contract (car loan, credit card, etc.) has what is called an arbitration clause.  What is an arbitration clause and how does it affect my rights?

Arbitration Clauses

An arbitration clause is a clause in a contract that in short says, “you the consumer agree to not sue the creditor in state or federal court for any issue that arises as a result of the instant contract.”  Instead, you the consumer agree to file a demand for arbitration.  That doesn’t seem too bad, right?  Wrong!  Arbitration clauses are pro-corporation/big business.  Many of the arbitrators who hear these cases come from a defense attorney (creditor attorney) background and are not pro-consumer.  The converse of this is that in state and federal court, juries tend to be pro-consumer and anti-big corporation/creditor.  This is typically where you see your big verdicts against corporations because juries are common folk who like to stick it to these large companies. Thus, you can see the importance of being able to litigate your case in state and federal court versus in arbitration.

What can I do to avoid Arbitration?

Most arbitration clauses are bulletproof.  It is very difficult to successfully challenge them in court.  With that said, there are a couple ways to avoid arbitration and to litigate your case in state or federal court.  The first way is to opt out of the arbitration clause once you sign a contract with a creditor.  Normally, you have thirty (30) days from the time you sign the contract to opt out of arbitration.  This is very impractical though because most consumers do not foresee suing the creditor they just entered into a contract with.  The second way is to file your case in small claims court.  Almost all arbitration clauses contain a small claims exception, which allows consumers to proceed in small claims court.  The catch with this is that if your case is worth more than $5,000, you cannot file in small claims court because it exceeds the jurisdictional limit.

What To Do

If you think you have a case against a creditor, you should contact a consumer protection attorney.  For what it is worth, many consumer protection attorneys in the St. Petersburg, Florida area have not arbitrated a case through a final hearing- I have.  Thus, I have the necessary experience to push your case to the very end and maximize the value of your case. If you think you have a case, call me at 727-344-0123, or e-mail me at jon@berkmyer.com and tell me what has happened.    

Top Three Florida Debt Collection Violations

I have seen creditors violate Florida’s consumer protection statute (“FCCPA”) in almost every most possible manner.  That being said, in my experience, the following three violations occur most frequently:

  • Harassing phone calls – This is by far the most prevalent creditor violation that I come across.  The law is not exactly black and white on what constitutes harassment under the FCCPA.  There are many factors that come into play when determining if a creditor is legally harassing you.  I can say with confidence if you have told a creditor to stop calling at least three times, and they continue to call you, there is a good chance you have a harassment case against the creditor.  Essentially, you have to be able to show a pattern.  For example, if you have told a creditor to stop calling three times and explained you cannot afford to pay the subject debt, why else are they calling?  I make the argument that they are calling solely to harass you.  I have yet to lose this argument.
  • Calls to the workplace – This section of the statute is very tricky as well.  For instance, if you listed your employer’s telephone number on the creditor’s contract, creditors will argue that they had written permission to contact your employer in an attempt to collect the subject debt.  Further, if they contact you directly at work, this does not violate the statute either.  However, if they contact a third-party such as a colleague or your boss, they most likely have violated the statute even if they didn’t discuss the debt.
  • Knowingly attempting to collect a debt that is not owed – The key word here is “knowingly”.  Creditors have to have actual knowledge that the debt they are attempting to collect is not owed.  This seems to happen many times with cable and internet companies.  These companies will state you owe money for services rendered.  Shockingly, after informing them that you never had their services or you paid your bill, they will continue attempting to collect the subject debt.  This is a violation.
  • Remedies – Pursuant to the FCCPA, a consumer is entitled to up to $1,000 in statutory damages, any actual damages, attorney’s fees, and costs.  Simply put, you never will have to pay attorney’s fees or out-of-pocket expenses in these types of cases, and in many scenarios, you will be awarded up to $1,000 in statutory damages.

What To Do If You Fall Into One Of These Categories

If you are victim of one of these violations, you need to speak with a consumer protection attorney immediately. What separates me from many other consumer protection attorneys is, I personally speak with you and evaluate your case. At bigger firms, you will be lucky to ever speak with an attorney.  Most of the time, you will be communicating with a legal assistant. If you think you have a case, call me at 727-344-0123, or e-mail me at jon@berkmyer.com and tell me what has happened.

1 www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0500-0599/0559/Sections/0559.72.html

When Are Debt Collection Calls Considered Harassment?

These days, nearly everyone has some form of debt, whether it is credit card debt, a mortgage payment, or a car loan. Sometimes, unforeseen circumstances arise in life which prevents many from paying their bills on time. For example, maybe you were laid off from your job? Or, maybe you were injured and cannot work? Regardless of your situation, not paying your debts on time will inevitably lead to collection calls. As many of you know, some of these collectors can be more aggressive and call more frequently than others. Thus, the question becomes: when are do these collection calls rise to the level of illegal harassment?

Harassment under The Florida Consumer Collection Practices Act (“FCCPA”) and the Fair Debt Collection Practices Act (“FDCPA”)

The FDCPA (federal statute) and the FCCPA (state statute) are the two statutes which protect consumers from harassing collection calls in the state of Florida. Under 15 U.S.C. §1692d(5) of the FDCPA, a debt collector is prohibited from causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number. Under Florida Statute 559.72(7) of the FCCPA, creditors and debt collectors shall not “willfully communicate with the debtor…with such frequency as can reasonably be expected to harass the debtor…” Legally, collectors have the right to contact you and attempt to collect a debt that is owed. To that effect, there is an abundance of case law across the country which states even receiving multiple calls a day, in and of itself, does not violate either statute cited above. There has to be action on behalf of the debtor in order for collection calls to be considered “harassing”. The easiest way for a debtor to convert legal collection calls into illegal collection calls is to verbally tell collectors to stop calling- yes, it is that easy. As almost everything else in the law, there is no black-and-white rule as to how many times a debtor has to request a collector to stop calling before it is considered harassment. Again, collectors have the right to call and attempt to collect an owed debt. From my experience, I can tell you it needs to be at least three (3) times in order to have a viable claim. Debtors need to be able to show a potential judge or jury that they repeatedly told a collector to stop calling, and the collector refused to do so. In a previous blog, I explained why it is very important to document each call from a collector- you want to have concrete facts, rather than generalizations as to when this conduct occurred.

What To Do If You Are Receiving Collection Calls

If you are receiving collection calls, you need to speak with a consumer protection attorney. Almost all attorneys will provide a no-cost consultation to evaluate your case. Undoubtedly, you will be advised to start logging calls in an effort to build a case against a harassing collector. I deal with these types of cases on a daily basis. If you are receiving collection calls, call me or simply email me at jon@berkmyer.com and tell me what has happened.

no-cost consultation: (727) 344-0123
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