The Star Tribune’s lead story yesterday discussed the massive debt buyer lawsuit industry, especially in Minnesota. A focus in the article was the dire consequences of debt buyer lawsuits for consumers, even when debt buyers screw up, compared with the lack of real accountability for debt buyers when their claims are bogus.
“When consumers make small mistakes, such as failing to answer a lawsuit, the full power of the courts comes down on them,” said Sam Glover, a consumer rights attorney in Minneapolis. “But when a debt buyer flouts the law, it rarely experiences any consequences and keeps collecting as if nothing happened.”
The best course of action is to answer a debt collection lawsuit right away. Or if the time to answer (21 days) has already passed, talk to a consumer rights attorney right away.
This week, Sam was elected to the board of directors of the Volunteer Lawyers Network. VLN helps people of limited means get help with their legal problems at no cost.
Sam has been involved with VLN for years. We generally have at least one VLN case or project at all times. Recently, Sam helped VLN build a forms-based clinic to help consumers sued by debt buyers deal with the initial steps of debt collection litigation. He recently completed a bankruptcy for a VLN client, and provides mentoring for other VLN lawyers on consumer rights matters.
Sam looks forward to contributing lessons learned developing an innovative private practice to VLN’s public service model.
Our client was the victim of identity theft on a Sears account, but debt buyer MRC Receivables Corporation hired Messerli & Kramer to sue our client, anyway. Our client explained to Messerli & Kramer that the card was not hers, but never served a formal answer.
As a result, in 2009, Messerli & Kramer, P.A. obtained a default judgment against our client for a debt she did not owe.
In February, our client came to us looking for help, and we moved to vacate the judgment. A few days before the court hearing, Messerli & Kramer offered to dismiss the case with prejudice, a great result for our client!
River City Financial, LLC, is a Minnesota debt buyer. The debt collection law firm of Messerli & Kramer, P.A., tried to start a lawsuit for River City Financial against our client back in 2001. But Messerli & Kramer never filed the lawsuit—at least not until 2007, six years later, when it finally asked for a default judgment. Two years after that, Messerli & Kramer started garnishing our client’s wages.
The problem was that Messerli & Kramer’s process server never served our client with the lawsuit.
Randall Ryder argued the motion in Hennepin County District Court, and the judge ruled from the bench that the judgment should be vacated and the lawsuit dismissed, with prejudice. It was an excellent—and just—result, and our client was understandably thrilled!
Over the weekend, personal finance columnist Kara McGuire wrote about the Credit CARD Act of 2009, which takes effect on February 22nd. Although there is much good in the bill, she cautioned consumers about some things not in the bill. She quoted Sam Glover in the article:
Minneapolis consumer attorney Sam Glover, who blogs at CaveatEmptorblog.com, wishes the act included interest rate caps. “I don’t understand why 30 or 60 percent interest isn’t enough and Congress isn’t willing to say it,” he said.
New credit rules are no reason to let guard down