collections

From today's Muncie Star-Press:

BREAK-IN: A Muncie man was arrested Saturday afternoon, accused of dealing several thousand dollars worth of property from acquaintances.

The suspect, Stephen E. Nipper Jr., 27, 2611 S. Tacoma Drive, was preliminarily charged with burglary, a class B felony, after police found him trying to sell property stolen from a home at 307 E. Harvard Ave.

The victims said Nipper had dropped his son off at their residence and apparently came back and took property that included a shotgun, gold and diamond jewelry and cameras, police officer Melissa Pease reported.

Nipper claimed the victims owed him money for work. He remains in jail without bond.

Folks, small claims does not cost that much and if you are owed more than $3,000.00 then a lawyer is still cheaper than sitting in jail. Think about it.

Doug Masson over at Masson's Blog has a post titled Collection Law Math. Check it out if you are debtor being sued or an attorney who handles collection cases. Masson explains the point at which one's wages are garnishable and does it quite intelligibly. When I was doing consumer bankruptcy work, I had the hardest time explaining to some potential clients that they were judgment proof. Judgment proof meaning that they had no assets for attachment and insufficient wages for garnishment.

Using contempt to collect a debt is not allowed under Indiana law. Contempt permits imprisonment. Indiana forbid imprisonment for debt in 1851.

Contempt requires the intentional and willful disobedience of a court order. Therefore, contempt and debt collection can only intersect after there is a judgment on the debt.

The process of collecting the judgment is either by way of the judgment debtor agreeing to their debt or initiating involuntary methods such as proceeding supplemental to execution, garnishment, attachment and/or execution.

A debtor can agree to make payments on a judgment and the court can incorporate that agreement into an Order. I know of cases where the trial judge has made an Order on the debtor's promise to pay and the attorney then used contempt when the debtor failed in amking payments.

This differs from the situation where the debtor ordered into court for a hearing does not appear. Contempt properly exists for these situations. The debtor faces imprisonment not for the debt but for disobeying the court's Order to appear.

In my opinion, the collection attorney using contempt for collecting a debt violates the federal Fair Debt Collections Practices Act (the FDCPA). The FDCPA forbids the use of illegal means collecting debts.

Using contempt for debt collection has the collections violating Art. I, §22. That the debtor only suffered the threat of imprisonment is not a defense for the collection attorney. Case law shows that the threat of illegal activities suffices for a successful FDCPA action. All the collection attorney does by using contempt for collecting a debt is create a credible suit against one's self under the FDCPA.

One final point, using contempt for debt collection serves no truly useful purpose. Many methods exist for the competent collections attorney to collect a debt and contempt lacks any utility comparable to garnishment or attachment. a competent collections attorney also knows what debts can be collected or not. Striking terror in the heart of debtors seems the only use for contempt which is not useful when the purpose of a collections attorney is to get the money.

If some recent inquires indicate anything, collection agencies must be dusting off old accounts. A spate of calls ask if collection agencies can collect a bill 6 - 7 years old. The only answer is: "Yes, they can."

Statute of limitations have nothing to do with bill collectors. They have everything to with the courts and law suits. Even then, a statute of limitation does not bar a law suits. Barring a law suit means that the law suit cannot be filed.

A statute of limitation acts as an affirmative defense. An affirmative defense is a defense that has to be made when a suit is filed. Do not raise the defense, then you lose it.

A bill collector calling on the telephone or sending a dunning letter is not covered by any statute of limitations statute. People can make the choice not to pay an old bill and hope that they get it right when suit is filed - assuming they do not hire an attorney.

Nor does collecting an old debt violate the Fair Debt Collection Practices Act. The FDCPA says that the debt collector cannot attempt to collect a debt the collector knows is barred by the law. Since Indiana law does not bar collecting a debt that might have a statute of limitations defense, the debt collector is not attempting to collect a debt forbidden by the law.

The creditor continues trying to collect a debt that is fifteen years old. The law says the statute of limitations for a written contract is ten years and six years for an account. What gives?

The statute of limitations say when a creditor must start collecting a debt, not when it must be completed. Otherwise, the debtor can merely skip about and relieve themselves of their obligations.

Statute of limitations exist for getting the person with the injury to act rather than wait.

A statute setting the time limit for filing a lawsuit bars a claim after that date. That kind of statute is not a statute of limitations.

Attorneys call a statute of limitations an affirmative defense. Defendant has the job of pleading the defense and proving it. The plaintiff wins if defendant either does not plead or pleads but does not prove. (See Indiana Trial Rule 8(c)).

JOHN R. SAND & GRAVEL CO. v. UNITED STATES (html format) gives us the example of a statute creating a deadline for filing a lawsuit against the federal government. The following paragraphs from the United States' Supreme Court opinion contain the facts:

The Government initially asserted that petitioner's several claims were all untimely in light of the statute providing that "[e]very claim of which the United States Court of Federal Claims has jurisdiction shall be barred unless the petition thereon is filed within six years after such claim first accrues." 28 U. S. C. §2501. Later, however, the Government effectively conceded that certain claims were timely. See App. 37a-39a (Government's pretrial brief). The Government subsequently won on the merits. See 62 Fed. Cl. 556, 589 (2004).

Petitioner appealed the adverse judgment to the Court of Appeals for the Federal Circuit. See 457 F. 3d 1345, 1346 (2006). The Government's brief said nothing about the statute of limitations, but an amicus brief called the issue to the court's attention. See id., at 1352. The court considered itself obliged to address the limitations issue, and it held that the action was untimely. Id., at 1353-1360. We subsequently agreed to consider whether the Court of Appeals was right to ignore the Government's waiver and to decide the timeliness question. 550 U. S. ___ (2007).

The court cannot raise the issue of an affirmative defense but it can always raise the issue of having jurisdiction over a case. Justice Breyer explains the legal differences here:

Most statutes of limitations seek primarily to protect defendants against stale or unduly delayed claims. See, e.g., United States v. Kubrick, 444 U. S. 111, 117 (1979). Thus, the law typically treats a limitations defense as an affirmative defense that the defendant must raise at the pleadings stage and that is subject to rules of forfeiture and waiver. See Fed. Rules Civ. Proc. 8(c)(1), 12(b), 15(a); Day v. McDonough, 547 U. S. 198, 202 (2006); Zipes v. Trans World Airlines, Inc., 455 U. S. 385, 393 (1982). Such statutes also typically permit courts to toll the limitations period in light of special equitable considerations. See, e.g., Rotella v. Wood, 528 U. S. 549, 560-561 (2000); Zipes, supra, at 393; see also Cada v. Baxter Healthcare Corp., 920 F. 2d 446, 450-453 (CA7 1990).

Some statutes of limitations, however, seek not so much to protect a defendant's case-specific interest in timeliness as to achieve a broader system-related goal, such as facilitating the administration of claims, see, e.g., United States v. Brockamp, 519 U. S. 347, 352-353 (1997), limiting the scope of a governmental waiver of sovereign immunity, see, e.g., United States v. Dalm, 494 U. S. 596, 609-610 (1990), or promoting judicial efficiency, see, e.g., Bowles v. Russell, 551 U. S. ___ , ___-___ (2007) (slip op., at 7-8). The Court has often read the time limits of these statutes as more absolute, say as requiring a court to decide a timeliness question despite a waiver, or as forbidding a court to consider whether certain equitable considerations warrant extending a limitations period. See, e.g., ibid.; see also Arbaugh v. Y & H Corp., 546 U. S. 500, 514 (2006). As convenient shorthand, the Court has sometimes referred to the time limits in such statutes as "jurisdictional." See, e.g., Bowles, supra, at ___ (slip op., at 5).

You can find most of Indiana's statute of limitations by following this link here.

Take a look at Court Imposes Strict Deadline in Lawsuit, if you want to read more about JOHN R. SAND & GRAVEL CO. v. UNITED STATES.

Between a telephone call last evening to reading After losing lawsuit, practice may dissolve this morning, I decided a quick post was needed.

After graduating from last school, I worked for a local collections attorney for about a year. I had no idea that a lawyer could have a practice just collecting money. Law school taught us to know the elements of case, write an appellate brief, and argue a case. Among the many things not taught us was that a plaintiff (the person suing) in a contracts or torts case wants money.

For the non-lawyers reading this, the law requires a showing of injury that can be quantified into dollars. We call that damages. There are other elements, too. In a contracts case, those other elements are duty and breach.

I break collections into two categories. First, Those cases having a fight and the question will be if we when where does the money come from? One can win the battles but lose the war. History is full of examples of this: Germany in World War I, Germany in Word War II until 1941, the American Revolution and an ancient Greek general who gave his name to Pyrrhic victory. The case reported by the Indianapolis Star sounds like one of these:

A Marion County jury awarded Pollack $480,853 in damages after a 21/2-day trial. With interest dating to 1996, when Pollack left the practice, the claim could top $1 million.

An attorney for the 17- employee practice, based on the Northeastside, has proposed to creditors that the practice close its doors and liquidate its assets, which it estimates are worth about $300,000, according to a letter Pollack received from his attorney.

Under the plan, Pollack would collect just $219,000 of his judgment paid over 10 years. Pollack, as a result of his civil damage award, is the practice's largest creditor.

An attorney for Cardiac & Vascular, Michael McCrory, said, "I am not prepared to make a comment" on the likelihood the practice will close and liquidate its assets. The practice was closed for business Monday and Tuesday, and its administrator, Tim Hare, did not return a call seeking comment.