NJ Debt Collection Lawsuits: Common Myths vs. Reality

I sometimes visit some of the websites & message boards which are geared to assisting defendants with their cases pro-se (i.e, without an attorney’s representation).

Sadly, I generally see a great deal of misinformation, falsehoods, and just downright terrible advice being tossed around on these sites by non-lawyers (or even worse, by licensed attorneys who lack New Jersey debt defense experience).

I have had clients come to me who have unfortunately attempted to handle their own debt defense cases against NJ collections firms like Pressler & Pressler, Foster Garbus & Garbus, Rubin & Rothman, Apothaker, etc and have lost and now owe a judgment for the full amount. Had they called me sooner, the outcome would likely have been far different.

Here are some typical problems that I see with “free” advice on the internet about debt cases:

Myth #1 : If the plaintiff is a bad debt buyer such as Midland Funding, Portfolio Recovery Associates, Absolute Resolutions, Cavalry SPV, etc. they can never prove their case, as they lack the necessary documentation.

Reality: It is true that the debt buyers routinely lack the paperwork related to the original account. However, it is also not uncommon that they do produce the paperwork from the original creditor. In New Jersey courts, if the debt buyer can produce a written Assignment of Debt and the last billing statement from the original account, they will likely file a Motion for Summary Judgment and attempt to have the Court decide your case on their motion papers alone, without a trial.

Opposing a Motion for Summary Judgment requires careful examination of the plaintiff’s motion and supporting paperwork. The key is to create some issue of fact that will convince the judge that the case requires a full trial. Before doing this, you need to serve Interrogatory questions on the plaintiff as well as a Demand for Document Production. The plaintiff is then required to respond to these requests, or else risk having their case dismissed. This information must be asked for in a certain way and there are strict timeframes which also must be complied with.

And an opposition to a Motion for Summary Judgment must be in writing, supported by a signed Certification (i.e, sworn to by you), and will generally require an oral argument before the judge. Remember, you will be held to the same standards and Court rules as a licensed attorney in your paperwork and in Court.

Myth #2  Hiring an attorney for a Special Civil Part debt lawsuit is expensive.

Reality: It is almost always the case that I end up saving my clients far more money than what my legal fees cost. Typically, an unrepresented person will be offered a settlement of 80% of the amount sued for in the Complaint if they contact the plaintiff’s attorney themselves. Rarely will the lawyers offer anything less than this, as they handle these cases every day and are confident they will “bulldoze” any pro-se litigant in Court.

Sadly, the plaintiff’s attorneys are usually correct. Often in Court I observe pro-se litigants losing cases that could likely have been won by an experienced attorney. Typically the arguments are “I do not have a contract with Midland Funding” or whomever the debt buyer/plaintiff happens to be. This is not a defense. Your credit card agreement gives the original creditor the absolute right to sell/assign your debt to another company, without your consent or knowledge.

That is why an experienced NJ Debt Defense attorney is so crucial. Recently I was retained by a woman who was sued by Midland Funding LLC for almost $13,000. She had not made a payment on the account herself since 2008, which put the case beyond the applicable Statute of Limitations.

However, she had been in a Chapter 13 bankruptcy in 2012-13, which ultimately was dismissed (which is common in Chapter 13 plans, which rarely work).

Midland Funding argued that the payment by the Chapter 13 trustee revived and re-set the Statute of Limitations. I argued that it did not, as a payment by a trustee is not a “voluntary payment by the debtor.” There was caselaw on this topic from other jurisdictions supporting my position. After several weeks of litigation, Midland Funding accepted a tiny $500 settlement on the debt, saving my client $12,500 and the hassle of a day off work to go to trial.

Trying to handle a NJ Special Civil Part debt lawsuit on your own is the definition of “penny wise and pound foolish.” Remember, the debt collection attorneys handle thousands of these cases every year, whereas your own case is probably your first experience in court. Call me at 908-782-5313 for a free consultation before you attempt to handle a debt case yourself.

Myth #3- The judge will feel sorry for me since “I was very ill / I have 5 children/I am dead broke/I lost my job/My mother died of cancer last month”, etc.

Reality: The NJ Special Civil Part is the busiest court division in New Jersey. They handle thousands of cases a year, and in populous north NJ counties like Bergen & Essex well over 10,000 cases a year. And in addition to debt/credit card lawsuits, the Special Civil Part also handles the landlord-tenant eviction calendar! Plus there continues to be a serious shortage of judges in NJ which only seems to be getting worse.

The NJ Special Civil Part judges are thus extremely busy and have heard every “sob story” thousands of times. Much as they might sympathize with your story, they will rule on facts and law, not emotion. The judge has to hold you to the same rules of evidence and Court rules as a licensed attorney. This often presents problems, as evidence or defenses that you believe are crucial to your case may be ruled inadmissible if certain procedural rules are not strictly complied with.  Call me at 908-782-5313 for a free consultation before you attempt to handle a debt case yourself.

Myth #4- “Any lawyer can handle these cases, so I’ll call my brother in law Saul who is a patent attorney for Merck Pharmaceutical and get his advice on my debt lawsuit.”

Reality: It is true that any licensed NJ attorney can represent anyone in any type of legal matter before any court in NJ. There is no requirement by the NJ Bar that an attorney have any special designation or training to handle a debt case. However, hiring an attorney with ample debt defense experience is wise, as the attorney’s experience with these cases can often work in your favor.

For example, there are some “obscure” exceptions to certain aspects of the Statute of Limitations, and my knowledge of these exceptions have resulted in many cases being dismissed altogether for being filed untimely. See my previous post on the Dell computer cases to read more about this issue.

As we can see, there are often complex issues in these cases related to various aspects of the facts and law which are very familiar to attorney like myself who specialize in this type of work.  I also routinely deal with the attorneys at the larger collections firms in NJ, and have a good rapport with most of my adversaries. You can check out my profile on avvo.com to read the many excellent 5-star reviews my former clients have written about me and how I’ve won their cases.

Give me a call today at 908-782-5313 to discuss your debt lawsuit. The initial consultation is free of charge. 

No Comments Yet.

Leave a comment