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How does someone to avoid default judgements?


impennypincher
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How does one avoid default judgements, especially in Small Claims courts? Through an unfortunate personal experience, I have found what could be greatest threat to credit consumers which has come down the pike to since Debtor's Prison.

A least one debt buyer/CA has found what seems to be a fool-proof way of turning junk debt (beyond SOL and age barred from CR reporting) into pure gold. They survey very old debts pulling current reports to find someone who is doing well, ie, clean credit report, high limit CCs with little or no balance, mature mortgage, etc. and good verifiable current address and employer. Then they "sell" the debt to a straw party who takes it to a Small Claims court with a $5000 jurisdictional limit and is known to overlook things like SOL, venue, service, proof of debt, etc.. The straw party uses the debtor's original address from the old debt which the debt buyer knows to be long obsolete but does not pass along to the filing straw pary to avoid fraud. The straw party gets a default judgement, $5,000 at !0% interest, which he "sells" back the debt buyer who has all the good current information to go after the debtor. Of course, the debt buyer doesn't notify the debtor of the judgement until after the appeal time has passed. The straw party, who has used mail drop and prepaid cell phone to file the suit, disappears into oblivion, leaving a credit buyer/CA with a valid judgement who is not responsible for any deficiencies in the straw party's suit or "judicial error" which may have occurred to obtain it.

How does one assure they will not fall victim to this same scheme? Even if one diligently notifies the OC of their address changes, there is no way of knowing, or more importantly, proving they pass the information along to assignees. There is no mechanism to inform the debtor who has acquired his debt or to notify of a change of address. So there is no way of knowing when an action has been filed and the assignee can be assured of a default judgement.

A judgement by a Small Claims Court is just as enforeable as any other court and to my understanding is not challengable after the appeal date even if there has been judicial error except if it can be proven that fraud was involved. To prove fraud would require discovery which doesn't seem possible in my case because the straw party who filed the suit dissappeared and, most ironically, cannot be served.

Something needs to be done about this.

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Wow.. that's scarey !!!

Question - is the 'debt' they fraudulently sue for an actual debt for that person ?? Or do they just pick someone and fake it ??

One way to deter this.. OPT OUT with all 3 credit burueas. It stops the CRA's from selling your info to anyone - including purchasers of the 'skip locator' services the CRAs sell !! It also stops ALL (or should) of the promotional inquiries and those damned 'pre approved ' credit cards.

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If the old debt you are referring to was legally past the SOL when a judgment was awarded by any court, you should motion the court to vacate the judgment. It is conceivable the SOL was extended given your disappearance, however if it was time-barred, the judgment can not be valid. Debt buyers can be a sleazy bunch, but personally I would prefer that bad debt be acquired by debt buyers rather then held onto by the OC. Debt buyers rarely can produce a representative of the OC to validate the debt in court and usually come equipped with nothing more than your SSI and a printout of what you supposedly charged. It doesn't pass muster, and folks if you're in a similar situation, send a validation letter asserting ID theft or a C&D letter to end the phone calls. Most debt buyers count on people being ignorant and not challenging them in court. State laws do vary on small claims and court procedures, however if a debt is legally time-barred it cannot be collected unless it's been ratified in some way.

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The debt was from a student CC I once had. These were very popular about 10 or 15 years ago. It is valid in the since that is was mine. There were almost 50 indentical small claims brought on the same day and with the same result. A magistrate judge in a sleepy little college town issued nearly $250K in default judgements on time barred debts against former students with obviously out of date addresses.

Right now, my legal efforts are to block any enforcement order in my home state. I have an attorney in my home helping in this regard. He originally thought it would be easy to deal with simply vacating the original judgement. However, in talking with the CA as well as an attorney in the state where these small claims action were file it does ot appear to be that easy.

I was told that since the appeal as passed, it takes more than showing that that I would have prevailed had been present or the judge erred in allowing a time barred debt. It requires showing there was fraud upon the court on the part of the plaintiff to obtain the judgement. That's were it gets sticky.

The CA claims it resold the debt it had acquired from the OC to the individual who filed suit. The CA *suggests* the individual may not have purchased their "research" which would have included current address, etc., but only the debt itself. In his filing, the individual only included a printout of balances and payments leading to a charge-off in Jan of 1994. The address on the printout was my billing address at the time which was a student post office box. The CC agreement with my permanent address, signature, etc. was not included in the filing papers. The only documentation he filed was a standard court form saying I owed him money referring to a "see attached". There was returned demand letter, the printout I mentioned, an assignment of the debt to the CA (not him), a certified mail receipt (as undeliverable), and a copy of the certified check he paid the filing fee with. Aside from his own statement, which was part of the standard court papers, there was no documentation to prove the debt was even his.

Once the judgement was obtained, according the CA, the individual sold the judgement back to them. This is what the CA says. There is no documentation anywhere to show the debt was ever assigned to this indivdual nor reassigned back to them. This is just their claim. There may or may not be such paperwork. The CA is refusing to provide it and claim they are not required to do so now that a judgement has been obtained. They need only provide me with a copy of the judgement which they have done.

In order to show fraud, I need at least prima facia evidence of such to file a motion to bring the plaintiff, the individual who brought suit, back into court. Without some paperwork showing he, not the CA, knew of another address or the debt had not been assigned to him, there isn't much that can be done. He's disappeared, so there is no way to get discovery on him or CA. The CA claims they just sold and repurchased the debt and were never a party to the suit he brought. Without showing of fraud, then it becomes a matter of judicial error in allowing a time-barred debt which is not generally sufficient to vacate after the the appeal process deadline has passed.

This is one slick scheme which I am certain will be tried again. Beware!!!

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This is quite frightening. I do have some input. Why don't you submit this to Edcombs.com. Include all info you have. Josh Arnold is usually the one who responds. You might get the answers you need to fight this. I would also contact your State's Attorney General and the FTC. You would be helping more people than you could imagine if you take this ball and run with it all the way home. Stay on top and keep us informed.

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HELLO GUYS!!!!!! <<Waves her hand in the air>>

There is this NICE little thing in the FDCPA that says you can only sue in the county where you LIVE WHEN THE ACTION IS FILED OR the county where you signed the contract.

Now NINE times out of ten the county the CC's use is in thier state or where you lived when you signed the contract. So if they dont use those counties jurisdiction then you simply have it vacated and then you sue the pants off em.

So in essence you have them on a violation and damages for the judgement.

Always think OFFENSE when you see stuff like this. You may even have the judge on things too... think about it

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  • 2 years later...

So they give an old address... that means nothing.

How can they obtain a judgment without serving summons?

It's call improper service, and under this circumstance is illegal.

This is no different than the attorneys who obtained judgments on people who were never served, then forged documents to make it appear they were.

What you do is notify your State Attorney General and the U.S. Department of Justice.

Then you carbon copy the whole thing to the FTC (who stated they aren't receiving enough complaints from consumers) and your elected officials.

Until we as consumers are willing to lobby just as hard as the ACA, we'll always be consumer scum, and will be taken advantage of daily.

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In a situation as outlined in the first post, all I can say is WOW.

I have heard of people doing this against other people, and putting liens against their property, but never a collection company.

I would say that if you can prove that the judgement was obtained through narfarious and dubious methods, then the court might be enclined to "vacate" the judgment. If not, I would play their game back on them and sue them.

I think most courts are wise to this kind of fraud and if one can prove that they are the victim of just fraud, I would hope the court would do the right thing.

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I would hope the court would do the right thing.

Don't count on it.

http://debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=33370

136 counts of criminal contempt of court

-give up his law practice for two years

-serve six months house arrest

-pay $143,000 in fines

You'd think the Attorney Discipline Board would have noted something....

Not a peep.

Anyone who didn't read the article would ever know what he did.

136 count of CRIMINAL contempt of court.

THIS is the best judicial system in the world. Kiss it.

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