Junk Debt Collectors

A couple of years ago in the midst of the “Great Recession” we started to hear complaints about “Junk Debt Collectors.” Because of the failure of financial institutions such as Countrywide and others, many past due debts, even home loans, were not the subject of collection efforts for years.

The collection value of such old debt is minimal and some has even gone past the statute of limitations, 6 years on a written account contract in Washington.

final notice for debt collection or unpaid bill

A number of things will tip you off that the contacts you are receiving are from Junk Debt Collector:

  1. The debt is more than 5 years old.
  2. The attorney is not located in Spokane, but Portland, Seattle, Denver or elsewhere.
  3. Midland Funding, Portfolio Recovery Associates and LVNV are very active junk debt collectors in this area and nationally.
  4. Early efforts are made to compromise the claim for a smaller amount.

Volume Discount Collectors

Keep in mind these are volume discount collectors. They did not pay face value for the assigned debts, bought in bulk for cents on the dollar, and any recovery is a win for them. They may not be able to prove the original debt because of lack of documentation and may be unable to collect in court because of the statute of limitations.  It is also a violation of the Fair Debt Collection Practices Act to try to collect such an unenforceable debt. Collectors risk punitive fines and attorney fee awards for such violations.

 Forcing the Cessation of Junk Debt Collection

We examine each case for these legal issues before approaching with settlement offers. We have successfully forced cessation of collection efforts in some cases, and deep discounts in others.  An attorney can evaluate your individual case efficiently if you are the target of a Junk Debt Collector and determine the best way to protect your rights and assets.

Civil Rights and Bankruptcy Laws

Bankruptcy is a Civic Right

Many people who come to me for advice on bankruptcy feel ashamed and question the morality of discharging debts.  Most people are very concerned about how they are perceived. Even in distress, disability, old age, or in situations no one could control they don’t want to be seen as someone who doesn’t pay their debts. But Bankruptcy is your right.

We the People US Constitution

What they may not know is that the United States Constitution specifically instructs Congress to make bankruptcy laws.

Section. 8.

The Congress shall have Power  . . .;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

Civic Rights Free Citizens form Oppression

This is an important civil right because the practice at the time of the American Revolution was to put honest debtors who couldn’t pay into prison, until they or their families could buy their freedom.  The United States of America was established to free its citizens of many forms of oppression, including debtors’ prisons.

Congress has established and maintained uniform bankruptcy laws, including the current Bankruptcy Code, adopted in the mid 80’s and last significantly amended in 2006.  The over-arching policy of the law is stated by Congress as giving debtors a “fresh start” and creditors an “even playing field.”

Lenders, especially credit card companies, take the certainty of bankruptcies into account in setting interest rates. Once a bankruptcy is filed, the debtor becomes a consumer again who buys goods and pays taxes and is a benefit to the economy. The bankruptcy laws therefore, promote the social goals of helping honest debtors out of poverty, preventing homelessness and creating a productive employed citizenry.

Each case of bankruptcy has its own unique considerations, but for the average citizen overwhelmed by matters out of his or her control, it is a basic civil right.  Contact a knowledgeable bankruptcy attorney to discuss your case at www.stevenschneiderlaw.com.

Landlord Tenant Disputes Can Be Mediated

Mediation of Landlord Tenant Disputes

Chapter 59.18 RCW, the Residential Landlord Tenant Act (RLTA) provides a procedure for landlord-tenant disputes to be submitted to mediation or arbitration before matters are taken to court. These options would have to be included in the written Rental Agreement to be enforced. In the most common case, that of an unlawful detainer action (eviction), the parties would then have three choices.

  1. Mediation: A neutral mediator will meet with the parties to help negotiate a voluntary agreement to resolve the dispute. The mediator does not make a decision for them. Usually, the parties do not meet directly rather, the mediator will facilitate an agreement by working with each party alone. In an eviction, a resolution may include an agreed move-out date, a compromise on past due rent and an agreed judgment to be entered if the tenant does not perform the agreement.
  2. Arbitration: In arbitration, the parties pick a neutral person to decide their dispute for them. Each party presents their case to the arbitrator and the arbitrator, like a judge, gives a decision that is binding on the parties. RCW 59.18.320 allows the parties to include an arbitration provision in the written Rental Agreement for disputes involving defects in the rental property for which the tenant may have a remedy of abatement of rent, or any other matter that can be brought before a court under the RLTA, including an unlawful detainer action.
  3. Litigation: Most commonly, litigation will start with an unlawful detainer action but may involve any other right of action contained in the RTLA. Typically, an unlawful detainer action will involve a show cause hearing and if necessary, a trial within a short period of time. If the tenant does not appear at the show cause hearing, the landlord will obtain a judgment by default and a Writ of Restitution will be issued authorizing the Sheriff to remove the tenants. Matters brought to court that deal with issues other than possession and rent will be filed as a regular civil action and take much longer to bring to trial.

Image of an eviction on the 1900s

A landlord will usually want to proceed with an unlawful detainer action and show cause hearing in order to quickly evict a tenant. An arbitration is unlikely for the same reason; because the show cause hearing procedure is quick and effective most of the time.

Hybrid Resolution

There is however, a hybrid type of resolution made possible at the show cause hearings in Spokane County by the presence of a volunteer attorney from the Northwest Justice Project. This service can be characterized as a mediation even though the volunteer attorney advocates for the tenant because it usually ends in a brokered agreement.

Both the volunteer attorney and the landlord’s attorney are aware that there is little chance of an effective defense in the typical eviction case for non-payment of rent. The volunteer attorney also will not represent the tenant at a trial. Under the circumstances, both sides should realize that the best solution may be an agreed move-out date and an orderly exit. As in a mediation, the tenant gets the chance to voice his or her concerns and complaints about the landlord to a third party. Once this is accomplished, most tenants agree on a reasonable move-out date, an agreed order or judgment is signed and the tenant vacates without incident.

By the time of the show cause hearing however, the landlord has incurred attorney fees, court costs and service fees between $700 and $1,000 as well as having waited 10 days or more for the hearing. A true third party mediation before the eviction action is filed may save the landlord money and provide the tenant with a predictable procedure to vacate the property.

Mediation

Of particular use is the first step in mediation, convening. In this step, the mediator contacts the parties to arrange for the mediation. Because the call does not come from the landlord directly, the tenant may be more receptive to the suggestion.

A clause in a Rental Agreement which provides for mediation, permitted under the RLTA, may also preserve the Landlord’s rights to proceed quickly in court if necessary:

Without waiving any rights under Chapter 59.12 and Chapter 59.18, Revised Code of Washington, Landlord and Tenant agree, pursuant to RCW 59.18.315, to submit any dispute arising under the provisions of Chapter 59.18 RCW or under the terms, conditions or performance of this rental agreement, to mediation by an independent third party. This provision does not prevent either party from serving any notice provided for under any applicable statute, nor does it prevent the Landlord from proceeding with an unlawful detainer action. Mediation convened hereunder shall be conducted pursuant to Chapter 7.07 RCW.

With this provision, once a landlord has served a Three-Day Notice to Pay Rent or Vacate, and three days have expired, the landlord will ask the mediator to contact the tenant and attempt to convene a mediation. The actual mediation can be conducted in person or by telephone. A flat mediation fee and a standardized mediated agreement can make the procedure cost effective.

The above provision will not resolve all eviction cases, but does give the landlord a creative alternative to the cost and uncertainty of litigation.

 

Steven Schneider, Attorney at Law, P.S. and Spokane Mediation

203 N. Washington St, Ste. 204, Spokane, WA 99201

509-838-4458, ss@stevenschneiderlaw.com