His pro bono client’s life had been seized up in such fear that she pawned her wedding ring to feed the maw of a default judgment against her in Los Angeles County Superior Court, obtained by one of the nation’s biggest debt buyers.It was too late to undo the judgment, but Benshoof sued the debt buyer, alleging that its repeated phone calls to the woman were harassing and illegal. The company turned over phone recordings in discovery that showed the calls weren’t as heated as the woman thought.“I still think they crossed a line,” says Benshoof, a partner and big-firm commercial litigator in the Los Angeles office of Alston & Bird.The debt buyer settled, discharging the debt of $5,000, which included interest on the original $3,500 loan, and gave back $2,600 the woman had managed to pay on the judgment.But Benshoof remained curious. His client still insisted she’d never taken out a loan, though she once might have co-signed one. The bank that … [Read more...] about Debt-buying industry and lax court review are burying defendants in defaults
Buying bad debt portfolios
Adam Krohn sues debt collectors for unfair practices, but he found himself in a role reversal last year when calling a fellow California lawyer who owed him money on a judgment.“He told me, ‘Come get it. I want you to know what it’s like to try to collect a debt,’ ” recalls Krohn. So he had a writ of execution served on Scott Carruthers, who Krohn says picked up another $90 in costs for the pleasure of teasing his adversary before paying up on a consumer’s Fair Debt Collection Practices Act claim.Carruthers did not respond to interview requests.Their tangle, ongoing with new cases in which Krohn says Carruthers is avoiding service altogether, offers a humorous glimpse into a decidedly unfunny area of the law: debt collection.With the nation so awash in debt—the Federal Reserve pegs “consumer credit outstanding” at more than $2.4 trillion—getting payment from those who owe money has become a huge business. And a big mess, with … [Read more...] about Payback: Lawyers on Both Sides of Collection are Feeling Debt’s Sting
Consumer attorney Jerry Jarzombek calls them “testaliars.”He’s talking about agents and attorneys representing creditors he says frequently falsify affidavits of service or present erroneous legal documents to his clients and to the court. The paperwork involves unpaid debts from credit cards, payday loans, medical bills and the like.“They are scavengers, buzzards picking at the decaying carcass of a debt,” he says. He recalls one client in recent years whose checking account records proved she was away from home purchasing supplies for her family farm the same day a debt process server swore she was personally served notice of a lawsuit. Another received two separate judgments for the same debt. A third was sued with documentation for a debt originating from a bank other than the one that issued her credit card.Jarzombek, whose Fort Worth, Texas, practice represents a wide range of consumer borrowers, says these are typical of cases he confronts in the … [Read more...] about Attorneys push for change in debt collection
Bad news for investors in two struggling Bear Stearns Cos. hedge funds is good news for a number of securities lawyers.Their phones are ringing with calls from potential plaintiffs seeking to recover losses, following news that the funds, whose debt portfolios focus on subprime mortgages, have been hit hard by recent troubles in the subprime lending industry, according to Reuters. Because hedge funds are a relatively new arena for institutional investors, legal standards are still being established. However, these are sophisticated investors, so it may be difficult for them to win unless they were misled about the nature of the hedge funds.“If the disclosures were adequate, then it is a situation where the buyer has to beware,” says Scott Tross, a litigator at Herrick Feinstein. “It was all a question of how these funds were advertised to the people buying them.”Ross Intelisano says his firm has been contacted by two potential plaintiffs against Bear Stearns, … [Read more...] about Hedge Fund Investors to Sue Bear Stearns?
Times are tough. It’s enough to make a lawyer think about changing career directions.Common belief has it that the legal field has so many practice areas, some practices are up even when others are down. Yeah, but other than bankruptcy, exactly which practice areas are thriving these days?That’s where you came in. On ABAJournal.com, readers were asked to name some of the lesser-mentioned practices where an attorney might find refuge from this recessionary storm. Here are some of your suggestions.ALTERNATIVE DISPUTE RESOLUTIONCash-strapped corporations of all sizes, private individuals and others are seeking to avoid litigation costs and procure the services of neutral parties to resolve business-to-business, consumer and family conflicts. That’s been a boon to third-party negotiators in the areas of arbitration, mediation, negotiation, collaborative law and other practices that fall under the broad umbrella of alternative dispute … [Read more...] about Where the Work Is