Consumer

COLLECTIONS

Equity= value of home less any liens, like a mortgage

Advised about post-judgment installment payment and garnishment orders, seizure of personal property and about liens against real property Advised that, according to the information provided, CL may not have income subject to garnishment and no significant assets that invite attachment. Thus, while a judgment creditor could obtain an order for seizure of personal property, the cost of doing so might well outweigh the return.

Advised CL regarding judgements only being good for 10 years unless an extension is filed, which makes it good for another 10 years

Advised CL generally about secured and unsecured debt, repossession of personal property (a remedy allowed by contract on certain secured property), and fair debt collection practices.

Advised about civil lawsuits (complaint, service, answer/default, trial/judgment).

Advised CL re defenses- do not see that CL has any; not having money is not defense

Advised CL re likely money judgment will be entered against CL- must then think about what OP can get to cover judgment

Advised CL judgments good for 10 years and can be renewed- current analysis could change if income/assets change

Advised CL re debtor’s exam and bench warrant if fail to attend.

Advised CL cannot go to jail for owing a debt but can for bench warrant/failing to attend

GARNISHMENT:

Advised re garnishment- it is a court process where a debtor's money is taken to pay a creditor

Advised re difference between wage and non-wage garnishments

Advised re how garnishment occurred after the creditor (LL) went to court and obtained a money judgment

Advised re process of garnishment- serving the writ on the garnishee and debtor

Advised CL that CL has 14 days to file objections to the garnishment with the court

Advised CL as to what the objections were and which one CL could use

Advised that motion for installment payment order stops wage garnishment only

Advised client that installment payment orders generally do not protect against non-wage garnishments, and that property such as bank accounts and tax refunds can still be attached. Advised CL about installment payment petitions and orders. Advised that this would allow CL to show

the court how much CL can really afford and to ask the court to enter an order for only that amount Advised that the court is not required to grant installment payment requests, but that it often does if the documentation is complete and the request reasonable.

Advised that, in a judgment-based garnishment case, the creditor serves the writ for garnishment on the garnishee and the garnishee within 7 days sends a copy of the writ to the debtor. Advised that the debtor then has 14 days to file objections with the court. Advised that a possible objection to garnishment is having an installment payment order in place.

Advised CL he was given notice of a garnishment disclosure and that any objections CL has must be filed with the court within 14 days of the date of service of the writ on the CL or the CL risks losing the funds.

Advised CL that objections may only be based on defects in or the invalidity of the garnishment proceeding itself. An objection may not be used to challenge the validity of the judgment previously entered.

Advised timeline with installment petition- CL will be given a court date and will appear in front of a judge or referee who will grant the payment plan if at all reasonable. Advised that the form asks for the client’s income and expenses and client’s proposed payment. Advised CL that it was important he was reasonable in his amount he can pay. Advised CL that it would not be a good idea to put down an amount higher than he can truly pay because if the plan is approved, the CL’s wages cannot be garnished as long as the CL pays the promised amount in a timely fashion.

Advised further that if CL fails to make a payment, however, the client may not get approval for another order, and the plaintiff can again commence garnishing. Advised CL that his social security disability income was exempt from garnishment

Advised CL that property not in his name was exempt from garnishment (CL was a little concerned that mom's house could get seized or have a lien placed on it)

BANKRUPTCY

Advised client generally about bankruptcy, dischargeable and non-dischargeable debt, federal vs. state exemptions, and discharge.

SMALL CLAIMS

Advised CL re small claims- suing for damages if there is a substantial amount of personal property that has been lost or destroyed Advised CL re $5,500 limit in small claims Advised re how to begin a small claims case, sending notice of the claim to the defendant, getting the affidavit and claim to the defendant, preparing and attending the trial Advised re process of small claims (informal, no attorneys, parties may represent themselves, speak directly to judge) Advised that after hearing from both sides of the dispute, the judge will decide whether money is owed to any party, and if so, how much. The Court does not collect the money awarded in a

judgment, however the judgment shall include a warning that the defendant’s failure to pay may result in execution against the defendant’s property and that the defendant may be compelled to appear for an examination of the defendant’s assets.

ADVISED CL re pro per divorce - seems like divorce will be pretty uncontested- if OP disputes custody or it becomes hostile, advised CL to call back and we would reconsider seeing about local office help

ADVISED that small claims cases are appealable (w/in 7 days) only if heard by magistrate; otherwise small claims judgments are final and binding.

ADVISED CL that if money judgment for OP and CL does not have the money, the judge can set up a payment schedule ADVISED that if payment schedule set up and CL still does not pay, OP can collect the money through proceedings to seize property or to garnish income

ADVISED CL re seizure of property- court procedure allows court officer to seize property belong to CL that can be sold to pay the money owed

CLAIM AND DELIVERY

Advised CL re claim and delivery action.

Advised CL- After you file a claim and delivery complaint, you may file a verified motion requesting possession of the goods pending final judgment.

A claim and delivery complaint must:

(1) specifically describe the property claimed;

(2) state the value of the property claimed (which will be used only to set the amount of bond and not as an admission of value);

(3) state if the property claimed is an independent piece of property or a portion of divisible property of uniform kind, quality, and value; and

(4) specifically describe the nature of the claim and the basis for the judgment requested.

Advised CL re file in Livingston county since that is where property is.

Advised CL re needs to come back for court date

Advised CL since value of property over $25,000, CL has to file in circuit court in Livingston

Advised CL could potentially ask for supplemental money judgment for the property that OP has sold, destroyed etc. Would need to try and estimate value of that property

Advised CL- need to make list of all property still at OP's. Value it

Advised CL- file complaint, OP must be served with complaint. Send certified mail etc

Advised CL- can find form online or get from court

Advised CL re filing fee will vary, fee waiver form

Advised CL re A successful plaintiff may apply to the court for a Request and Order to Seize Property to retrieve from the defendant the property which was the subject of the Claim and Delivery.

MISC. COLLECTIONS:

THE LACK OF AN ATTACHED K IS ONLY A DEFENSE IF THE OP IS SUING UNDER A BREACH OF CONTRACT THEORY. IF THE OP IS ONLY SUING UNDER AN ACCTS STATED THEORY, THEN A CONTRACT DOES NOT HAVE TO BE ATTACHED.

WHILE IT IS CERTAINLY UP TO CL WHETHER CL WANTS TO FILE AN ANSWER OR NOT, CL IS NOT COLLECTIBLE. THE MORE WORK OPA IS DOING THE MORE FEES ARE BEING TACKED ON.

AFTER LOOKING AT THE BANKRUTPCY APP DETERMINED THAT CL IS NOT REALLY UNCOLLECTIBLE AS CL OWNS REAL PROPERTY THAT IS UNDER WATER AND AN OLD VEHICLE.

SINCE IT HAS BEEN SEIZED CL WOULD HAVE TO PAY THE SHERIFF OR BAILIFF TO GET THE VEHICLE BACK.

I ALSO DON'T THINK THERE IS ANY NEED TO CL TO ENTER A PAYMENT PLAN...CL IS NOT COLLECTIBLE, AND UNLESS AN IPP WAS FOR A SUBSTANTIAL AMT, CL IS ONLY PAYING ON INTEREST ANYWAY...

CL IS NOT REALLY COLLECTIBLE, ALTHOUGH TAX RETURNS COULD BE AT RISK POST JUDGMENT. CL'S CAR SHOULD BE SAFE PER 'TOOLS OF THE TRADE' BUT IF SEIZED ANYWAY AND VALUE IS UNDER $1K WE WOULD PROBABLY OPEN A BK AND REFER.

I RECALL RESEARCHING THIS BEFORE (WHETHER AMERICORPS WAGES ARE SUBJECT TO GARNISHMENT): LOOKING...CAN'T LOCATE IT. MY RECOLLECTION WAS THAT I NEVER FOUND A DEFINITIVE ANSWER, BUT I THINK I WAS LEANING THE WAY CLIENT SAYS (NOT GARNISHABLE.)

REVIEWED. NOT OVERLY COLLECTIBLE (LOW VALUE CAR, VERY LOW WAGES WHICH MAY NOT BE GARNISHABLE/AMERICORPS.)

CL WAS ADVISED SHE COULD SEEK A "PAYMENT PLAN" IF A DEFAULT JUDGMENT ENTERED. IF CL WAS ADVISED ON IPP ORDERS, THOSE ONLY PROTECT FROM WAGE GARNISHMENT. IF CL WAS ADVISED ON SEEKING SOME TYPE OF INFORMAL "SETTLEMENT AGREEMENT" POST JUDGMENT, THERE IS NO INCENTIVE FOR OP TO DO THIS.

POSSIBLE TECHNICAL DEFENSE AVAILABLE BC OP DID NOT ATTACH THE CONTRACT.

THE JUDGMENT AMT IS LIKELY HIGHER DUE TO COURT COSTS AND INTEREST.

Objection to garnishment: EVEN IF CL IS OUTSIDE OF THE 14 DAYS, CL CAN STILL OBJECT.

THIS IS A TECHNICAL DEFENSE: -the affidavit is dated 11 days before the case was filed IT SHOULD NOT BE DATED MORE THAN 10 DAYS PRIOR TO THE FILING OF THE S&C. REALISTICALLY, I DO NOT SEE A JUDGE GETTING WORKED UP ABOUT THIS. INTEREST WOULD HAVE BEEN ACCRUING EVEN WHEN CL WAS MAKING PAYMENTS SO I AM THINKING IT IS INFLATED DUE TO INTEREST, LATE FEES, OVER THE LIMIT FEES, ETC. I AM NOT INCLINED TO REFER.

CL WAS SUED FOR MEDICAL DEBT, MOST OF WHICH SHOULD HAVE BEEN PAID BY MEDICAID. UNFORTUNATELY, ANY DEFENSES THAT CL MIGHT HAVE HAD TO THE PROVIDER SUING FOR MEDICAID COVERED SERVICES AND FAILING TO BILL ARE GONE AS THE CL WAS DEFAULTED.

IS THERE AN AFFIDAVIT ATTACHED TO THE COMPLAINT? IF SO CL NEEDS TO BE ADV TO FILE A COUNTER AFFIDAVIT.

THE RESPONSE MOTION HAS TO BE FILED AT LEAST 5 DAYS BEFORE THE HEARING IF CL IS SERVING THE OPA BY MAIL AND 3 DAYS IF SERVING PERSONALLY.

IN ORDER TO STOP THE WAGE GARNISHMENT, CL NEEDS TO FILE FOR IPP BUT IPP WILL NOT STOP THE TAX GARNISHMENTS.

IF CL ALREADY SIGNED A CONSENT JUDGMENT, THEN CL COULD ALSO GO TO THE PRETRIAL IF IS NOT CANCELED BY THEN AND TELL THE COURT THAT THE PARTIES HAVE ALREADY SIGNED A CONSENT JUDGMENT. I AGREE THAT CL COULD ALSO TRY TO GET THE CONDITIONAL DISMISSAL.

CREDITORS EXAM:

THIS IS A CREDITORS EXAM. CL NEEDS TO TAKE IN PROOF OF CL'S INCOME, DOCUMENTATION REGARDING ANY ASSETS CL HAS INCLUDING BUT NOT LIMITED TO BANK STMTS, TITLES TO ANY VEHICLE, DEEDS TO ANY PROPERTY. CL SHOULD LOOK THROUGH HER DOCS TO DETERMINE IF OPA HAS REQUESTED THAT CL BRING ANY OTHER DOCUMENTS WITH CL TO THE CREDITORS EXAM.

ANSWER/COUNTER COMPLAINT:

IF CL DID NOT FILE AN ANSWER TO OP'S COUNTERCOMPLAINT THEN CL NEEDS TO DO SO.

DEFAULT JUDGMENT:

TO SET ASIDE A DEFAULT JUDGMENT, CL WOULD HAVE TO ALLEGE GOOD CAUSE AND MERITORIOUS DEFENSE. I THINK CL MAY HAVE GOOD CAUSE BUT I AM NOT CLEAR THAT CL HAS A MERITORIOUS DEFENSE.

REHEARING OR RECONSIDERATION: I AM NOT CLEAR WHAT CL'S BASIS FOR A REHEARING OR RECONSIDERATION WOULD BE UNDER 2.119(E).

WHAT IS CL'S GROUNDS FOR REQUESTING A REHEARING OR RECONSIDERATION PURSUANT TO MCR 2.119 (F)(3)?

SS BENEFITS/GARNISHMENT

IT MAKES SENSE TO ME THAT CL IS NOW RECEIVING A FORM OF SOCIAL SECURITY BENEFITS THAT CAN AT SOME POINT BE GARNISHED.

CL HAD MORE THAN 2X HER SSD BENEFITS IN THE ACCOUNT, SO THE BANK SHOULD HAVE HELD THE AMT OVER 2X HER BENEFITS.

CL ADMITS SHE COMMINGLED FUNDS WITHIN HER CU ACCOUNT BUT IT IS NOT CLEAR THAT IT WAS COMMINGLED RECENTLY WHEN THE ACCOUNT WAS GARNISHED. THE OBJECTION WAS DENIED BY THE MAGISTRATE. CHECKED THE MCR 4.401 STATES THAT DECISIONS BY THE MAGISTRATE CAN BE APPEALED TO THE DISTRICT COURT BY FILING A WRITTEN CLAIM OF APPEAL IN SUBSTANTIALLY THE FORM PROVIDED BY mcr 7.104 WITHIN 7 DAYS OF THE ENTRY OF THE DECISION OF THE MAGISTRATE. NO FEE IS REQUIRED. THE ACTION IS HEARD DE NOVO BY THE DISTRICT COURT.

CHILD SUPPORT- LIEN IT IS NOT CLEAR TO ME THAT CL HAS GROUNDS TO OBJECT TO THE LIEN ON THE BANK ACCT OR HOW LONG A LIEN REMAINS ON A BANK ACCT FOR CHILD SUPPORT PURPOSES.

UNINSURED:

TO CLARIFY, IF THERE IS A JUDGMENT ENTERED AGAINST SOMEONE FOR DAMAGES AS A RESULT OF DRIVING UNINSURED, THE PERSON'S DRIVERS LICENSE CAN BE REVOKED IF THE JUDGMENT IS NOT BEING PAID ON. IT HAS NOTHING TO DO WITH WHETHER OR NOT THERE IS A GARNISHMENT IN PLACE.

IF I AM UNDERSTANDING CORRECTLY CL WAS SUED BECAUSE CL DID NOT HAVE INSURANCE AT THE TIME OF THE ACCIDENT. CL IS LIABLE FOR DAMAGES TO THE OTHER DRIVER'S VEHICLE EVEN IF THE OTHER DRIVER WAS AT FAULT [ASSUMING THAT OTHER DRIVER HAD INSURANCE]. A JUDGMENT WAS ENTERED AGAINST CL. IT IS TOO LATE FOR CL TO CHALLENGE THE JUDGMENT.

COLLECTIONS- SEZIURE/JUDGMENT LIENS:

ALSO, AN INSTALLMENT PAYMENT ORDER WILL NOT STOP THE OP FROM SEIZING HER VEHICLE, UNLESS THEY ENTER INTO AN AGREEMENT THAT IF SHE PAYS, THEY WILL NOT TAKE ANY FURTHER STEPS TO COLLECT.

IN ORDER TO SEE IF THE CREDITOR MIGHT SEIZE CL'S HOME YOU NEED TO CONSIDER, CL'S EQUITY IN THE HOME AND HOW MUCH THE DEBT IS. ALSO MANY CREDITORS WILL NOT SEIZE HOMES AS IT IS A CUMBERSOME PROCESS. SEE: http://call.llawiki.org/index.php/Liens_%26_Executions#Real_Property_under_the_Execution_Statute ALSO THE CREDITOR COULD PLACE A JUDGMENT LIEN ON CL'S HOME. SEE: http://call.llawiki.org/index.php/Liens_%26_Executions#Judgment_Lien_.28Against_Real_Property.29_Statute

CL IS NOT OVERLY COLLECTIBLE (SSI/D INCOME.) DOES OWN A HOUSE. IT SOUNDS LIKE CL MAY NOT HAVE ASSERTED ANY DEFENSES IN HER ANSWER (WHICH COULD MEAN OP WILL FILE A MOTION FOR SUMMARY DISPOSITION.) JUDGMENT INTEREST WILL ATTACH ONCE JUDGMENT IS ENTERED.

"SEIZURE" OF HER CURRENT VEHICLE BY A POST-JUDGMENT CREDITOR WHICH IS ADDRESSED UNDER DIFFERENT LAWS FROM THAT WHICH GOVERNS REPO OF A VEHICLE WHEN SOMEONE DEFAULTS ON A SECURED VEHICLE LOAN.

SUMMARY DISPOSITION:

USUALLY WHEN YOU SEE A MOTION FOR SD, THE OP IS ALLEGING THAT THERE ARE NO FACTS IN DISPUTE/NO DEFENSE ASSERTED AND THEY ARE REQUESTING A JUDGMENT

COLLECTION:DEBT AVOIDANCE:

CL SHOULD BE ADVISED THAT TRANSFER OF AN ASSET IN AVOIDANCE OF A DEBT MAY BE CONSIDERED FRAUDULENT. HOWEVER, CL COULD SELL HER CAR TO HER SON FOR FMV AND THAT WOULD BE OK, BUT SHE WOULD WANT TO RETAIN GOOD RECORDS OF TRANSACTION AND PAYMENT BY CL'S SON.

I DO NOT THINK THAT THE CL SHOULD TRANSFER TITLE TO A CAR IN HIS NAME WHILE A LAWSUIT IS PENDING AGAINST HIM (UNLESS IT IS TRANSFERRED FOR FMV)- THIS COULD BE CONSIDERED A FRAUDULENT CONVEYANCE.

IS CL BEING SUED ON A CONTRACT THEORY? IF NO, THEN A CONTRACT DOES NOT HAVE TO BE ATTACHED TO THE COMPLAINT. INABILITY TO PAY AND DISABILITY ARE NOT A DEFENSE. CL'S ANSWER NEEDS TO RESPOND TO THE ALLEGATIONS IN THE COMPLAINT. CL SHOULD

RESPOND TO EACH ALLEGATION AS WITH THE RESPONSE OF EITHER ADMIT, DENY OR LACK KNOWLEDGE OF THE TRUTH OF THE ALLEGATION.

CL ARGUES THAT ONLY HIS STUDENT LOAN PROCEEDS WERE GARNISHED IN HIS BANK ACCOUNT. SUCH GARNISHMENT IS PROHIBITED BY FEDERAL LAW. THIS IS A BASIS FOR OBJECTION TO GARNISHMENT.

CL IS COLLECTIBLE AS CL HAS A VEHICLE THAT IS PAID OFF (SO SUBJECT TO SEIZURE) AND A HOUSE (WHICH IS SUBJECT TO A LIEN) IF CL CANNOT AFFORD TO MAKE A PYMT ARRANGEMENT THAN CL SHOULD NOT OFFER TO DO SO. MAKING A PAYMENT ARRANGEMENT ONLY STOPS A WAGE GARNISHMENT. IF DOES NOT STOP THE CREDITOR FROM PURSUING OTHER COLLECTION MEASURES.

HIS VETERANS BENEFITS MAY NOT BE EXEMPT. ONLY VA DISABILITY BENEFITS ARE EXEMPT NOT VA RETIREMENT BENEFITS.

THE VA BENEFITS IF RETIREMENT, CAN BE GARNISHED IN A BANK ACCOUNT. B/C THE SS BENEFITS ARE NOT GREATER THAN THE VA BENEFITS, THE VA BENEFITS WOULD NOT BE PROTECTED IN THE BANK ACCT VIA THE SSA BENEFITS.