A large prepaid legal service provider, Prepaid Legal Services, Inc., published its list of the top 5 categories of requests for its services last year. They are:

Real Estate, Landlord/Tenant Issues and Foreclosure – Approximately 358,000 requests for legal services that include residential and commercial real estate transactions, landlord and tenant issues and legal counsel related to foreclosure and short sales

Consumer Finance – Approximately 195,000 requests for legal services related to retail transactions for warranties, guarantees and other contracts

Family Law – Approximately 193,000 requests for legal services related to divorce, child support, child custody and child visitation

Collections – Approximately 162,000 requests for legal assistance to support members against other parties and to defend members from third-party debt collectors

Estate Planning – Approximately 160,000 requests for legal services for preparation of wills and other counsel related to final estates.

All of these areas, with the exception of family law, are currently covered by Pittsburgh Legal Back Talk.

Bankruptcy and criminal law are probably 6 and 7.

It has become a common practice for credit card issuers to sell their written-off accounts in bulk at auction. However, other kinds of consumer accounts, such as automobile loans and unpaid balances on cellular telephone are also sold in this way. Long lists of delinquent accounts are assigned and frequently re-assigned. Although the gross amount of the bid for a package of written-off accounts may be millions of dollars, this typically represents pennies on the dollar. An individual account may be repackaged and sold two or three times. The buyers of these accounts, called “scavenger collectors”, know that most are uncollectable, but they expect to recover enough by vigorous collection efforts or in court to make the enterprise very profitable.

If you are contacted by someone attempting to collect such a debt, there are a few things that you, the consumer, need to know. First, the caller may not actually represent the legal owner of the claim against you. (For example, it may have already been re-sold to someone else.) Second, the claim may not be enforceable in court. Third, the caller may not know very much about the claim and may be eager for you to provide information.

Refuse to give or confirm any information to the caller. Don’t admit that you owe the debt. And by all means, don’t agree to make a “good faith payment”, even for a nominal amount. Instead, get the exact name and address of the entity making the claim.

If a scavenger collector sues you in court, call an attorney immediately. The chances are very good that the claimant cannot prove its case. They typically have only basic information concerning the debt and no supporting documents. As a practical matter, they usually can’t prove the case. They may even know that the statute of limitations (generally 4 years following the last payment in such a case) has expired. There may be other complete or partial defenses.

Bear in mind, that even if you do owe an unpaid debt, the calculation of the actual amount currently due may be incorrect. The plaintiff has the obligation to present sufficient evidence to prove that the balance is stated correctly. This is no small feat, since the balance was recalculated every month, taking into account payments and the accrual of interest, late charges and other fees. Interst rates and other fees often change from month to month. As a practical matter, if the defendant demands strict proof of the calculation of the account balance, the plaintiff must produce monthly statements of the account since the time when there was a zero balance.

CLT