Los Angeles Debt Collection

West Virginia Attorney General has announced that they will sue Captial One and a debt collection agency for “unconscionable conduct in connection with their credit card lending and collection practices”.

What did Capital One do? Capital One tricked consumers into payment plans by sending them solicitations disguised as offers of new credit. The arrangement allowed Cap One to re-age the debt so that it did not fall under the statute of limitations.

Basically what the debtors did was reaffirmed their debt with Capital One by requesting for what they did thought was new credit and this allow the statute of limitation to get extended, giving Capital One the ability to go after these debtors, after the statute had run out.

A creditor can only garnish up to 25% of a debtor’s earned wages. However, the debtor may be eligible to claim that all or part of the 25 percent is exempt as necessary for the support of the debtor and their family.

The wage exemptions may be not be available unless the judgment debtor is an employee as defined by CCP Section 706.011(c). What this means is that if the earnings are of a self employed person or a sole proprietor then you might be able to garnish up to 100 percent of their wages.

Also a person can only be the subject of one wage garnishment at a time. If a prior garnishment is in effect then the second is ineffective.

The State of New Jersey has become the capital for collection agency. More collection agency are currently working out of New Jersey then any other state in the United States. This is a by product of the state giving incentive to small business to come to state and starting new business.

This may be a great story but at the same time, many of these collection agency are being run by ex felons who are fighting the law with their collection efforts. It was recently reported that one of the biggest collection agency in New Jersey was able to generate huge revenue because they were pretending to be attorneys and threatening to take bogus legal action against debtors for their money.

The State attorney general has been reviewing the matter and investigating many agency.

So be careful if you start to see new files referred from New Jersey.

A successful party in an action on a book account may recover attorney fees limited to the lesser of $800 for book accounts maintained for consumer purposes, $1000 for commercial book accounts, or 25% of the principal obligations. In any event the fees awared must be the lesser of the amounts allowed under Section 1717.5(b), the amount of any default attorney fee schedule dopted by the court, or an amount otherwise provided by the court.

The amount collected for attorneys fee also cannot be split with the client. So it should not be considered as part of their recovery.