In tough economic times, debt and bankruptcy are facts of life. But like everywhere else, computers have transformed debt collection, and created headaches for the courts. In New York state, a law firm of 14 attorneys filed 80,000 debt collection lawsuits last year.
That’s 5700 per lawyer. How did they do it? It’s all in the software.
Given the realities of recession, many people are over their heads in debt.
And there’s a legal trend that bothers some attorneys. The software for debt collection is now so sophisticated the lawyer may not even see the suit.
“The problem with it is,” says local Bankruptcy attorney Bill Lively, “you have a data entry clerk who may not rise to the level of a paralegal, taking the information off of a bill, creating a petition and having someone sued. And if the lawyer doesn’t even look at it, that’s a major problem.”
The computer will generate the so-called robo-calls to the debtor, until such time as the next step is called for…taking them to court.
Then the software will prepare and generate a full blown lawsuit the attorney can simply sign.
Another Tyler bankruptcy lawyer Howard Tagg says that’s just too many cases for any firm to handle well.
“When you have a firm that filing 80,000 of these a year, and there’s only 15 attorney’s in the firm, you have to wonder how much review of the files has actually gone on.”
Too often though, according to the federal trade commission, that step is taken too soon, and in some areas courts are clogged.
“They are now a law firm that does nothing but buy bad debt,” Lively says. “They own it; and they’re suing on all of them. And the reality is that if they collect on 3 out of 10 things they do, they’re making a profit.”
And according to critics, the information may be flawed or simply wrong
“Often times, when put to the test, they don’t have the necessary documentation to get a judgement,” Tagg said.
And there are possible ethical issues.
“And if in fact an attorney has never even examined these files,” worries Tagg, “If they’re filing these lawsuits with no input from an attorney, then in fact this is an illegal or improper practice of law.”
Most debtors simply don’t show up for their suits, and there will be a default judgement. The FTC wants to see more detail about the debt included, so the debtor has more information to defend himself.
If you receive something like this "Challenge them" Get a reputable lawer to look everything.
Keep a log of the calls received from the collectors #of calls, time of day calls were received, if possible let them know that they are being recorded (Do not record them without telling them that you are) Note if they are harassing,or threatening you. If you tell them that you have an attorney representing you, they are supposed to refer all attempts to the attorney.