The first thing that you need to know is that most credit card cases in Pennsylvania are being heard in front of magistrates.  Pennsylvania magistrates  have such a wide variety of cases that they cannot possibly become experts in everything.  Because of this, even the best defense against credit card cases may not work, also, the best case against them can fail.  The magistrate judge will try his or her hardest to get these right, because no judge likes to be reversed on appeal, and for the most part, the Pennsylvania magistrates really do care about their positions and how they carry out their duties.  That being said, you may not get the correct outcome at the magistrate level, and you may be forced to appeal, which will cost you more money!

The second thing that you should know is that a credit card statement on its own is not enough to prove a debt.

The third thing you should know is that you have the right to question evidence the plaintiff puts forward to prove the debt.  The problem is that when you are defending yourself and you question the plaintiff’s evidence, the opposing side may ask the question did you make these charges, or is this your debt.  You have every right to decline after the question, but the magistrate is human and that may make you look liable further debt than you actually are.

Lets suppose for a moment that you all are representing yourself against Discover card.  Discover card has hauled you in front of your local magistrate because you owe them $5000 and haven’t made a payment in twelve months.  Now let’s just say this information is accurate, and you have actually made the charges, you owe the debt, and you just can’t pay it.  In a court you are under oath, you can’t lie and say you didn’t make the charges, so that puts you in a difficult position if you want to question Discover card’s lawyer about his evidence.

This is how it usually goes when a credit card company’s attorney present evidence in court.  The attorney is going to come up to the bench and show the court 6 to 10 months worth of statements from your credit card.  He will show where you did not make payments. They are going to point out that after a certain month the credit card company stopped charging over limit fees, or did something else to make it look like they were being altruistic and giving you a chance to catch up.  Then they’re going to pull out a credit card agreement.  It’s going to be the most recent version of a document that essentially says we (Discover Card) have all the rights and you have none.  If the attorney is good, they will have highlighted the portions most damning to your case and handed directly to the judge. Finally, some attorneys like to do a little bit of legal theater, and they will pull out a credit card slip.  The credit card slip will not be yours, it will be the attorney’s.  They will tell a hokey story about how they got pastrami on rye at the deli (that’s the story I used) and how they used their credit card.  Then they will show at the bottom how it says that the cardholder agrees to the terms and conditions of the credit card agreement and agree to repay the amount charged.  The attorney will discuss tacking with the attorney, and tacking essentially means that signing that little piece of paper means that you agree to be most recent credit card agreement.  Then if the attorney is smart, he or she will rest their case, and let the hapless defendant defend himself.

This is where it gets sticky for a person who defends himself. If you’re defending yourself, you may have every reason to attack the plaintiff’s evidence, but if you risk opening yourself up to questioning if you do.  The question is: When are you acting as lawyer and when are you acting as defendant and witness.  This is how a person who defends himself gets in trouble.  The judge or magistrate will say: “do you have any questions for opposing counsel?”  the first time you ask a question you’re cooked.  If you ask, “Do you have assigned credit card agreement from me?”, the attorney may respond no it was done electronically but you did take the card right?  You’re under oath, you can’t say no.  You might ask the other lawyer “Do you have any signed credit card slips from me?” Discover Card’s lawyer will probably say “No, but you did use the card to charge right?” Again you are not allowed to lie.

The bottom line is you’re not allowed to lie.  You can say, “I’m questioning the plaintiff’s evidence, not testifying”, but that seems evasive and even though the magistrate is required to allow you to defend yourself without testifying, the magistrate is a human being and he is likely to assume that your refusal to answer means you did charge on your credit card.  Unless you’re Frank Abigail or Will Hunting ( and remember they took Will Hunting off to jail before he was bailed out by the professor), you’re probably not be able pull this off.

A judgment from a credit card company can wind up being a lien against your home in Pennsylvania, I see it everyday, so a credit card lawsuit is not a joke.  If you don’t want to go the route of bankruptcy, you need to get a lawyer to defend you.  When I defend a client against a credit card company, I can usually pick them apart, because they come unprepared.

The credit card companies lawyer usually only shows up with a couple of statements and maybe the the credit card agreement.  The agreement is rarely signed.  I’m not give away my strategy for defending these cases on-line, that comes from years of defending this type of case, and it’s also something that fits my personality in a way that I can pull off where another attorney may not able to.  I couldn’t pull a Johnny Cochrane and put a glove on my client’s hand and “Say if it does not fit then you must acquit,” but I sure can poke holes in a credit card company’s lawyer in a way that only credit card company insider can, because that’s exactly what I was, one of the top debt collectors in the country and someone with intimate knowledge of the credit card industry.

So if you’re going to defend yourself, for the love of all that is good  get a lawyer.  Don’t defend yourself, because you will probably lose, and lose badly.  While lawyer be expensive, a lien against your house is much much more expensive.  If you find yourself being sued by a credit card company and you want someone who will go toe to toe with the credit card company’s attorney, call me at 484-661-2891, or e-mail me at jim@padebt911.com, and we give the credit card company a dose of their own medicine, together.

I’m generally not known for being able to give coping tactics on financial trauma, but there is one thing I know for certain, knowledge is power and the more you understand about your financial situation, the less uneasy you will be about it.  If after this article you still find yourself in need of some more help (there is nothing wrong with that, everyone needs to talk to someone at one point or another), check out my friend James Valeri’s web-site Jim Valeri, Counselor for more ways to cope with debt stress.

The focus of this article will be aimed towards the employed person or the person who works for themselves. My best suggestion to the person who finds himself unemployed is to treat his or her job search is a full time job. It’s cliché, but it works, and I’ve never been unemployed more than six weeks when I made looking for a job a full-time job.

For whatever reason, people find themselves under financial burden, and while a lot of the times these injuries were self-inflicted, the point here is not to assign blame, but to find simple, no-nonsense solutions to our financial problems.

Knowledge is power, so the first thing that you need to know, is exactly how much money are you bringing home from your job. Most people know that, but there are some people who get direct deposit and it’s to the point where they don’t even know what they make, that’s a bad position to be in.

Once you know how much you bring in each pay period, I want you to look at your 2008 tax return. Did you get a large tax return this year? If you did, that wasn’t the government’s benevolence, that was paying you back for overpaying your taxes during calendar year 2008. I routinely see people in my office who have $5000 – $6000 tax returns. If you’re getting a $6000 tax return, you essentially want the government $500 per month interest free for a year. That’s your money, don’t lend it to someone for free, especially an organization that spends $900 on a toilet seat.

If you’re overpaying significantly in taxes and getting a large tax refund every year, go see your HR person and have your holdings adjusted so that you’re getting more of your money each month when the government is getting less. Sometimes that simple move will get someone out of financial dire straits on their own.

If you all $1500 on your Discover card, and you’re struggling to find a way to pay, you fixed your tax withholding, you’ll have more money to pay that debt off, and the sooner you pay that debt off the less likely you will be to fall even further behind on your Discover card.

The next suggestion I have is to make a list of everything you spend money on for a week. That might seem silly but I did that in January, and I learned that I spent $30 at Starbucks, $18 at Joey Vento’s Gino’s Cheesteak’s, $120 at Merchant’s Square Mall, and almost $50 on various fast food (we have lots of health food in Philly). That was almost $200 a week on crap.

Rather than spend $30 at Starbucks, I bought an iced tea brewer for $25.  My iced tea costs around six dollars per month and it’s much healthier too.  I’m not going to say that I completely kicked the Starbucks habit, but it’s not a once a day thing anymore. I didn’t give up Gino’s completely either, but it’s become a once a month treat rather than a three times a week deal, and I didn’t give up fast food totally either, but the sandwiches I make are just about as good as what McDonald’s can come up with and for a fraction of the price.

I confess that the $120 I spent At Merchant Square Mall was just crap, I haven’t completely kicked that habit either, but definitely more aware of when I spend money at that place and now have the good sense not to go in just to say hello.

I’ve been able to lower the amount of money spent on crap per week from $200 to around $50, and the $150 savings per week is going towards paying my car off that much faster, and when this is paid off I’m going to knock out another car loan, I have a strategy for that as well, but that’ll be a subject of another post on another day.

The bottom line is most people would come see me don’t really need bankruptcy, they needed their financial house in order, the best way to do this is to figure out how much you make, how much you spend, and prioritize to determine whether you really do need the help of a bankruptcy lawyer were just a little bit of self control, because I assure you if you do not take control of your financial situation you will need my help and it will be sooner rather than later.

If you need help coping with your debt struggles and you don’t know where to turn to, please check out Jim Valeri’s site Jim Valeri, Counselor, and then when you are ready to get on the road to financial recovery, email me at jim@padebt911.com or call me at 484-661-2891 to schedule your free, no-obligation consultation.

The first thing that you need to know about magistrates is that they don’t have to be attorneys, but often they are.

The second thing you need to know about magistrates is that the credit card companies representative is probably just as nervous as you are, because these courts are unpredictable, a little bit like the Wild West.

What makes these courts so unpredictable are the judges.  Frankly, the magistrate system in Pennsylvania is broken because the wide variety of cases that these judges have to hear it sure is that no magistrate is likely to be an expert on any given field.  This is not the bankruptcy court where a bankruptcy judge will be an expert in the field because all they do is bankruptcy.

The best way to defend a credit card case is to make sure you don’t go in front of the magistrate.  Don’t let your debt problems get that far.

I’ve seen instances where an unsecured creditor has gone in front of a magistrate, gotten a judgment, got a lien on the debtor’s home, and made it difficult to get a mortgage modification and frustrate the bankruptcy case as well.

This is ridiculous.  Discover card should not be able to make itself a secured creditor simply by getting a judgment, and as a consumer it’s your responsibility to make sure that it doesn’t happen.

So I’ve been summoned to the magistrate, how do I avoid actually going to the hearing?  You could pay your debt, but if you could pay your debt you probably wouldn’t have made your creditor chase you for a year or more.  So my suggestion is if you are unable to immediately file bankruptcy protection is to discuss a settlement with that credit card company.

Once a case has been filed, the creditor is not likely to be as generous as they were prior to the filing of the case, because they have expended money in bringing the case and they are going to want to be reimbursed for that.  Generally speaking, creditors are excepting 80% percent of the balance or $200 per month on the full balance until the debt is paid in full.

It may seem sneaky or even dishonest, but I would find out from the creditor how long they would wait to except the first payment. Alternatively, you can tell the creditor that you’re planning to seek bankruptcy protection, and therefore they are unlikely to receive any money.  At least one creditor, Capital One, it has been known to cancel hearings based on that alone because they don’t want to pay the attorney who will have to appear for them when they are not likely to recover anything.

I’ve told you before him to tell you again, credit card companies have lawyers an army of working on their behalf, you really should get one too.  Chances are you don’t have just one credit card, but several credit cards in this situation, and its only time before they all come knocking.

If you’re ready to fight back against the credit card companies underhanded tactics, call me at 484-661-2891 or e-mail me at jim@padebt911.com to schedule your free, no obligation, consultation.

Maybe you’ve heard it, it has something that sounds like gospel music playing in the background and the song has a lot to references to freedom.  I’m not against freedom, but it’s clear that they were targeting a demographic, and that demographic is African-American people, particularly women

I market to a specific demographic too, so there is nothing inherently wrong in targeting your audience to make sure your message reaches the right group of people who need your services, but this is more nefarious.

African-American women are being targeted by this company because they believe they are an easy mark for an inferior product at a lower price.  This debt settlement company’s product is inferior because they are not lawyers, in fact you will probably learn that their employees are in as much debt, if not more, than you are.

I have heard the Spanish language version of this ad.  This ad has Latin music playing in the background, so what?  As stated earlier, there is nothing wrong with demographic marketing.

What is wrong is the reason behind this target.  This company preys on these people because they are unlikely to fight back.  The Spanish speaking customer who is wronged will call in and suddenly they will not be able to find a Spanish speaking employee on site (by the way, I just hired my first bi-lingual employee today, his name is Manuel, and he will be converting this site into Spanish over the next few weeks).  Spanish speakers have less access to the courts because of the language barrier and if there is an immigration issue hanging over their head, they do not want to be noticed.  One immigration lawyer told me this company can market to Hispanics because “if they screw up and the customer tries to sue, they will get them deported!”

I suspect this company is targeting African-American women for similar reasons.  Most African-American women who go to a debt settlement company do not have extra money to hire a lawyer to chase this company if they fail to deliver.

I might be completely off-base.  There may not be any bad intention on this company’s part, but I’m pretty good at smelling a rat, and non-lawyer debt settlement is a lousy product.

If you are ready to resolve your debt problems and are ready to talk to a lawyer who will show you the respect you deserve, call me at 484-661-2891 or email me at jim@padebt911.com, and you can experience freedom from debt too.

It was doomed to happen.  In 2005, houses routinely fetched $250,000 to $300,000 yet the median salary in the Lehigh Valley was around $36,000.  Given the miserable performance of this economy, it’s unlikely that the average salary has gone up much since then.

The housing boom here was out of control, no doubt about it.  A lot of people were relocating from New York City and its suburbs to the Lehigh Valley for its lower taxes and lower cost of living, but because these folks who were used to paying $600,000 or more for a house didn’t think twice about paying $300,000 for a house that just 10 years ago might have gone for $130,000.

To make a long story short, the New York contingent artificially inflated the sale price of homes.  The New Yorkers are not totally to blame for this however, interest rates were kept artificially low by the Bush administration and borrowing money was never cheaper.  Another factor that went into this was the rampant fraud and the fact that you could have zero proof of income, no down payment, and qualify for one of these variable rate mortgages.  If Bernie Madoff had come up with this, they would’ve given him the chair.

So that brings us to today.  The same houses that were selling for $300,000 are now down in the $180,000 range, and I think they’re probably still too high.

A client came to my office on Friday.  He is a single man with a three bedroom 2 1/2 bathroom house in Allentown.  He hadn’t made a mortgage payment in a year, but now he was back to work in able to make his payments again, kind of.

My clients mortgage payment was $1105 per month.  He had a second mortgage of $242 per month.  His weekly take-home pay was somewhere in the neighborhood of $500.  If you’ve done the math you can probably see where this is going.

To make a Chapter 13 plan work for my client, he would have needed to pay a minimum of $300 per month and probably more to the Chapter 13 trustee.  With take home pay of $2166, my client would have expended close to $1900 per month just to stay in his home.

Clearly Chapter 13 bankruptcy wasn’t going to work for this man, however he had a 401(k) with about $100,00o in it.  He asked me if he should take a withdrawal from it to pay the past the past due on his house to stay in his home.  Looking at a situation, I had to tell him no.

Here’s why, he was going to dip into his retirement, something the Chapter 13 trustee cannot touch and very few creditors can go after, to save a house that he owed $30,000 more on than it was worth, and moreover, a home that he really did not need.

What was a bachelor doing a three bedroom two and half bathroom house?  He had never been married, his girlfriend lives in another apartment, so really he has a house way too large for his needs.   Now if he were financially able to keep the home, I wouldn’t care, because generally speaking real estate is one of the best investments out there, especially now, but this man was going to struggle to pay his mortgage even after taking a loan out of his retirement.

The bottom line is this, I could have taken the man’s money and filed a Chapter 13 bankruptcy for him, and it might have even worked. Chapter 13 bankruptcy is not for everybody, neither is mortgage modification, you may feel bad or a responsible for letting your house be foreclosed on, but the banks were just as irresponsible in their lending.  The banks went to the government and got a bailout.  No one asked your opinion when they took your tax dollars to bail these people out, nor did they offer you one (and its not coming either).

Sometimes it’s best to let the banks foreclose on the property, I know it hurts, but rather than spend $1400 per month on a home too large for him, my client is going to find an apartment in the $600-$700 range which will work for his budget and will allow him to regroup financially.

Once a foreclosure is over and my client has resettled, I advised him it was in his best interest to file Chapter 7 bankruptcy.  My client racked up nearly $30,000 in credit card debt trying to save his home. If he made the minimum payments, it would take in 35 years or more to pay his credit cards off.  Furthermore, some of the credit cards had been charged off and sent to collection and some of these agencies have become sue-happy lately.

Again chapter 7 bankruptcy is considered by some to be irresponsible, but the reality is these banks were irresponsible lending money to people who couldn’t possibly pay it back.  We don’t have debtor’s prison in the United States for reason, don’t allow yourself to be put in a debtor’s prison without bars.

Hopefully my client will take the next logical step and follow through filing Chapter 7 bankruptcy as we discussed at the meeting.  If you are unsure about your situation and want to know whether or not it makes sense to even just try to stay in your house, call 484-661-2891 for your free no obligation consultation.  You can also e-mail me at Jim@padebt911.com.  All contacts are kept strictly confidential.

The call came in around 6:15 PM, and a man who claimed to be from Visa/Mastercard called saying he could lower the interest rate on my credit card to 6.9%. I still have one credit card left, and like I said I was curious, so I decided to chase the rabbit and find out what the story is.

He first asked if I had a credit card with a high balance but that I was at least $1000 under my credit limit. He said those were the parameters to make sure he could help me. I said yes.

So then he asked what the credit card number was. Normally my smarter side would kick in and I wouldn’t give this information out, so I grabbed a pen and paper and wrote down a sixteen digit number that started with a “4″ and gave it to him. I wrote this number down so I could keep the ruse going. If this guy was going to hang himself, I would need to give him some rope.

At that point, I asked for his name, and he replied “Ronney Archer.” He then asked for my expiration date, which I made up as well.

He then asked for the seven digits on the back of the credit card. I made up some more numbers, making sure the fourth number was a “0″ in order to fit within Visa’s parameters. I asked him for a phone number and he gave me a phone number that wound up being a phone line for a motel registration company.

Finally, if I wasn’t sure this was a scam, Ronney asked for the phone number for customer service and put me on hold. (I know Citibank’s phone number from memory because I deal with them so often) He told me he was checking with another department to lower my rate by I know darn well that he was calling to check the space on my card.

He came off hold and asked me if he had the right credit card number and repeated it to me. I told him he was one number off. He then asked for my social security number. I gave him a bogus number ending in “0666″ and he put me back on hold.

A few minutes later, he got back on the phone and he asked if he had the right credit card number again. I changed one more number and he asked me if he could have my phone number in case we got disconnected. I decided to do what I call the U.S. test and I gave him the number 215-867-5309. Any American over age 30 would remember that phone number from the annoying 80s song and call bull, but this guy did not.

All told, I spent 20 minutes on the phone with this crook and hopefully I cost him some money.

There is fraud out there, everywhere, and if you are not careful, you could get taken. Never give out personal information over the phone to someone claiming they will help you. Your bank has your card number and expiration date, they also have your social security number, no one calling from your bank should ever ask for this information.

If you are ready to get real help from a real live lawyer who specializes in helping people with their debt problems, then call me at 484-661-2891 or email me at jim@padebt911.com to set up a free consultation.

Two of the highest rate filers are Discover Card and Capital One, with Discover Card probably outstripping Capital One at a rate of 5 to 1.

I’m not sure why they’re doing this.  In Pennsylvania, credit card companies are not able to garnish wages, however they are able to garnish bank accounts.  In my experience the average person being hauled into court for credit card debt doesn’t have more than a couple hundred dollars in a bank account at any given time, so I don’t really understand why these credit card companies are going to the expense of getting a judgment.

It can’t be to have priority in a bankruptcy proceeding because at the end of the day they still unsecured creditors in a Chapter 7 bankruptcy and are probably not going to get anything.  They can’t garnish wages because as mentioned above they are not allowed to.  So why are credit card companies now suing in the Magistrate and Court of Common Pleas courts the state of Pennsylvania?

I think it’s about intimidation.  The average consumer doesn’t know that a credit card company cannot garnish wages.  The average consumer doesn’t know the credit card company can garnish a bank account.  The average consumer who has a charged off a credit card probably has other credit card debts and other debts pressuring  them, and it might be that the credit card company wants to be the first on their list to be paid.

It probably isn’t worth the day you will lose taking off from work to fight this suit.  You need a competent attorney to defend your rights, and you need one quickly.  If you owe Capital One, Discover or some other renegade credit card company$4000 and they get a judgment, and then they somehow grab it from your checking account in a garnishment, that money is gone forever.

The most important the thing about dealing with your debt problem is being in control.  It’s a roller coaster ride up and down from 0 to 150 mph in a second.  Scary eh?  What’s scarier is that you’re at the control of this roller coaster.  You can either let go a handle and let things fall the way they may, which will almost always result in your creditors taking advantage of you, or you can choose to control the situation yourself.

Before some rogue credit card company gets a judgment against you and pulls the last money you had saved out of your emergency fund, to pay for months of late fees finance charges inflated attorneys fees, you should contact an attorney who will help defend your rights.  Yes the credit card companies have rights, and they are not shy about defending them, but you have rights too, and you probably don’t have the time to defend them while you try to make it through to the end of this week.  The credit card companies have an army of attorneys to defend their rights, don’t you owe it to yourself and your family to take advantage of at least a free consultation?

When you are ready to defend yourself against rogue credit card companies, out-of-control debt collectors, and all the other financial creatures that go bump in the night, contact me at 484-661-2891 or e-mail me at Jim at padebt@911.com for your free no obligation consultation.