Consumer Law Office of
Robert Stempler, APLC


Providing Legal Counsel for
Consumers in
California’s Courts

1-888-367-4790

• Collection Lawsuits
• Credit Card Debt
• Medical Collection
• Student Loan Lawsuit
Serving California Consumers
Client testimonials cannot predict results in any other case, nor is any testimonial considered an average or likely outcome.
Client testimonials cannot predict results in any other case, nor is any testimonial considered an average or likely outcome.
Client testimonials cannot predict results in any other case, nor is any testimonial considered an average or likely outcome.
Back to Articles

Terminology of Collection Lawsuits

Answer to Complaint The document that a defendant files in court to respond to a lawsuit. Unless the fee is waived by the Superior Court for financial hardship, each defendant must pay the Clerk a first appearance fee to file an answer to complaint. Unless extended by the plaintiffs attorney or the Superior Court, the answer should be filed within 30 days of personal service or 40 days of substitute service.

Assignment The process or document by which the rights to collect a debt or an account is transferred from one entity to another, usually for money. Often debts are assigned multiple times from one debt collection agency to another. The phrase assigned for collection sometimes means that a debt collection agency was hired to help collect a debt, without a transfer of rights. An assignor is the entity that transferred its rights and the assignee is the entity which received the rights.

Breach Also known as breach of contract, a breach starts the day after payment was due on the credit card or other account, if the minimum payment was not made. This is also known as default, but not to be confused with the term default, which the Courts use to describe the status of a defendant who failed to file an answer to complaint, after being served.

Charge Off Also known as charged off to bad debt. or written off, this is an accounting term, which refers to the month when the banks accounting policies require that they consider the account a bad debt and no longer expect payment. Some people mistakenly believe that the bank can no longer collect the debt, but this is not correct, because the banks rights to the debt remain intact until they assign their rights to collect the debt to a debt collection agency.

Complaint A lawsuit filed in court that states the plaintiffs claims. In California, a debt collection lawsuit is normally brought in Superior Court of California, although debts with a balance of at least $75,000 or demanded by the Federal Government may be filed in U.S. District Court. For a principal balance of under $25,000, the Superior Court designates the case Limited Civil, which has slightly lower filing fees and there are some unique rules of civil procedure.

Cross Complaint A lawsuit filed in Superior Court that states the claims a defendant has against the plaintiff or others persons. A cross complaint must be filed with the answer to complaint or with court permission.

Default The failure of a party to perform as required by law. In collection lawsuits, the failure of a defendant to file an appearance in court, after being served. The Clerk of the Court reviews the case file to ensure that a proof of service and other documents have been filed to permit a default. See also breach, which refers to an account with overdue payments.

Default Judgment A judgment, when a defendant was served, but failed to appear or the appearance was stricken by the court. In collection cases, the Clerk of the Court usually enters a default judgment, but sometimes a judge reviews the case file for a default judgment. Following proper service, a default judgment is usually enforceable as a judgment of the court, although it may be set aside, if the court determines the summons and complaint were not properly served or the defendant had some excuse for not filing an answer to complaint.

Defendant The party whom a complaint states breached a legal obligation or committed other violations of law. The party who answers a civil complaint. In collection matters, the defendant is usually the consumer, borrower, buyer, or debtor.

Discovery The formal process that permits a party to request another party or a third party to provide testimony, documents, or other information under oath. This may take many forms, including: depositions, demand for production of documents, requests for admission, specially prepared interrogatories, form interrogatories, physical or mental examinations, subpoenas, and subpoenas duces tecum (for business records). Requesting and responding properly can be a challenge, even for experienced attorneys, and mistakes sometimes lead to sanctions.

Dismissal In California Superior Court, a plaintiff may request dismissal of the complaint at any time or the court may order dismissal, upon certain findings and opportunity to be heard.

Garnishment A form endorsed by the Clerk of the Court that an employer must withhold part of the defendants wages to satisfy a money judgment. Sometimes referred to as an Earnings Withholding Order (Wage Garnishment), the employer should withhold only the amount required by the garnishment instructions. The employee can request a hearing to claim an exemption. Visit the Judicial Council website, under Wage Garnishment, for forms that may apply.

In Pro Per A shortened version of the Latin phrase, in propria persona, for an individual who has no attorney in a Superior Court case. In U.S. District Court, the common phrase for self-representation is pro se.

Judgment A court order, usually that one party must pay an amount of money to the other party. See also: Default Judgment, Writ of Attachment, and Garnishment.

Motion for Summary Judgment A formal request by one party for a hearing, because all material facts are undisputed and the Court should enter a judgment in that partys favor. Collection attorneys file these motions to prevent a trial, if they believe the defendant will not know how to oppose. Thus, individuals who represent themselves without an attorney often do not go to trial, because the plaintiffs attorney may file this motion.

Obsolete This term applies when a derogatory item may no longer be reported by a credit reporting agency, under the Fair Credit Reporting Act. It is a separate from the statute of limitations period. A collection account may be reported for up to 7.5 years from the date of the breach; other derogatory items typically are limited to 7 years. Accounts and other information that are not derogatory typically can be reported forever by a credit reporting agency.

Personal Service The act by an adult who is not a party to the lawsuit personally handing the summons and complaint to the defendant. This is often performed by a professional process server, although many Sheriffs perform this service for a fee. Unless extended by the plaintiffs attorney or by court order, the defendants answer to complaint should be filed within 30 days of personal delivery in Superior Court and 21 days in U.S. District Court. Plaintiff The party who is complaining about the breach of a legal obligation or other violations of law against the defendants. The party who initiates a civil complaint. In collection matters, the plaintiff is usually a financial institution, lender, seller, or debt collection agency.

Proof of Service The document, usually signed under the penalty of perjury, that states the date, time, address, documents delivered, and manner of service. The Proof of Service must be filed with the Court before a default may be permitted, if the defendant fails to appear in the case.

Service The procedure of giving formal notice in a legal proceeding. It often refers to the delivery of the summons and complaint to the defendant. See also: Personal Service, Substitute Service, Proof of Service, and Sewer Service.

Settled Satisfying a debt, without having to pay the full amount due, including interest. In contrast, paid in full means paying the full balance and accrued finance charges on a debt. Sometimes the phrase settled in full is used to show that the entire debt has been satisfied, while partially settled would indicate that part of the debt was satisfied, but some remains unsatisfied. It is best to have a document confirming the terms of the settlement, although sometimes clear notations on a check or money order are adequate.

Settlement An agreement changing the rights and obligations between persons. Settlements are typically stated in a written agreement or confirmed in writing. Settlement of a collection lawsuit usually specifies dismissal of the lawsuit, upon receipt of any agreed payments.

Sewer Service Preparing a Proof of Service that falsely states that the defendant was served, when service was not performed in the manner specified. The term refers to the fact that the summons and complaint were not delivered, but instead thrown away. If a defendant was not served properly, a motion to set aside the default judgment should be filed.

Statute of Limitations A statute of limitations is the law that limits the time a complaining party (such as the plaintiff) can sue for breach of contract or violation of law. There are a variety of time periods, usually measured in years, that may apply. A collectors violation of the Fair Debt Collection Practices Act must be filed within one year, although there are circumstances that may extend this. California law requires breach of written contract be filed within four years from date of the breach. Payments made or written promises to pay a debt can revive this period. Debt collectors try especially hard to get a payment, when the four-year period is about to expire. Some contracts have a three-year period, because of state law where the bank operates. Some accounts have an even shorter period, such as two years for telephone bills and oral contracts.

Substitute Service The act of someone who is not a party to the lawsuit personally handing a summons and complaint to an adult member of the defendants household or the person who appears to be in charge at the defendants place of business, then mailing a copy of the summons and complaint to the defendant at that same address. Service is often performed by a professional process server, although many Sheriffs perform this service for a fee. Unless extended by the plaintiffs attorney or the Superior Court, the defendants answer to complaint should be filed within 40 days of the mailing to complete substitute service.

Summons The form prepared by the California Judicial Council gives notice to the defendant of a lawsuit in Superior Court and the number of days the defendant has to file an appearance, before losing the right to present their defenses. A sample summons is at this link.

Writ of Attachment A form endorsed by the Clerk of the Court that a judgment for money may be collected from funds on deposit at a particular bank. Sometimes referred to as a bank levy or an account freeze.

Back to Articles