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

Understanding why you were sued

Once a payment has been missed, you are in default on your obligations to the financial institution on an account and late payment charges are added. If enough payments are missed, sometimes a higher default interest rate will be applied. Some banks have their own collection department to call you. After several months of no payment, many banks assign the debt to a debt collection agency. The bank either sells the debt to an agency or hires the debt collector to simply contact you to convince you to make payments or settle the account.

Once the debt has been sold, the original creditor no longer owns the account. This does not prevent the original creditor from reporting the account to credit reporting agencies, but it should report that the account was sold or transferred and that its current balance is zero. This can be reported for seven years from the month of the default.

Most banks have so much bad debt that they sell it in a pool with many other accounts. The price paid for the debt pool is a percentage of the total principal of all the account balances. The debt buyer may put the account into another pool for sale to other debt buyers. The debt buyer is a debt collector, but it is not required to notify you of the sale, nor must it attempt to collect the debt. Some debt buyers never contact consumers, while some use other debt collectors to contact the consumer.

To name many of the debt buyers that Robert Stempler has litigated in court:
  • Allied Interstate, Inc.
  • Arrow Financial Services, LLC
  • Asset Acceptance, LLC
  • Atlantic Credit & Finance Inc.
  • Attention, LLC
  • Client Services, Inc.
  • Corporate Trust Recovery
  • Credigy Receivables, Inc.
  • CTR Recovery Enterprises, Inc.
  • Encore Capital Group Inc.
  • GCFS, INC., a California Corporation
  • Genesis Financial Solutions
  • Greater California Financial Services
  • LHR Inc.
  • LVNV Funding, LLC
  • Marshall and Ziolkowski Enterprise, LLC
  • Midland Funding, LLC
  • Modern Adjustment Bureau
  • MRC Receivables Corp.
  • NCO Portfolio Management Inc.
  • North Star Capital Acquisition, LLC
  • Palisades Collection LLC
  • Park Dansan
  • Penncro Associates, Inc.
  • Pinnacle Credit Services
  • PMGI, LLC
  • Portfolio Recovery Associates
  • Professional Investment and Finances, LLC
  • Refinance America LTD
  • Reliable Adjustment Bureau Inc.
  • Resurgence Financial, LLC
  • Sherman Financial Group
  • Tate and Kirlin Associates
  • Telecheck Recovery Services, Inc.
  • The Bureaus Inc.
  • Unifund CCR Partners
  • U.S. Department of Education
  • Worldwide Asset Purchasing, LLC
Expect to receive at least one letter from a debt collector after the creditor charged off the debt. The initial letter from a debt collection agency should contain the Mini-Miranda notice that the consumer has 30 days to dispute the debt or request that it be validated. Sometimes the consumer receives phone calls before receiving the initial letter, but the letter with the Mini-Miranda must be sent within five days of the initial communication with the consumer.

Even after several years of collection letters and phone calls, consumers sometimes do not make any payments towards a debt. At some point, the debt collection agency must decide if it is worthwhile having an attorney prepare a lawsuit and pay the courts filing fees. This decision is based on the debt collectors policies, using all information available. In particular, the debt collector has had phone calls with the consumer and knows the consumers age, location, income, attachable assets, and the consumers credit report.

Debt collection agencies have a range of polices regarding whether to sue in court. Some sue in only certain states, such as where they have existing collection attorneys or where they have an office. Some never sue or never sue in another state, and only call the consumer or report the debt to one or more credit reporting agencies. Some collection agencies send one letter and then sue, and some sue and then send a letter. Some sue after the consumer has sent them a letter to stop communicating with them or to stop calling, or if the consumer refuses to speak with them.

The main reason why debt collection agencies sue is when the statute of limitations is about to expire. Payments on the debt can revive the statute of limitations period, before it expires. If they fail to file a lawsuit before the statute of limitations period expires, the debt cannot be enforced in court. The debt collector cannot even threaten to sue, once the limitations period has expired. Thus, a large number of collection cases are filed near this deadline.

Back to Articles