Imagine receiving a phone call that 25% of your wages are going to be garnished because of a credit card account opened 14 years earlier that was never paid off. Making things worse, you know you didn’t have a credit card from the bank in question at that time, so it can’t possibly be your debt. This should be an easily remedied error, but not if a court has already granted a default judgment against you, making you responsible for paying back money that you didn’t owe and didn’t find out about until it was too late.

This is not some nightmare academic scenario for law students to think about. It’s a living nightmare for thousands — potentially millions — of Americans, including California resident Christy, who is fighting to set aside a default judgment that allowed a debt buyer to garnish her wages for a debt that doesn’t actually belong to her.

In 2013, Christy learned that her wages would be garnished to the tune of $375 — per paycheck — because of a $2,000 credit card she allegedly opened through Providian Financial Corporation in 1999.

“I kept saying ‘it’s not my debt.'”

When she didn’t show up to the court hearing in 2006 — because she says she was never notified that a hearing was taking place — the judge granted a default judgment, allowing the company to go after her for repayment.

When Christy later tried to explain that they must have her confused with someone else because she never had a credit card from Providian, she was told that because the judgment was more than two years old there was little she could do.

And so, she looked for a way to fight back as she paid $375 per paycheck for someone else’s debt.

That’s how Christy got involved with the East Bay Consumer Law Center, and it’s where proposed California Senate Bill 641 [PDF] comes into play.

Christy’s situation is the result of an unlucky trifecta: poor record keeping by creditors; an environment where debt can be bought and sold more easily than a pack of gum; and a desire by those debt buyers to quickly turn a profit.

“The debt buying industry in recent years flooded the court system with cookie-cutter lawsuits, as a mechanism to collect debts from consumers,” Suzanne Martindale, staff attorney for Consumers Union, explains. “Unfortunately, certain debt buyers were obtaining default judgments against consumers with little more than robo-signed affidavits [legal documents signed without proper review] to back up their claims, and often failed to give consumers proper notice of the lawsuits. These lawsuits spiked during the Great Recession, and wreaked havoc on thousands of consumers in the state.”

Two years ago, lawmakers in California took steps to rein in these practices with the Fair Debt Buying Practices Act [PDF]. This law, which went into effect in 2014, requires debt collectors to verify that an obligation is real before going after consumers.

Similar protections already existed at the federal level, but the state bill was more specific in its requirement that collectors take extra precautions in making sure money is truly owed.

Ted Mermin, a lawyer who does pro bono work for the East Bay Law Center, tells Consumerist that the legislation succeeded in addressing some of the “wild west abuses” of the debt-buying industry in the pre-recession years.

While the Act was sorely needed in the state and stands to protect millions of consumers, it only applies to debt purchased on or after January 2013.

That means billions of dollars in debt purchased prior to that date is still fair game for sometimes abusive and unfair debt practices.

“Now it’s much harder to get a default, but back then there was never an original contract or barely any paperwork.”

“So you still have people out there that do not owe a debt and are being forced to pay – wages garnished and bank accounts levied – despite the fact they never owed the debt or weren’t properly served, or they paid off the debt previously,” Mermin says.

Currently, under California law, if more than two years have passed since the entry of a default judgment, a consumer may have no way to stop a garnishment — short of bringing an entirely new action — even if she never knew about the lawsuit or the supposed debt in question, says Martindale.

And such action is often out of reach for many consumers, Mermin tells Consumerist.

Only a fraction of low- and middle-income consumers in California can get a lawyer to help them. The great majority, under existing law, have no recourse.

Some defendants will even pay a wrongfully assigned debt off because the amount of the debt is less than the money it would cost to fight the matter in court.

Sharon Djemal, director of the Consumer Justice Clinic at the East Bay Community Law Center – which is assisting Christy in her case – tells Consumerist that the Center sees at least one person each week dealing with these same unfair debt collection scenarios.

She says these consumers generally present two types of cases: the client comes in with a wage garnishment that was about two years and one month past the deadline; or the client was misidentified — the debt collector sued the wrong person, and sometimes the judgments can be eight to 10 years old and this is the first time they had heard of it.

While Djemal and her students at the Center began fighting to set aside default judgments that resulted in wage garnishments and bank levies against clients, they soon realized such cases were a big problem for residents in California.

“We started tackling it by doing thorough investigations and getting court documents and working on things the consumer can’t do on their own,” she says.

Over the course of their investigations into consumer accounts, Djemal and her students found many hallmarks of abusive and unfair debt collection.

In one case, she says, documents showed the process-server went to the debtor’s house to provide notice of the lawsuit – an event the consumer says never happened. After some digging, it turned out the processor had several other signatures – a sign, Djemal said led them to believe it was a case of robo-signing.

“We were able to show that this wasn’t right, this person doesn’t exist or is selling his signature,” she says.

“It’s in many ways an access to justice issue. It’s about letting people get into court to show they don’t owe a debt. That’s all”

While the center has been able to assist many consumers facing these situations, Djemal believes it shouldn’t be such a long, drawn-out process.

“Now it’s much harder to get a default, but back then there was never an original contract or barely any paperwork,” she says of the process before the 2014 law went into effect. “And it’s so old, it’s hard to show that it wasn’t this person that was contacted.”

As a result of her dealings with these debt collection abuse cases, Djemal, her students and legislators set out to make changes through the legislative process.

A student working with Djemal at the East Bay Law Center happened to be in Mermin’s class last year, that student began crafting a law that would allow consumers to more easily move to set aside default judgments obtained by debt buyers.

And so, the first draft of California Senate Bill 641 was created.

“Nobody should have to repay a debt they doesn’t owe: this is true whether a supposed debt arose yesterday, and it is true if it arose ten years ago,” a fact sheet for the law states. “Unfortunately, under current law if innocent low- and middle-income consumers don’t bring a motion within two years, they have no realistic remedy.”

SB 641, which was introduced and championed by California State Senator Bob Wieckowski, intends to allow California victims of unfair debt collection practices to move to set aside default judgments obtained by debt buyers within 180 days after the first actual notice of the lawsuit.

The protection would ensure that consumers can defend themselves in situations where they received no initial notice that they were being sued, through no fault of their own.

“This is an important step forward to providing increased due process protections for California consumers,” Wieckowski said in a statement. “Legal services providers and other non-profit organizations across the state that work with low- and middle-income Californians are seeing an alarming number of debt collection cases where consumers are getting their wages garnished without ever getting a day in court.”

To be clear, setting aside the default judgment doesn’t automatically void the plaintiff’s claim, it merely restarts the lawsuit, allowing the defendant to properly argue their case.

As Martindale points out, hitting this reset button on the complaint restores a consumer’s right to defend herself and have her day in court – a day that was robbed of her the first time around.

“Debt buyers are in the best position to retain important documents related to service of process,” she says. “It makes no sense at all to strip away a consumer’s right to defend herself simply because debt buyers may not have their paperwork in order.”

The bill has so far made its way through the California legislative process, with the expectation it will be heard on the Senate floor this week.

“It’s in many ways an access to justice issue,” Mermin tells Consumerist. “It’s about letting people get into court to show they don’t owe a debt. That’s all.”

And that’s what these people deserve, Djemal says, their day in court and finding a quick, fair resolution, something not currently afforded to victims.

Djemal says that each case varies, and getting needed relief to consumers – generally by way of stopping garnishments – can be a test of endurance and patience for both clients and staff.

“Putting the whole story together and figuring it out,” she says. “The burden shifts to the client to prove that this isn’t me. Eight years or more can go by and the evidence is minimal.”

While courts are required under the Government Code to retain all the documents relied on by the debt buyer to get its default judgment – and those records must be held kept for as long as the judgment is valid – sifting through that information is much more difficult than it might seem.

So many things can happen in the years that have passed between when a default judgment was awarded and when the consumer is notified of garnishment that makes it increasingly difficult for individuals to prove their cases.

For example, shoddy record keeping, coupled with the sale of many smaller banks during the recession has created an environment where it can be nearly impossible to get your hands on pertinent information.

That was the case for Christy. When she was contacted by the debt collection agency regarding her garnishments, they asked if she had opened a credit card with Providian back in 1999.

While she says she did have an account with the institution at the time, she never opened a line of credit. Following the breadcrumbs from the supposed debt back to its opening nearly two decades ago has been difficult.

Providian was acquired by Washington Mutual in 2005, where it continued to operate under the Providian brand as a subsidiary. Three years later, at the beginning of the Great Recession, Washington Mutual became the biggest bank failure in U.S. history.

The federal reserve stepped in and Washington Mutual’s assets were auctioned off to JPMorgan Chase for $1.9 billion.

If that’s not hard enough to follow, many of the debts owned by Providian and then Washington Mutual were sold, including Christy’s. In fact, the debt in her case had already been sold prior to 2006 when the default judgment was handed down.

To make things even more complicated, Djemal – who had permission from Christy to speak about her case with Consumerist – says that a trail for the debt shows it was actually sold twice, which is illegal.

“So in addition to it not being hers – she has no recollection of opening the account – we can’t even find a record of a chain that makes sense,” Djemal says. “Of course, when it’s been this long since the judgment, the burden is on her which is challenging.”

These situations can be even more Sisyphean for those who were already living paycheck to paycheck before the wage garnishment.

While most clients who are able to set aside a judgment and later prove they don’t own the debt are able to recoup those lost wages, it can take months, Djemal says.

That’s one reason some people jump at the chance to either just pay a un-owed debt or take collectors up on their offer to pay a fraction of a debt to leave them alone.

“I told [the lady that called] ‘I don’t own this debt’,” Christy tells Consumerist. “She said ‘if you give us $100 it will keep us from garnishing your wages.’ I kept saying ‘it’s not my debt and I don’t feel comfortable paying for this debt.'”

Instead of paying the $100, Christy’s wages were garnished – so far to the tune of $1,400 – and she began working to pick apart the collector’s case.

Since turning to the East Bay Law Center for help, a judge agreed to suspend the garnishments against Christy, but those lost wages won’t be returned until the judgment is set aside. Christy has a court appearance later this month that could potentially resolve her issue.

“They helped me file a corrected financial exemption,” she says of working the the East Bay Law Center so far. “I just wanted to beat the deadline, but I didn’t know what I was doing.”

Christy and staff at the law center have gone back to retrace her steps during the time the original default judgment was awarded.

Records from the court case show that an African-American male in his 30s was served at a home in 2006. While Christy’s family previously lived at that address, she was able to prove that she wasn’t living at that residence when the papers were supposedly served.

“But that’s not quite enough, we have to show that it wasn’t her debt,” Djemal says. “These cases are all very similar in that they are old, it takes a huge amount of resources to try to prove a negative.”

And while Djemal and those who provide similar services can help consumers with these issues, some don’t have resources at their disposal.

“There’s no way someone who doesn’t have a legal services agency can do it on their own,” Djemal says of the reasoning behind SB 641.

Djemal’s hope is that if the bill passes as is, easy-to-follow forms could then be utilized in more rural areas where services aren’t readily available.

“Then they would be able to go to court and represent themselves,” she says. “It should be in a way that people can do it themselves, to get them back to the place where the service should have begun.”

“It seems like to me that it’s a no-brainer that something should be done to fix this problem,” she says. “When I wrote this law – I assumed that it was a no-brainer and there wouldn’t be much opposition – who wouldn’t want someone to have day in court.”

As the California legislature continues to debate the merits of SB 641, consumers in other states are likely dealing with similar issues – albeit on a varying basis.

Martindale with Consumers Union couldn’t speak to civil procedures in all states, but noted that “given how widespread the abuses were nationwide with robo-signed lawsuits from debt buyers, I imagine the problem of being barred from contesting old default judgments likely exists beyond California.”

Indeed, April Kuehnhoff, staff attorney for the National Consumer Law Center, says that similar issues are increasingly affecting people around the country.

State laws vary when it comes to how much time a defendant has to challenge a judgment, and there are different standards for what constitutes a challenges. Consumers are often still left with the burden of showing they don’t owe a debt or they were never notified of a judgment.

Such is the case in Michigan, which has a similar process for consumers facing default judgments.

According to Michigan Legal Help, an organization that provides legal assistance for low-income residents, the timeline to set aside a judgment is just 21 days after the order is handed down by a court.

If the consumer doesn’t meet that deadline, they must prove they have good cause and a meritorious defense to get the default judgment set aside, often through the legal process.

“There is no simple form you can use to ask for relief from a judgment,” the organization states. “You may want to talk to a lawyer about this.”

“I think that statistics we’ve seen from around the country about the number of people who have default judgments,” Kuehnhoff says of estimates that 90% of consumers with such debt cases receive a default judgment, “highlights that this isn’t an isolated incident, but a broadly applicable problem all over the country.”

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