Consumers who are battling lawsuits, court judgements or garnishments over credit card, student, medical or car debts now have a new ally in court to fight off abusive creditors.
Attorneys at the Western New York Law Center are promoting a new free consumer law service, specifically designed to assist consumers who are not represented by a lawyer as they battle debt collectors.
Consumer advocates see such cases as a growing threat for people, who are often unsure of what to do or even unaware they have been sued. So they don’t put up a fight – even though they have legitimate grounds – and lose money to creditors who don’t deserve it.
The new Buffalo Civil Legal Advice and Resource Office (CLARO) works with consumers to avoid “default judgments,” in which a creditor gets a court order in its favor because the debtor doesn’t show up in court or counter the claims.
“We’re all consumers, so at some point in our life, we all come across these issues,” said Vera Cedano of the Western New York Law Center, managing attorney for CLARO. “So taking this high moral ground and assuming people are not paying their bills is a little wrong.”
As part of the court-supported program, attorneys and law students will meet with troubled consumers who are defendants in lawsuits, offering them legal advice and assistance, and even going into court alongside them if necessary. They don’t negotiate with creditors, but they will help the consumers to prepare any court documents necessary to properly plead their case.
“It helps our court enormously when the litigants are prepared to present their case,” said Judge Thomas Amodeo, chief judge of Buffalo City Court. “People are coming in on a different playing level, where they can at least defend themselves in the courtroom.”
CLARO is the newest response to the mounting problem of consumer debt and how to ensure consumers are not victimized by unscrupulous or shoddy collectors, attorneys and process servers.
The program, led by Cedano and attorney Matthew Parham, was launched quietly last April and May but is being unveiled today at a news event.
Delinquent consumer debt has always been a big source of court cases, but the number has soared with the recession and rise of the debt-buying industry.
Consumer debt cases comprised 90 percent of the nearly 17,000 cases in Buffalo City Court in 2010. About 55 percent resulted in default judgements.
Most are filed by debt buyers, not the original creditors. These are firms that purchase old debt that has already been written off by lenders. They pay pennies on the dollar, and then aggressively try to recoup the money.
But there are also often mistakes or outdated information, so collectors may be pursuing the wrong person or seeking payment of debts that were paid off years or even decades ago. The collectors also often use tactics that can be intimidating, leaving consumers confused, scared and uncertain of their rights. And there are rampant problems with legal process servers not following through, so many consumers are unaware they are being sued.
“They don’t even come to court. A lot of them aren’t even aware that they have some rights to proceed and have the case litigated,” Amodeo said.
Yet often, just putting up a defense can make a huge difference, Parham said, as credit card companies and other creditors prefer to focus on easy cases with no opposition. Others languish or go away.
Even after a judgement, it’s not necessarily too late. Parham said.
If the consumer never knew of the lawsuit, was improperly served, received misleading information or advice, or has another legitimate reason for not responding, the judge can vacate the ruling.
Buffalo CLARO operates at Buffalo City Court and the Buffalo Federation of Neighborhood Centers’ Hope Center, in the Tri-Main Building, 2495 Main St. On Tuesdays, it holds walk-in clinics at Tri-Main from 3 to 5 p.m. On Wednesdays and Fridays, CLARO meets from 10 a.m. to noon in an empty Part 15 courtroom, on the seventh floor at 50 Delaware Ave.
Attorneys will review cases with consumers and help them prepare for court, and Parham will go before the judge with the defendant if necessary.
Consumers have also come to the sessions with general questions or just to get advice, which they then use to pursue a settlement on their own.
To date, CLARO has received 221 “visits,” including 128 at Tri-Main and 92 at City Court, and gone to about half a dozen court appearances.
CLARO will help anyone who is sued on consumer claims in the Eighth Judicial District, which comprises the eight-county area of Western New York.
If the claim is $15,000 or less, consumers who live or work in the city or one of the immediate suburbs could be sued in City Court, where the CLARO attorneys appear, but the program will also help defendants in Supreme Court for larger claims or consumers from other towns or villages.
The program also helps to track trends, which can point to new problems. “That’s what happened in New York City, and it woke me up to this as a practice area,” said Parham, a Phoenix native and New York University Law School graduate.
Besides Cedano, Parham and law center staff attorney Lauren Breen, who is also a UB law professor, the program includes 10 law students through the school’s Consumer Financial Advocacy Clinic, which Breen runs. Additionally, CLARO held a volunteer lawyer training for 25 attorneys on Dec. 13, and a few have signed up for sessions in exchange for continuing education credits. If necessary, more complicated matters are either referred back to the law center or to private attorneys.
“CLARO is one step in the right direction,” Amodeo said. “It seems to me that it’s working.”