Pocket service is lawyer slang for the procedural rule in Minnesota that a lawsuit commences on service of the summons and complaint. This is different from the rule in almost all other states and the federal courts, where a lawsuit begins with filing of the summons and complaint.

When coupled with Minnesota’s rules on pre-judgment garnishment, this can cause serious problems. A defendant who was never properly served, for example, can end up getting money taken from their bank account without any notice or any chance to respond to the lawsuit.

The moral: if you discover or are even suspicious you may be named in a lawsuit, look into it. And call a lawyer.

Advantages and disadvantages

Pocket service saves money, since the plaintiff doesn’t have to pay a filing fee when it starts the lawsuit. This is good for consumers, at first glance. However, it also saves money for debt collectors, who are starting hundreds of lawsuits at a time, and thousands every month. Sure, it may save one consumer a few hundred dollars, but it saves debt collectors hundreds of thousands of dollars every month—money that would otherwise be paid to the courts.

Also, consumers may have a better chance at a fair hearing in court than out of it. In effect, pocket service is a far more powerful tool for debt collectors than for consumers. On balance, I would not be a bit sad to see pocket service disappear in Minnesota.

Pre-judgment garnishment

Worse, in Minnesota, the plaintiff will be able to garnish your wages and bank accounts without even getting a judgment or filing the lawsuit with the court. They can serve a garnishment summons on your bank or employer, wait to see if they capture any money, and only then file the lawsuit and incur the filing fee. Scary stuff.

Always answer the summons and complaint

Much of the advice on the internet is that if the court has no record of a lawsuit, you do not have to respond to it. Not true in Minnesota and several other states with pocket service laws. If you do not respond, the plaintiff will be able to get a default judgment—meaning you lose.

If you find out you are named in a lawsuit, however you find out, make sure you get involved, if only to argue that you were never properly served. If you ignore the lawsuit, you may end up losing money without ever having a chance to defend yourself.

(photo: puddy77)

Minnesota, like most states, has hundreds of divorce lawyers. Picking the best divorce lawyer for you can be intimidating and frustrating. You can increase your chances of finding a good match with a little preparation and a few good questions.

Figuring out who to call

Start by asking people you know and trust for a referral. If they were happy with their lawyer, you may be, too. If you cannot get a referral—and even if you do—check with your local bar association, too. Most bar associations keep lawyer referral list, and it is best to visit more than one lawyer before you decide to hire someone.

Know thyself

Do you need a lawyer to return your calls 24/7, or are you low maintenance? Will you and your spouse be able to agree on most or all things, or will this be a long, hard-fought divorce? Do you want an aggressive, hard-driving litigator, or a polite, collaborative advocate?

If you know your goals, you can ask smarter questions of the lawyers  you meet.

Know thy lawyer

Especially if you need extra attention, make sure you ask whether the lawyer charges extra for phone calls outside of regular working hours. If you think you can manage to have a relatively peaceful divorce, seek out a lawyer who concentrates on collaborative divorce. If you want an aggressive lawyer, ask him or her how many cases wind up in trial.

Additionally, do a little background research. What comes up with you Google the lawyer’s name? Look up the attorney’s disciplinary history, and ask the lawyer for references from former clients.

Make sure you know what the lawyer bills per hour, and ask how the lawyer will track his or her time. You may also ask for a flat fee, instead of an hourly fee model. Some lawyers will be willing to set a flat fee; others will not.

Don’ts

Do not just hire the cheapest lawyer just because he or she is the cheapest. You will not value their time, and they may not value your business. You should hire the right lawyer for you, not the cheapest lawyer in the Yellow Pages.

Most importantly, do not hide anything from your lawyer. Your lawyer will not be able to help you effectively if you do.

(photo: kevindooley)

Minnesota Representative Joe Mullery and Senator Ron Latz recently introduced a bill that would prevent debt buyers from filing a lawsuit without the ability to prove they have the right to collect a debt.

Why the need for the rule? Debt buyers and collectors file tens of thousands of lawsuits against Minnesota consumers every year, and probably serve at least as many that never get filed. But debt buyers should lose most of their lawsuits, if challenged.

Under current Minnesota law, debt buyers can get a judgment without any proof at all, if the defendant does not understand complicated court rules and Minnesota law. If the defendant consumer does not serve a written, formal answer in time, the debt collector can simply ask a court administrator to enter a default judgment. No judge ever sees the case.

The bill will require a debt buyer to provide documentation that a consumer owes a debt and that it has the right to collect a debt before it can sue. Debt buyers would also have to prove that the debt is not barred by the statute of limitations. They would have to provide an itemized accounting of the amount owed. Most importantly, the bill would give consumers the right to sue if a debt buyer does not follow the law.

The opposition arguments are predictable, but laughable. A representative of the debt collectors’ trade group, ACA International, said “this could have very significant implications as to the flow of credit to consumers.” This bill would force debt buyers to bring only legitimate collection lawsuits, and would stop them from bringing lawsuits where they cannot prove their case.

It sounds like the ACA is saying that creditors base their lending decisions on debt buyers’ ability to bring bad lawsuits.

Bill helps consumers against debt buyers | Star Tribune

Getting called or served with a lawsuit by a collector is a pain, at best. You can help yourself deal with debt collection with free information and tools online, but not everything you find will actually help. Here is a selection of resources that will:

• If you are contacted or sued by a debt collector, use these form letters, pleadings, guides, and reference materials to learn how to record your phone calls and respond appropriately;
• Debt collection cheatsheet: what collectors can and cannot do;
• Help dealing with a case of debt collection and mistaken identity;
• Follow these guidelines for negotiating with a debt collector; and
• Avoid these mistakes when dealing with a debt collection lawsuit.

Finally, you can get debt collection help from a lawyer. Most consumer rights lawyers will give you a free case evaluation, and may be able to represent you on contingency, so that you pay nothing unless the collector pays you.

According to the FDIC, over 700 banks are currently at risk of going under, a huge jump over the last three years, and a bit of a shocker given the size of the federal stimulus. The FDIC has already shuttered 20 banks this year, and there is no sign that things will improve in the coming months.

Banks at risk of going bust tops 700 | CNN Money

Minnesota Attorney General (AG) Lori Swanson has sued 6 debt settlement companies on the grounds they were not licensed to do business in Minnesota and overcharged consumers by hundreds of thousands of dollars. She commented:

“People who are swimming in debt are often desperate for a life preserver, but they should know that debt settlement companies usually just anchor them down with even more financial problems . . .”

While it is unclear how the debt settlement companies in the suit operate, many debt settlement companies require monthly payments from consumers. Part of that monthly payment, however, goes towards paying the debt settlement company, and not paying off the actual debt. In addition, many debt settlement companies only make the minimum payments on accounts, and ultimately leave consumers in worse shape at the end of their contract.

(photo: quaziefoto)

When an out-of-town family member dies, you only have a few days to hop on a plane for the funeral. Thus, the idea of a bereavement fare, which—in theory—enables grieving family members to pay their last respect without paying airlines’ extremely high last-minute fares.

A bereavement fare is usually a discount off the “full fare,” but as Consumerist’s Chris Morran explains, nobody ever pays full fare these days, so bereavement fares are rarely a good deal:

The lesson here is: Don’t always assume a bereavement fare is going to be the least expensive way to reach a family member’s funeral or in the case of a medical emergency. So be sure when booking the flight to make sure you’re purchasing the ticket that best suits your needs.

Why Is Delta’s “Bereavement Fare” $290 More Than A Regular One? | Consumerist

(photo: Olastuen)

From the Federal Trade Commission:

If you’re looking for a job, you may see ads for firms that promise results. Many of these firms may be legitimate and helpful, but others may misrepresent their services, promote out-dated or fictitious job offerings, or charge high fees in advance for services that may not lead to a job.

Job-Hunting/Job Scams | FTC

Wells Fargo has bowed to angry internet users and has agreed to refund and waive 3% transaction fees charged on certain donations to Haiti.

College student Heather Lynn was angered by Wells Fargo’s insistence on charging a 3% foreign transaction fee on certain types of donations to Haiti. Lynn created a Facebook page called Wachovia=Fail, which garnered thousands of users. More importantly, the page got Wells Fargo’s attention, and prompted them to react accordingly:

You spoke and we listened and appreciate the feedback. This was a complicated issue on our end to address, so I’m sorry for the time it took for us to get back to you. It was never our intention to make money from fees charged on foreign transactions to help the victims of the earthquake in Haiti.

Just wondering, what exactly was their intention? And why did it take an angry group of Facebook users for Wells Fargo to realize something was not right?

(photo: Rail Life)