Debt buyer business model

Sunday, July 6th, 2014


The plaintiffs in many collection lawsuits cannot prove anything. In many cases, the plaintiffs are debt buyers that pay five cents on the dollar or less for the right to collect debts. If you never dealt with the company that is suing you, it is probably a debt buyer.

If you are sued by a debt buyer, the question is not whether you might owe money to someone, but whether you owe the amount claimed to the debt buyer suing you. Never assume that you owe someone money just because they are demanding money from you. We have had cases where the same debt was supposedly sold to two different buyers, or where a debt was settled and the “balance” then sold. In other cases, the amount claimed is inflated.

It is important that you do not default (fail to appear in court), and that you vacate any defaults that exist right away. Debt buyers count on your defaulting in order to win. Once they have a default judgment, they will try to garnish your wages and bank accounts. As a federal court recently pointed out:

The Fair Debt Collection Practices Act seeks “to eliminate abusive debt collection practices by debt collectors.” 15 U.S.C. § 1692(e) . . . Consumer debts covered by the Act are usually too small to justify a lawsuit unless the suit is promptly defaulted, thereby enabling the debt collector to obtain—without incurring significant litigation cost—a judgment that it can use to garnish the debtor’s wages. Given “the costs of litigation and the difficulties establishing the debt, when a debt collector cannot get payment through phone calls and letters and it has to go to court, the debt collector will often rely on default judgments as the last resort. . . .

Suesz v. Med-1 Solutions, LLC, —F3d —-, 2014 WL 2964771, *2 (7th Cir. July 2, 2014) (en banc) (emphasis added).

It is worth your while to show up and demand your day in court.



Sunday, July 6th, 2014

Please contact us if you are being sued by a National Collegiate Student Loan Trust in Illinois.


Sunday, July 6th, 2014

Please contact us if JRSI is attempting to collect a debt from you in Illinois.


Sunday, July 6th, 2014

Please contact us if HBLC is trying to collect a debt from you in Illinois.

Resurgence Capital

Sunday, July 6th, 2014

Please contact us if Resurgence Capital  is attempting to collect a debt from you in Illinois.

Use of social media by debt collectors

Sunday, July 6th, 2014

Where collection actions may be filed — Seventh Circuit decision in Med-1 case

Thursday, July 3rd, 2014

The Fair Debt Collection Practices Act, 15 U.S.C. §1692i (“FDCPA”), requires that legal actions to collect consumer debts be filed in the “judicial district or similar legal entity” (a) where the consumer resides when the legal action is taken, (b) where the consumer signed the contract on which the action is based, or (c) in the case of actions to enforce a security interest in real estate (such as a mortgage) where the real estate is located.

The Seventh Circuit Court of Appeals (covering Illinois, Indiana and Wisconsin) has held that the phrase “judicial district or similar legal entity” means “the smallest geographic area that is relevant for determining venue in the court system in which the case is filed.” Suesz v. Med-1 Solutions, LLC, No. 13-1821, 2014 WL 2964771  (7th Cir. July 2, 2014) (en banc).

The case involved the Marion County, Indiana Township Small Claims Courts, and the court held that the 9 townships are each a “judicial district” for purposes of the FDCPA. Therefore, a small claims lawsuit had to filed in the township where the consumer resided when the lawsuit was filed, or where the consumer signed the contract sued on.

The court overruled a prior case allowing collection lawsuits to be filed anywhere in Cook County, Illinois, without regard to the fact that the Municipal Department of the Circuit Court of Cook County, which hears most such cases, is divided into six geographic districts.

Please contact us if you are subjected to legal action (original lawsuits, citations, garnishments) in a Cook County, Illinois,  Municipal District   other than the District in which you reside when the legal action is taken or signed a contract.

The First District is the City of Chicago.

The Second District includes  Deerfield, Des Plaines, Evanston, Glencoe, Glenview, Golf, Kenilworth, Lincolnwood, Morton Grove, Niles, Northbrook, Northfield, Park Ridge, Skokie, Wilmette, and Winnetka.

The Third District includes Arlington Heights, Barrington, Barrington Hills, Bartlett, Bensenville, Buffalo Grove, Elgin, Elk Grove Village, Hanover Park, Harwood Heights, Hoffman Estates, Inverness, Kildeer, Mount Prospect, Norridge, Palatine, Prospect Heights, Rolling Meadows, Roselle, Rosemont, Schaumburg, Schiller Park, South Barrington, Streamwood, and Wheeling.

The Fourth District is  Bellwood, Berkeley, Berwyn, Broadview, Brookfield, Cicero,  Elmwood Park, Forest Park, Franklin Park, Hillside, LaGrange Park, Maywood,  Melrose Park, Northlake, North Riverside, Oak Park,  River Forest, River Grove, River Forest, Riverside, Stone Park,  and Westchester.

The Fifth District includes Alsip, Bedford Park, Bridgeview, Burbank, Burr Ridge, Chicago Ridge, Countryside, Crestwood, Evergreen Park, Forest View, Hickory Hills, Hinsdale, Hodgkins, Hometown, Indian Head Park, Justice, LaGrange, Lemont, Lyons, Merrionette Park, Metra, McCook, Morton College, Oak Forest, Oak Lawn, Orland Hills, Orland Park, Palos Heights, Palos Hills, Palos Park, Stickney, Summit, Tinley Park, Western Springs, West Haven, Willow Springs, and Worth.

The Sixth District includes Blue Island, Burnham, Calumet City, Calumet Park, Chicago Heights, Country Club Hills, Crete, Dixmoor, Dolton, East Hazel Crest, Flossmoor, Ford Heights, Glenwood, Harvey, Hazel Crest, Homewood, Lansing, Lynwood, Markham, Matteson, Midlothian, Olympia Fields, Park Forest, Phoenix, Posen, Richton Park, Riverdale, Robbins, Sauk Village, South Chicago Heights, South Holland, Steger, and Thornton.

Also,  please contact us if you are subjected to legal action (original lawsuits, proceedings supplemental)  in a  Marion County, Indiana Township Small Claims Court  other than the one for the  Township in which you reside when the legal action is taken or signed a contract.  The following is a map of the Marion County Townships:


Condominium fees

Thursday, July 3rd, 2014

Please contact us if you have purchased a condominium from a mortgage company or at a judicial sale and you have been charged fees by the condominium association or management company.

Enforcement action against Cole Taylor Bank

Tuesday, July 1st, 2014

The following is a press release issued by the Federal Reserve System concerning an action by it and the state of Illinois against Cole Taylor Bank with respect to student lending practices:


Release Date: July 1, 2014


The Federal Reserve Board on Tuesday issued a consent order to cease and desist and a civil money penalty assessment of $3,510,000 against Cole Taylor Bank of Chicago, Illinois. The order addresses the participation by the bank and its agent, Higher One, Inc. of New Haven, Connecticut (Higher One), in deceptive practices in violation of section 5 of the Federal Trade Commission Act.


Higher One is a nonbank entity that provides institutions of higher education with financial aid refund disbursement services for students. Higher One typically offers students three methods of receiving their financial aid refund: (1) paper check; (2) ACH transfer to an existing bank account; or (3) direct deposit to the Higher One deposit account and debit card product known as the “OneAccount.” Because Higher One is not a bank, it must partner with banks to offer the OneAccount. From May 4, 2012 to August 14, 2013, Cole Taylor served as one of the banks providing deposit accounts in connection with the OneAccount.


The actions addressed in this order involve the following deceptive practices by Higher One, under Cole Taylor’s oversight, that, at various points in the financial aid refund selection process, misled students about the OneAccount.

  • The omission of material information about how students could get their financial aid refund without having to open a OneAccount;
  • The omission of material information about the fees, features, and limitations of the OneAccount product, which may have made it more difficult for students to make fully informed decisions prior to selecting the method for financial aid refund disbursement;
  • The omission of material information about the locations of ATMs where students could access their OneAccount without cost and the hours of availability of those ATMs; and
  • The prominent display of the school logo, which may have erroneously implied that the school endorsed the OneAccount product.

Higher One is taking material corrective action to address these practices in its current disclosures to students. However, appropriate remedial actions against Higher One, including the payment of restitution for its past practices, are currently being pursued. In addition to the civil money penalty, the order against Cole Taylor Bank also requires it to assume backup liability for any restitution to students that Higher One is required to pay in a Federal Reserve enforcement action in the event that Higher One cannot pay the restitution amounts. Actions are also being pursued against another state member bank that has a similar arrangement with Higher One relating to the OneAccounts.

Spousal liability

Tuesday, July 1st, 2014

Question: Can a mortgage lender go after my spouse for a loan I co-signed prior to our marriage?   I co-signed on a mortgage with my ex-husband. I want to re-marry but don’t want my new husband to get financially stuck if my ex defaults on the mortgage. My ex can’t financially re-finance on his own right now. How can I protect my new husband from the bank going after his accounts if my ex defaults?
Answer:   Your new husband does not have any liability on the loan.  If you signed the note (as opposed to the mortgage),and  your ex defaults, the bank may be able to get a personal judgment against you.   If all you signed was the mortgage, you have no personal liability; only your interest in the property is at risk.

Assuming  you signed the note, you and your new husband should maintain separate accounts, at least with respect to property he owned prior to marriage, and probably with respect to all property,  in order to protect him.  Under Illinois law,  the contents of a joint account are presumptively 100% the property of either account holder.  Any account holder may file a motion with the court supported by evidence showing who actually owns the contents of the account.  The account holders have the burden of proof.