In September of 1998 Penny was sued for eviction, but never received any court papers after being served the lawsuit. She didn’t go to court, simply moved out. For over 10 years, Penny never thought of the eviction — hearing absolutely nothing about the matter. That difficult time in her life was past.

Or so she thought. But something happened in December of 2008 which would change everything, as she explained in an e-mail.

“Today, I received a letter from my personnel department, saying they have a wage garnishment and will take $3,000 from my earnings to pay for the 10-year-old eviction judgment. I never even knew there was a judgment against me.”

“This really seems odd, as I just bought a house in May of 2008, and my credit report does not show any judgments,” she added.

“I am sure that if the 1998 judgment was on my credit report, I would never have qualified for the loan. What is also strange is that if I owed any rent 10 years ago, it was at most about $400 — but the judgment is more than $3,000. Is this legal? I thought there was some kind of a limit where they could not attach your wages or other property after a certain period of time.”

“I just don’t understand. How can my credit report be clean and yet this judgment pop up from out of nowhere? Can they really take that money from me? Is there anything I can do? If they take that much money out of my pay, I will not be able to make my house payments!”

The result of doing nothing — except moving out — is that the landlord appeared court, told the judge she owed him so much money, and, without Penny there, or her answer to the lawsuit on file, it was judgment for the landlord — judgment by default. That’s the danger in doing nothing after being served with a lawsuit. Yet, I can’t tell you how often I’ve heard, “Well, I called the landlord and told him I would move out, and he said, fine, the suit will be dismissed.” So, Penny “heard nothing in all of these years.” Shouldn’t she have gotten some kind of notice of a judgment? And, how do you get $3,000 out of a — maybe- — $400 past due rent charge? The answer is that a judgment in all probability was mailed to Penny, at her last known address as required by California law. We have to assume that was the same apartment. Did she put in a mail forwarding address? Was the judgment lost in the U.S. mail?

Once a money judgment is granted, it will “earn” interest at a yearly rate of 10 percent. Penny’s rental agreement might have had an attorney’s fee clause, in which several hundred dollars more would be tacked on. But all of this happened over 10 years ago — isn’t there some kind of “statute of limitations” on judgments? And what about her clean credit report?

The answer is that a judgment comes off your credit report after seven years — but it is still valid. That’s why it did not show up in May 2008.

A money judgment is good for 10 years in California and can be renewed. So the only way the landlord could garnish her wages is if the judgment had been properly renewed. This requires filing a renewal application with the court which must be served personally or by first-class mail at their last known address before actual collection efforts may legally be attempted.

Two days before the judgment was to expire, HS Collections Services, in Barstow, filed for the renewal, mailing the notice to Penny’s old address. A collector there admitted to me they knew she was not living at that address, but was in Corcoran. Smugly, he stated, “Sure, we pay for expensive skip-tracing services and knew she had been living in Corcoran for years. But we sent it to the apartment address. She should have put in a change of address!” (They only last six months.)

Also, I spoke with the owner of HS Collections who incredibly claimed to “not be familiar with what my collectors do.”

Despite the requirements of California law, the collection agency’s attorney told me, “We do not feel notice is required.”

I spoke with a number of collection agencies, all of whom research a debtor’s current address before filing for a renewal. “After 10 years, few people will be at the same address — the law requires we give them actual notice of what we are doing,” I was told by Hal Ennis, president of Southern California based Commercial Trade Bureau.

Penny has since worked out an agreement with HS Collections so that she can make her house payments. This was a story without a happy ending.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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What are your legal rights, and a car dealer’s obligation concerning vehicle registration?

Learning some of the possible legal consequences of driving a car that lacks current registration wasn’t what Joe had in mind when he purchased a 3 year-old Toyota 4-Runner for his nephew, Abe, who drove it for a local chauffeur service.

But there was a problem, as Joe explained:

“I bought in February from one of the largest Toyota dealers in our town. We were told that it was a trade-in from a customer who was unable to locate the vehicle’s registration or title, but not to worry, because if she didn’t bring it to them, they would apply to DMV for a replacement.

“They issued a temporary registration which was taped on the passenger inside windshield.”

The car had no license plates, “as they were personal to the customer, and were transferred to the new car she purchased.”

Abe immediately went to work and, as his employer had a contract with the two country clubs in town, “I earned a very good income, both as an hourly employee and from healthy tips,” he said.

Time Limits to Legally Drive with Temporary Registration

While time limits vary state-to-state, in general, buyers are able to drive the vehicle for a limited time on a dealer-issued temporary registration.

Joe’s credit union financed the purchase and required full-coverage insurance with them listed on the insurance policy as lienholder.

Despite repeated calls to the dealership, asking “Where is the car’s registration?” Joe was assured by the used car sales manager, “We are working on it, but our customer isn’t very cooperative, and in fact, the new car we sold her had to be repossessed due to checks bouncing and a failure to keep monthly insurance premiums current.”

What Abe and Joe are facing

Not having valid, current registration on a vehicle is nothing to sneeze at because:

(1) Police can stop and ticket the driver as unregistered vehicles may not be driven legally on public roads.

(2) An owner faces parking violations, towing and impounding if the vehicle is found on or operated on public roads.

(3) Fines can range from $250 to $3,000 or more, depending on the state and any prior violations.

(4) Penalties can include being arrested, doing time in jail and possible impounding the vehicle, points on a driver’s license, and suspension of the license.

(5) If auto insurance was issued under a temporary registration, coverage could lapse, depending upon the carrier. Driving a car without insurance is its own violation of law.

Be Patient

In their state, 90 days is the limit of validity for a dealer-issued registration.

Abe had been driving the 4-Runner since February. “But I just received notices from my employer and auto insurance, that unless the vehicle was registered in my name before the expiration of the temporary registration, insurance would be cancelled and I could not drive for the company. Every time I call, the used car sales manager just says, ‘Be patient, we are working on it.’

“But my family depends on that income. Can you help us?”

Not Who You Know But Who Knows You

It would have been easy to just send Abe and Joe down to their local DMV investigations office and file a complaint against the dealer who had the legal duty of providing them the registration.

But that would take time and Abe would be out of a job.

Instead, I set up a conference call with Joe, Abe, and the dealership, asking to be connected with the general manager but was transferred to his assistant.

When “Sheri” came on the line, I just said, “My name is Dennis Beaver and I am not representing your customers, but as a journalist, trying to help them,” and outlined the problem.

My next call was to the manager of Joe’s credit union.

“Joe, your customer, really needs your help. The Toyota dealer appears unable to produce registration on the 4-Runner you financed, and he will likely stop making any more payments. Would you please call the dealership and do what you can to help Joe?”

A Little Patience Was Called for Now

“So, what do we do now?” Both Abe and Joe asked.

“We wait for our phone to ring, and my prediction is no more than 5 minutes. You are about to see what is meant by the power of the press.

Three minutes later the Toyota general manager called:

“Mr. Beaver, please tell them to bring the car right over to us, now if possible. We will unwind the sale, refund all of their payments and insurance premiums they paid. And thanks for handling this the way you did.”

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

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One of the great “joys” that motorists across the United States face is an encounter with RoboCop, also known as the red light camera.

Who hasn’t just driven through an intersection, or turned right on a red, only to see a bright flash and wonder, “Was that for me? Am I going to get a ticket?”

“Dorris,” wrote, “I read one article advising to ignore a red light ticket in Los Angeles County, and then found another stating the exact opposite. What should drivers do, act on the ticket, or just ignore it?”

We spoke with Southern California Attorney Paul Denni who provided insight into what drivers need to know about these tickets.

“Red light camera tickets are being prosecuted in Orange County and Los Angeles County. Yes, I have heard rumors that these tickets are not being prosecuted in L.A. County, but I have associates who are in court daily defending these tickets in the Los Angeles Superior Courts. And there are cities within L.A. County who vigorously enforce these tickets,” he points out.

If I ignore the ticket what about my driver’s license?

We asked, “What happens to your driver’s license if you ignore the ticket?”

“The brief answer is ‘No, do not ignore the ticket,’ but this requires understanding what the ticket can and cannot do to your license, pocketbook, and how you can create a nightmare for yourself by doing the wrong thing. There are two situations drivers need to understand:

In the “do nothing” situation, a ticket arrives in the mail and if you do nothing from the start – absolutely nothing – it will not interfere with your driver’s license, not delay getting a license or a renewal as a lack of response is not reported to the DMV.

“Why do you stress doing absolutely nothing?” We asked Denni, and he answered our question with one of his own:

“Dennis, what is the one big difference between getting a red light camera ticket and being pulled over by a traffic officer? The answer is acceptance of notice.

“Before the officer hands you the ticket, you will sign a promise to appear in court, which proves you have actual notice of what to do. Not showing up in court becomes an FTA – a failure to appear – and under the Vehicle Code, this FTA authorizes the court to notify DMV and they will put a hold on your license.

“But a red light camera ticket is mailed, and there is no way of proving that you actually received it. Therefore your failure to act on the ticket is not reported to the DMV.

Do anything and your goose is cooked

When Paul Denni says to “do nothing” he’s serious, explaining that, “Once you appear in court at the arraignment and then fail to appear for the trial, in that case, they can hold your license up, and you could face a fine for the FTA. Why? Because now the court knows that you indeed received that ticket in the mail.”

Other attorneys, we spoke with went even further, pointing out that if you so much as write or call the court and ask for a continuance, you’ve cooked your goose for the same reasons. Now they know that you got the ticket.

GC Services wants your money

So, let’s say that you are driving somewhere in Los Angeles County and receive a red light camera ticket in the mail weeks later. You follow attorney Denni’s advice and do nothing, confident this nastiness will fade from memory. And then you receive a letter from GC Services, explaining that:

• You were mailed a red light camera ticket, and;

• Did not pay the fine or appear in court by the given date, and;

• Therefore, you owe $500 to Los Angeles or some other city.

Now what? “What if I don’t pay? How much trouble can they cause me? Can they report me to the credit bureaus?

“Consequences are that GC Services – which is a giant collection agency working for many cities across America – may hassle you. If you are concerned about it being on your credit bureau report, I would take care of it,” he stated, adding:

“It comes down to how much worry you have about the possible damage it could do you if it winds up on a credit report, but it’s not certain that it will.”

If our story has left your head spinning, that’s good. As the fines for traffic citations including red light camera tickets are so monstrously high in California, a free telephone consultation with a traffic ticket attorney just can’t hurt, and that’s our recommendation.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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If you listen to Sirius, XM Satellite, or just regular AM radio, you’ve probably heard ads aimed at listeners who are in financial trouble. Some suggest voodoo ways to get out of debt, pay off your house, car, and discover economic Nirvana in a matter of months.

Other ads describe the joys of establishing a Nevada corporation, getting “all the business credit you need with no personal liability.” If you believe the “Nevada Corporation” pitch and send them money, you do not need the services of a lawyer. A psychiatrist is a better choice.

A dose of reality can be found by using a search engine and typing the company name followed by the words rip off or scam. I only wonder why most of these ads are permitted to be carried by credible, national broadcasters, especially those for the Nevada “Asset Protection” group of con artists.

However, some companies which claim to reduce debt are legit and can deliver substantial money savings for a narrow group of folks who are in trouble. So, if you are in debt yourself, or know someone who is desperately trying to pay off their bills, today’s article should be a starting point for doing your own research into debt reduction.

CCR — Credit Card Relief of Indianapolis — is one of the debt relief companies who advertises nationally and was extremely helpful in explaining what they do and who can be helped. While You and the Law obviously can’t make any recommendations, from my research, this concept is certainly worth looking into for some people.

Debt relief is also known as debt settlement or debt negotiation. You’ll might also read or hear the term “debt pro-rator.” The basic idea is to work with unsecured creditors (such as credit card companies) and reduce both the principal and interest rate on substantial outstanding balances.

Indianapolis attorney Tomas P. Dakich explained debt relief this way:

“The concept of debt relief is to work out a way creditors will take less money than you actually owe. Most would rather have half a loaf than nothing at all. So, we help people avoid bankruptcy by reducing the total amount of what they owe unsecured creditors, most often for credit card debt.”

“With insurmountable debt — and high interest rates — you could be paying off bills for years and never get ahead. But many creditors will accept less than the full amount, just to get this account off of their books and to not run the risk of the debtor going bankrupt,” he added.

Attorney Dakich gave me a typical example of one of their clients, whom we will call Danny Debtor.

“Danny is employed, but deeply in debt. He is attempting to pay off $30,000 of credit card and other unsecured debt. He is unable to make all of these payments, and by the time he calls CCR or some other debt relief company, may have already been sued. Our job is to offer, perhaps $5,000 to settle $10,000 in debt. But it does not happen overnight, and could take up to three years,” he cautions.

The founder of Credit Card Relief is a former journalist for the Los Angeles Times, John Nichols.

“Whenever possible, our goal is to prevent clients from getting deeper into trouble. For example, they must keep their car and house payments current. We do not touch secured debt,” he points out.

“So, let’s say that one of your readers becomes a client of ours. Instead of continuing to make those regular unsecured payments, funds will be paid into our trust account, referred to as the Enrolled Member’s Trust. The client continues to pay into that trust account until a significant amount of money is accumulated and our lawyers pick up the phone and start negotiating with the various creditors, to make them a lump-sum settlement offer.”

An obvious question arose during my discussions with Mr. Nichols: “I’m running the risk of being sued if I stop making my regular payments, aren’t I?” His answer was encouraging for people in that precise situation.

“That is an extremely good question, and the logical answer would appear to be, yes, you’ll be sued right away. But that has not proven to be the case in today’s financial environment. About 20 percent of the time, credit card companies will file suit. But with so many people in financial trouble, it is not economically viable to litigate most unpaid accounts.”

“Certainly, if a case that we are handling goes to a collection agency or a suit is filed, our attorneys will immediately attempt to enter into settlement agreement,” he stressed.

“Our clients go through a qualification process. We verify that you have income, money to pay the debts and that you have not fraudulently run up debt. We keep tabs on your credit report and score. As your payments into the trust accumulate, our lawyers are in a position of settling credit card debt from 30 to 60 cents on the dollar — including our fees — resulting in a substantial savings,” Mr. Nichols concluded.

In speaking with a number of companies in the debt relief business, while fees vary, typically, a client will pay a monthly maintenance fee of around $50 and 25 perent settlement fee, based on the amount saved the client. Services include a local attorney, and possibly a national mediation law firm.

So, debt relief firms can help certain clients. However, in speaking with several bankruptcy attorneys, I was told the following:

“It is critical for the client to keep their side of the agreement. We see so many examples of clients who simply do not keep their end of the bargain, and stop making payments into the trust account,” one Los Angeles based bankruptcy attorney told me.

While there can be savings down the road, it is often outweighed by the “certainty of a ruined credit report, and the likelihood of being sued,” I was repeatedly told. Also, you need to be sure that you are dealing with a California licensed attorney, or a company with a surety bond, to protect the money you are paying them.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post Is there such a thing as credit card relief? appeared first on Dennis Beaver.

If you ask most lawyers if it’s a good idea to loan a friend money to buy a car, you’ll probably hear a line from Shakespeare: “Neither a borrower nor a lender be.”

The second part of that famous quote is less often heard: “For loan oft loses both itself and friend.” If good old Willie were alive today, given our fractured sense of morality, he would have added: “Lender, prepareth thyself to be sued by friend.”

30 months ago I loaned Sam money to buy a car

“About 30 months ago I loaned “Sam,” $2,400 to buy a car because he lost his job, then his vehicle and without transportation was unable to find employment. He agreed to pay $100 per month after he got a new job,” Tim’s email stated.

“Within a month he found employment, faithfully paying until his marriage to a young lady with two small children. Sam was having a hard time but promised he would eventually pay me. The balance at this point was $378.

“I have the pink slip to the car and am listed as legal owner. I’ve been cutting him some slack and do believe he will eventually pay the debt. But this is not the problem.”

Tim gets huge bill for towing, storage

A frequent consequence of marriage to a woman with children is that a lot of men lose all sense of responsibility to their friends. Sam lost his, as Tim explained:

“Something happened to the car and Sam left it parked on the street, where it was eventually towed away. As legal owner, I received a notice about the situation, called Sam, he said he was going to take care of it.”

So, did Tim verify that Sam would keep his word? Of course not.

“My wife and I then went on an Alaskan Cruise and when we got home there was a bill in my mailbox for $1500, a $200 towing fee plus $65 per day storage charge! I learned that after 30 days the car could be sold and I would then be sued for the balance owed.“

A warning to others

You and the Law was not present when Tim and Sam had their “Let’s get real” discussion, but are informed that, Sam ‘suggested’ the best thing to do at this point was to give the tow company the title and negotiate the storage fees, which is what I did, with amazing results!”

Tim was lucky. The owner of the towing company, “Was very accommodating and said he would waive the storage fees if I would provide the signed pink slip, the keys and the $200 tow fee. I couldn’t comply fast enough, walking away feeling like I had dodged a bullet. I shook his hand and thanked him. I had the feeling that doesn’t happen too often in his business.”

“I am writing you so that others will understand the consequences of being a legal owner of an automobile. It could be very expensive,” he stated, happy with result and not realizing that he was standing in quicksand.

“Forced to lose the car”

I phoned Tim. As it turns out, I had met him when visiting Hanford for its Thursday Night Marketplace, which is a combination Farmers Market and Street fair. I come up several times during the spring and summer Marketplaces season to meet readers at the Sentinel’s booth.

“I’ll wager that you and Sam attend the same church, right?” I asked. “Yes, we do,” he replied. Regardless of the flavor, all churches are magnets for hypocrites and cons, believing themselves ‘forgiven’ then immediately repeating their same behavior.

“Yeah, that’s Sam,” Tim admitted.

“Was Sam eager and truly willing to lose the car, or do you think he caved in feeling pressured, forced to, I asked.
“Of course he felt pressured!! I was sick and tired of his irresponsibility and what it cost me,” Tim admitted.

“I will also bet that, because Sam attends your church and you trusted him, and felt there was no need for a written agreement dealing with your right to repo the car and sell it if Sam quit making payments.”

“You’re right again,” Tim admitted, slowly sinking into a quicksand of his own creation, beginning to get my drift.
“Could he sue us?” Tim and his wife now on the line, asked.

What could Tim be sued for?

“While I think it would be immoral – as Sam created the problem – he could go to small claims court and sue Tim for breach of contract and the civil tort of Conversion. This is wrongfully – under duress – taking property from another person,” Hanford attorney Bob Zumwalt commented.

If you were the judge, how would you decide the case?

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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October 31, 2015 • By Dennis Beaver

Ever wondered what the consequences can be when a business runs a check on your credit, but without your approval? Timothy, who reads our column in the Eureka Times-Standard, send the following email:

“In September of 2014, I visited the Folsom Auto Mall, wanting to see if my credit was adequate for a loan at a decent rate. At one of the dealerships, I gave them written authorization to run my credit, which they did, but, as I had some earlier problems, the score was too low for a loan at payment amount I could afford.

“I returned to the dealership this past September, looked around, talked with the same salesman, but never got beyond just looking and talking price, but nothing more. I did not submit a credit application, nor did I give them permission to run my credit.

“Two days later, I received a text from an identity-theft service I subscribe to stating that my credit had indeed been run and that a number of lending intuitions received inquires from the dealership about a possible loan.

“This can’t be legal! What are someone’s rights when this happens? Could it have harmed me? Are there any penalties for what they did?”

It is illegal to run a credit check without your permission

“While there are certain limited exceptions — such as a debt collector taking a valid assignment of a debt — in a retail context, such as shopping for a car, a person does not have authority to run someone else’s credit unless there is express permission to do so,” Los Angeles Attorney Robert Brennan told You and the Law.

He is regarded as one of the nations most accomplished lawyers handling violations of the Federal Fair Credit Reporting Act and specifically, cases just like this.

“Your Eureka reader gave the dealership written permission to run his credit once. They cannot legally run it whenever he comes back onto the lot, and isn’t entering into a transactions, or signing a sales contract,” he points out.

And, as you’ll see in a moment, running Timothy’s credit without his express permission can damage his credit score and wind up being be very costly to the dealership.

Does running a credit check harm your credit?

We asked Brennan this question: “Timothy did not actually buy a car or take on any more debt, so how is he harmed when someone just looks at his credit report?”

“I’m often asked that question,” he replied. “The technical term used by the industry is ‘pulling a credit report,’ and there are two different types, a hard pull and a soft pull:

• “When you apply for credit — a loan to buy a car, a mortgage to buy a house or a credit card — this is a hard pull, and can have very adverse consequences. A soft pull — checking your own credit, or a review by an existing creditor — has no negative impact.
• A hard pull will damage a credit score as it signifies to other lenders that you are looking for credit. Generally, it will lower your credit score from 10 to 20 points. In the post-mortgage meltdown, lenders have become wary of extending credit in general, but, if you are below 670 it is all that more difficult to obtain credit.
• With less than a good credit score, today lenders see a hard pull and often think, ‘This person is out shopping for credit. Maybe they are not financially stable, but in any event, are increasing the risk of default, so, let’s not make the loan.’
• The harm to Timothy is that when he really does attempt to finance a car purchase, it will have looked to some other lender that he tried earlier and was refused. So, why should they give him the loan when another company said no? Or, if they do, it will be at a higher interest rate.”

This is a violation of the Fair Credit Reporting Act

“Timothy has described a violation of the Fair Credit Reporting Act which could lead to a lawsuit with substantial value. But first, he must send a certified dispute letter–never online-to the three credit bureaus, explaining that the pull was done without his authorization, and politely insist that the inquiry be removed from his file. Sometimes they will.

“If they don’t, they and the dealership can become defendants in a 1681b lawsuit under the impermissible access section of the Fair Credit Reporting Act,” Brennan observes, adding, “Minimum penalties are $1,000, but these cases can have significant value.”

Next time: We’ll tell you just how much this could wind up costing the dealership and also look at the risks of hiring a credit repair service.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post They ran his credit without approval appeared first on Dennis Beaver.

Mr. Beaver, we desperately need your advice and have been reading your column for over 10 years.

The problem is that months ago we loaned our 27 year old son $50,000 for a real estate investment. He had a partner and they agreed to use the money as down payment on a rental home, but instead of it being purchased in their names together, it wound up in the sole name of his partner’s wife. Now those two are going through a divorce, and we are afraid of losing our money!

This is retirement money and we can’t afford to lose it! Our son is very intelligent, but had his share of business troubles. We just wanted to be supportive and help him, certain he would protect our investment.

What should we do? Thelma and Luke.

Their son the genius

When that e-mail came in, I called my readers. They are both in their 60s, retired and not well-off. They worked hard all their lives, saving what they now live off of, plus Social Security. Their son, Timothy, was described as “brilliant in math and computers when in junior high school. We thought then and still do that he is truly gifted, even though he never attended college. But soon after high school, he began a small company with the financial help of a lot of family members,” they said.

Two years later, he was $100,000 in debt, filing bankruptcy, leaving employees and bills unpaid.

“He is a nice boy, but he seems to know it all, and we were, I am sorry to admit, never really strong as parents,” Thelma admitted, suggesting that I talk with their son. I jumped at the chance, curious about just how brilliant he was, and more important, did he care about the possibility of losing $50,000?

“We had to cheat”

Tim explained that he and an old high school friend were “partners” in a real estate “flipping” venture, but neither were licensed agents.

“We bought and flipped homes, and had to get a $50,000 line of credit from my parents, since we could not qualify for any more loans. My partner’s wife had excellent credit. I admit we did exaggerate on the loan application materials just a bit, stating that she planned to live in the house, to get her a better interest rate,” he told me.

Tim seemed unconcerned that he had participated in what was clearly loan fraud.

The loan on the house was in the wife’s name, as was the title. Neither Tim nor his partner had any official interest in the property. “We thought things were going to be great. . .selling the house for a profit. But then they filed for divorce, the market began to slide, and now she says that the house is hers!” he complained. I asked him to tell me about this “partnership” of theirs. “Oh, we really trust each other,” he boasted.

“You do, eh? Well if it is such a great relationship built on trust, why did your pal not tell you about the marriage being in so much trouble?” Tim, it turns out, was told about the marital problems, but “since they got back together,” he thought everything was “just fine.”

Apparently Tim was standing behind the door when common sense was handed out.

Is the money lost?

My readers have two problems, one a lawyer can most likely solve, the other may never be resolved. I ran the facts of this story by attorney Ronald Jones of the Kahn, Soares & Conway law firm in Hanford. Here is Ron’s advice:

“Your readers need to immediately see an attorney who should in turn contact the wife’s lawyer. Urge that she do the right thing, cooperate, and if neither the wife nor her husband have any real money invested, sign the home over to the retired couple. If that does happen, they will have to refinance the house, or they might all just agree to sell it immediately, with the $50,000 being paid to your readers, and the balance divided by the couple and Tim.”

Ron added: “But if she will not, your readers have little choice. A lawsuit would need to be filed against both wife and partner, at the very least, for declaratory relief, quiet title, possibly fraud as well.”

If the only choice is a lawsuit, then it would be filed in the county recorder’s office where the land is located. They are looking at close to a retainer of $2,000 if they go that route, and hopefully the partner and wife will not have the financial ability of battling it out in court. But if it really went to trial, look at over $25,000 in attorney fees — and to possible punitive damages being awarded, Ron said.

Fail to be a parent — pay for it later

After several lengthy conversations with my readers and their son, it became clear this was not a new problem. They honestly believed him to be some kind of a creative genius. He didn’t need college because, as a kid, he knew “more about computers than any of us.” He was a 27 year old going on about 12.

Ethics are often compromised by greed and short-sightedness. Just think of it, what kind of a son takes $50,000 from his parents — after they already lost at least that much in the past — now putting them at risk in their retirement years?

The question I cannot answer is an obvious one: Even if my readers are successful in obtaining a refund of their loan, will they repeat their mistakes? Will Tim see them as the “bank” of mom and dad, attempting to be “supportive” all the way into poverty?

Attorney Jones had a final observation on this case: “So many people confused a rising real estate market with personal brilliance, looking for one more deal, going deeper and deeper into debt. They were victims of their own greed, expecting house prices to continue climbing.”

They attended seminars, some got a real estate license. But many of them lost their shirts, and along the way they hurt their families deeply.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post Too late to start being a parent appeared first on Dennis Beaver.

These days the term due diligence is all over the news. Basically, it means looking into someone’s background before handing them your hard-earned money as an investment.

Due diligence also takes place when we visit our local bank and apply for a loan. A relatively small loan — auto for example — might only require a credit check. But what if it’s a million dollars or so? Should the bank dig deeper than simply looking at a credit report? If so, how much deeper? That is the situation Dr. “R” finds herself in today, sending You and the Law this e-mail:

“I am a dentist and have applied for a substantial construction loan from my bank, which has offices throughout Northern California. We are planning on greatly expanding the office, adding dentists and support personnel.

“I understand the need for a thorough credit check on me, but my loan officer has asked that we provide the names of employees who have anything to do with the financial end of the practice. The bank intends to conduct detailed background checks on these employees. Obviously it’s required for the person borrowing the money, but employees as well? Is this commonly done? What would you do if you were in my shoes? Should I tell the bank to forget it and go to another lender?”

In researching an answer, I spoke with loan officers at a number of community banks who agreed to talk on the condition of keeping both their names and that of their institutions confidential. All agreed that background checks — and how deep to probe — is a controversial issue in today’s economy and admitted to occasionally hearing raised voices in loan committee over this very matter.

“You would be surprised at the relatively shallow level of investigation generally performed,” most acknowledged. “It is important to understand the reasons we do not generally dig deeper,” another admitted, but had me swear that I would never reveal his name.

“You have my word on it. So, why don’t you do a more thorough background check?” His answer floored me.

“Because we know that if you look much beyond a credit report, at times you’ll find things about your customer or some of their employees which would scare the pants off of you. This is a huge problem with, interestingly enough, physicians from some third-world countries who have a nasty habit of trying to squeak out of agreements they make, after accepting the benefit from the other side. But, remember, we are in the business of making loans, so it becomes a built-in conflict of interest. No loans, less income for the bank and a reduced bonus for the loan officers. So there is a not-so-subtle message from management at some institutions to just not dig too closely and rely on a credit report alone.”

Gary Maples, who teaches commercial lending at the Graduate School of Banking at Madison, Wis. — himself a former bank president — feels the bank in my reader’s case has legitimate concerns, but might be going about this in the wrong way.

“The bank’s concerns are real. However, the manner in which they are presenting them is over bearing. I suspect that in the not too distant past the bank took a loss on a customer who had an internal fraud. Hence, their board and management have adopted a hard-nosed position,” he told me.

“The better approach is to inquire as to what background checks the dental office is doing on financial employees, suggest that it be done as a matter of good, prudent business practice, even offering to help pay for it. But there is no doubt, we are seeing a great increase of internal fraud across the country, a disturbing sign of the time,” he concluded.

Even if you aren’t applying for a million dollar loan, what if a company needs to hire a temporary receptionist or billing/accounts receivable person? How deep should an employer inquire, in today’s economy?

“Just who is that person you’re about to hire? Who is she really?” asks Southern California based private investigator Riley Parker of Parker and Associates. His firm does nationwide due diligence, pre-employment background checks.

It was a question Dr. “G” had been told to ask by his attorney, before hiring a medical assistant. “You can’t rely on the job application. People sometimes lie, doctor,” his lawyer reminded him, after the young lady physically attacked a co-worker, and then promptly went outside and started to bang her head against the office wall. No joke — she really did.

Had he looked beyond the application, and checked with earlier employers, or paid less than $150 for a pre-employment background investigation, he would have found the lady to have been a fit candidate for the rubber room.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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November 7, 2015 • By Dennis Beaver

It’s a fair bet that just about anyone who has issues with their credit history/score, has thought about using one of the many “credit repair services” which advertise using glowing testimonials.

“But they can cause you far more trouble than most people realize,” Los Angeles-based attorney Robert Brennan tells You and the Law. He is recognized as one of the nation’s leading experts in violations of the Fair Credit Reporting Act.

In a moment, we’ll explain why, but first, let’s finish last week’s story about Timothy, our Eureka reader visited the Folsom Auto Mall in September of 2014 wanting to buy a new car and needed financing. He filled out a credit application, they ran a credit check, but his score was too low for a manageable interest rate.

About year later, returning to the dealership, he checked the price, but a new credit application was not filled out, nor was there any discussion of finding better financing.

Shortly thereafter, Timothy’s identify protection service texts that his credit report was “pulled” by the dealership and sent to a number of lenders.

“Obtaining a credit report without permission is known as ‘Impermissible Access,’ and is a violation of the Federal Fair Credit Reporting Act with a statutory penalty of $1,000. However, these cases are often resolved for several thousands of dollars, in addition to the payment of attorney fees by the party acting wrongfully,” Brennan observes.

A credit score is lowered 10 to 20 points when a report is “pulled,” as this tells other lenders that you are shopping for credit and may become less able to repay existing or new loans. If done without your express authorization, as soon as you know, act quickly, and:

• Via certified mail only, tell the business and the three reporting agencies this was done without your permission and to please immediately remove the inquiries from your file.

“If they refuse to,” Brennan recommends “contacting an attorney familiar with Fair Credit Reporting law, as ‘1681b’ lawsuits can have significant value for invasion of privacy and damage to credit reputation.”

And just how much are such suits worth?

“Willful damage to your credit is real. Either you cannot get a loan, or you’ll pay much more in interest over the long run. With solid facts, a clear violation of the law — as appears to be your reader’s situation — could be worth close to $30,000, and attorney fees are also reimbursed.”

Be leery of credit-repair services

The Financial Crash of 2008 was very good to one industry, doubling in size: Credit Repair Companies, of which there are now close to 7,000 across the country, according to the Federal Trade Commission, which cautions, “Many make highly questionable claims about the results they can achieve.”

Brennan agrees. “While there are some legitimate credit repair companies who have been in business for many years, still, you must be leery of the claims which are made about cleaning up bad credit.

“More importantly, we have seen scam and incompetently run credit repair services do real harm to people who had legitimate errors on their credit report, but the only way these people could challenge the incorrect entries was by going to court.”

Challenge everything

“A common example is a the person who has 10 items of good credit, two items of bad credit and one item that does not belong to them. A legitimate credit repair company should dispute the one item which does not belong to them, or if there is something false about the item of bad credit, that one as well.

“But scam companies run a dispute letter on every single trade line!”

“They are trying to overwhelm the credit bureaus with a frivolous dispute, because if the dispute goes unanswered for 30 days after being submitted, anything disputed is supposed to come off the credit report.

“What they are really doing is setting up the consumer for being labeled a 1681 frivolous disputant – a person who files frivolous disputes. After that, even someone with legitimate errors on a credit report will have a terribly difficult time in cleaning up the report and may need to file suit in court. This happens often.

“Valid credit repair isn’t something that you can ‘shotgun.’ It is not something where you can go in quickly and not worry about it. You have go about this methodically, carefully and with attention to detail. Unfortunately, that’s not how the majority of these companies proceed,” he concludes.

Brennan shared with us his advice on staying out of credit trouble, and that will be a future article.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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