On a recent day, Community Legal Aid Associate Director Steven McGarrity stood in an Akron Municipal courtroom.
But he wasn’t defending a client in front of a judge.
He was teaching people who had recently been sued for credit-card debt how they could defend themselves — and in many cases either get the case dismissed or the fees greatly reduced.
The Consumer Debt Clinics — also called credit-card or municipal clinics — are offered throughout Summit, Stark and Portage counties by Legal Aid. They are free to the general public and are not subject to low-income requirements, like other Legal Aid programs.
That’s because the Legal Aid staff is not representing the consumers in their cases; they essentially are walking them through a do-it-yourself defense. The clinics in Summit County receive $15,000 from the United Way of Summit County, which recently renewed its grant. The United Way of Portage County also gives some money toward the Ravenna Clinic. Other funding for the clinics comes from the Ohio Legal Assistance Foundation and Legal Services Corp.
In a recent class I observed, McGarrity guided five people through the paperwork in a folder that was handed out to them. It laid out legal definitions, a flow chart of the “steps of a credit-card lawsuit” and step-by-step instructions and fill-in-the-blank legal motions for the potential defendants, among other things.
“It sounds like trickery, but it’s not. These are games lawyers play,” McGarrity said in a separate interview.
Playing devil’s advocate, I asked McGarrity and others whether they are giving defendants a cheat sheet. They said no.
Arming defendants with the proper knowledge and paperwork to file in the case empowers them, said Sara Strattan, executive director for Community Legal Aid, which serves eight counties.
“I don’t see this as people getting one over on the system. I see it that people are calling them to their proof,” she said. Strattan said she’s been surprised at the number of times, while minor, that the debt is not actually owed. In many cases, the amount of the debt is wrong or there’s insufficient proof the amount is accurate, she said.
“My position is if you’re going to have your wages attached, you should not have money taken from you that you don’t owe,” Strattan said, referring to situations where, if the defendant loses, collection can come from garnisheed earnings, bank accounts, repossessed cars or liens on homes.
The classes last about an hour and a half and are offered at multiple locations, including the municipal courts in Akron, Barberton and Stow as well as in Ravenna and Canton. Consumers can go to any clinic, though it is suggested that they attend a clinic within their own county because some procedures may vary by county. If you live in a county that does not have clinics, you can still attend one. (See an accompanying story for clinic details.)
The clinics are strictly for credit-card debt. Legal Aid has arranged with the clerks of court in Summit, Stark and Portage counties to insert a notice for the free clinics in the summons that comes with the lawsuit.
At the clinic, the information seemed like it could be overwhelming to consumers who are not used to dealing in the legal system. Mc-Garrity patiently explained the various steps, stopping to answer questions or glance at people’s paperwork to see whether something applied to them. McGarrity also said he’d be available at the end of the class to answer questions.
History of clinics
The clinics were started because Legal Aid representatives and judges were noticing a large number of judgments in favor of the collection agencies because consumers didn’t show up in court, McGarrity said. When that happens, the judgment automatically goes to the plaintiff, even if the plaintiff doesn’t have the documentation to win, he said.
Akron Municipal Judge John Holcomb said there are three large Cleveland firms that do a lot of the debt collection work for the state.
“Increasingly, they would just file a complaint, say you owe this much and bingo, that was it. Now, people are asking for more definite statements,” Holcomb said.
Holcomb also said he did not believe the Legal Aid clinics were a cheat sheet.
“Clearly, everybody is entitled to a defense,” he said. “I think it’s just giving them legal advice.”
Since Legal Aid lawyers have more cases than they can handle, this is a way for them to offer advice on a fairly straightforward process for consumers to handle themselves, they said. In more difficult cases, a Legal Aid lawyer might get involved, McGarrity said. Consumers are also welcome to attend more than one clinic to seek advice, he said.
According to McGarrity, here’s usually how a credit-card case ends up in municipal court: A consumer builds up credit-card debt and doesn’t pay it for one reason or another, perhaps a job loss.
The credit-card company will try to collect from the consumer, but if it is not successful, it will sell the debt to another company, typically a collection agency. That company will sue the consumer in municipal court. There’s a limit of up to $15,000 for suits in municipal court; however Legal Aid lawyers say the documents from the clinic can also be used to defend consumers in common pleas court for larger amounts.
However, the “documentation is usually inadequate to prove they bought the debt and without the information they own the debt and the amount you owe, they can’t prevail in court,” McGarrity said.
Since 2008, 1,597 people have gone through the Legal Aid clinics and, of those, 1,217 have had their cases completed through the courts. Of those 1,217 cases, 547 were completely dismissed — a 45 percent success rate. The consumers collectively have avoided $2.44 million in debt, McGarrity said.
“About half of the people who make the effort have less than the original claimed or dismissed,” McGarrity said. “It sounds like magic and most people don’t believe me.”
At the recent session, McGarrity told participants that while they most likely did incur the debt, “unless you did the math and accrue the day to day, you are trusting them” on the actual amount owed.
“Failure to respond is an admission. Don’t admit anything if you don’t know it’s true. Don’t admit something you can’t prove to win. If you can’t prove it to win, don’t admit it to lose,” he said.
Strattan, the Legal Aid executive director, acknowledged that the clinics are different and that the subject can be daunting, The clinics may be among the first in the country and have been replicated in other areas, she said.
“This looked like the kind of case that we could take apart and teach people to do,” Strattan said.
The forms are not just handed to people and aren’t available on the agency’s website. “I don’t think it’s ever a good idea to give something like this out without some instruction,” she said.
Pay your bills
McGarrity and Strattan said the best thing is to not get into the position to be sued by a creditor. To keep good credit, consumers must pay their bills.
But if consumers find themselves being sued, they most likely don’t have the money to pay in the first place, McGarrity said.
“Unless you have an influx of money or have won the lottery, you shouldn’t settle because if you had the money, you would have paid it. There’s a chance you could get the whole case dismissed,” McGarrity said.
And, once a case is dismissed, the collection agencies tend to walk away and not try the case again, unless they think the consumer actually has the money, Mc-Garrity said.
The collection companies have been getting better about bringing the proper documentation to court, McGarrity said, but for the most part, “the records companies have are so abysmal.”