Last spring, Mr. Lara, a monolingual Spanish-speaker, appeared in court for a debt collection case in which the creditor was seeking almost $10,000. Through an interpreter, he tried to explain to the judge that he thought he had already resolved the issue. Mr. Lara said he had reached an agreement to settle the debt for $3,000, and indeed, he had already paid $2,200 of that amount. The judge continued the hearing so that the plaintiff could investigate.
The plaintiff that sued Mr. Lara is a debt buyer—a company that purchases distressed debt for pennies on the dollar, often receiving nothing more than a database spreadsheet with limited information about accounts that are sold “as is” with no warranty that the amounts are accurate or that the accounts are valid or enforceable.
When the parties returned to court a couple of months later, the plaintiff had not obtained any additional information about the history of Mr. Lara’s account. Once again through an interpreter, Mr. Lara tried to explain his agreement to settle the account with the original creditor. This time, the judge suggested that Mr. Lara meet with an attorney through Legal Aid’s Consumer Law Court-Based Legal Services Project, which provides same-day legal assistance and representation to low-income consumers in debt collection cases.
Legal Aid investigated the matter. It turned out that Mr. Lara had in fact entered into an agreement with his credit card company to settle the account for the sum of $3,000 to be paid in four installments on four specified dates. The settlement agreement was confirmed by the credit card company in writing. To Mr. Lara’s surprise, the credit card company did not follow the terms of the agreement. Instead, it made two large lump sum withdrawals from Mr. Lara’s bank accounts on one day. The unexpected withdrawals put Mr. Lara in a very difficult position financially, as his funds for necessary expenses such as food and housing were taken without warning. Despite the credit card company’s actions, Mr. Lara attempted to pay off the remaining balance on the $3,000 to settle the account, but the company inexplicably rejected his payment. The account was eventually purchased by several debt-buyers, the last of whom sued Mr. Lara to collect the entire outstanding balance on the account.
Confronted with evidence of the settlement agreement and payments, the plaintiff agreed to dismiss the case against Mr. Lara rather than proceed to trial. Now that the case has been dismissed, there is no longer any risk that Mr. Lara will be forced to pay thousands of dollars from his limited income for an account that the credit card company agreed to settle years ago, only to void the agreement after their own breach.
Mr. Lara’s case illustrates the myriad of barriers faced by low-income clients—barriers that are sometimes overwhelming and may prevent low-income clients from obtaining legal assistance and ultimately a just result. Not only is Mr. Lara is a monolingual Spanish-speaker of limited means, he also suffers from several health conditions that limit his mobility. Without a Legal Aid attorney to assist, it is unlikely that Mr. Lara would have been able to gather the evidence he needed to support his claim that he had settled the account and the credit card company breached that agreement. And, it is almost certain that he would not have been able to challenge the plaintiff’s claim that the $10,000 debt was enforceable, despite the fact that the plaintiff was the third debt-buyer to purportedly purchase the account “as is.”
Resolving this case entailed substantial legwork, investigation and negotiation—tasks that Mr. Lara may have found insurmountable without the assistance of an attorney. Legal Aid is honored to have played a role in making justice real for Mr. Lara, and we congratulate him on his victory in this case.