Sued Over Credit Card Debt? Don't Represent Yourself
I want to mention a couple decisions from the Indiana Court of Appeals that will likely have a profound impact on Indiana consumers for years. The decisions are noteworthy because they are both a significant departure from and/or addition to prior Indiana law and they make it much easier for credit card companies and debt collectors to obtain judgments against Indiana consumers. Do I believe the cases were wrongly decided? Yes I do. But I also believe that part of the problem is that the consumer/defendants tried to represent themselves in these cases.
I don't mean to say that these consumers meant to do anything wrong. In fact, I feel for them. I know that sometimes there is simply no money to hire an attorney and no way to come up with the money. I understand that. I also know that it can be difficult to find an attorney who knows how to handle debt defense cases and who won't charge an outrageous fee for doing so. I have clients tell me this often. Nevertheless, the fact remains that we have these two Court of Appeals decisions that are potentially harmful to every Indiana consumer in debt because these consumers decided to defend themselves, lost in the trial court and then made the very unfortunate decision to appeal. And if the Court of Appeals opinions are to be believed, neither did a good job of defending their own interests or the interests of Indiana consumers.
One of the cases deals with arbitration. It makes it very difficult for Indiana consumers to challenge an arbitration award. First, and this is critically important, the challenge must be filed within three months after the award is "filed or delivered." What "filed or delivered" means apparently will depend on the rules of the entity agreed-upon (allegedly) to conduct the arbitration. In this particular case, it was the mailing of the award by U.S. Mail. Proof of receipt of the mailing is not required. This means that, as the consumer alleged in his case, the time to challenge the arbitration award could expire before the consumer has any idea that an arbitration was ever filed! If that happens, under this decision, the consumer is simply out of luck.
Second, the arbitration award challenge must allege one of the following:
(1) the award was procured by corruption, fraud, or undue means;
(2) there was evident partiality or corruption in the arbitrators, or either of them;
(3) the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
(4) the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.
I hope that consumer attorneys are successful in strictly limiting the application of this case to its facts. Only time will tell. But what we do know, and what this case makes so much more important, is that when you are notified of the initiation of an arbitration proceeding, you cannot sit back and ignore it. YOU HAVE TO FILE AN OBJECTION TO THE ARBITRATION IMMEDIATELY. See MBNA America Bank, N.A. v. Kay, 888 N.E. 2d (Ind. Ct. App. 2008). And what if you never received any notice until you are sued in Indiana state court in a proceeding to confirm the arbitration award? Well, if you received notice of the lawsuit later than three months from when the award was allegedly mailed to you, you are very likely completely out of luck. That simply doesn't seem right to me.
Please think twice about representing yourself in these cases. I realize that sometimes you simply have no choice. However, if you find yourself in the situation, please do not appeal. When you do, you run the very strong risk of creating bad law for everyone.