{"id":26,"date":"2018-02-05T15:44:28","date_gmt":"2018-02-05T20:44:28","guid":{"rendered":"https:\/\/www.law.georgetown.edu\/poverty-journal\/?page_id=26"},"modified":"2025-05-12T11:12:38","modified_gmt":"2025-05-12T15:12:38","slug":"wwzzz-zombie-debt-the-zlaket-rules-and-regulation-z","status":"publish","type":"page","link":"https:\/\/www.law.georgetown.edu\/poverty-journal\/in-print\/volume-25-issue-1-fall-2017\/wwzzz-zombie-debt-the-zlaket-rules-and-regulation-z\/","title":{"rendered":"WWZZZ: Zombie Debt, the Zlaket Rules, and Regulation Z"},"content":{"rendered":"<p>Even casual observers of film know how to stop a monster attack. A wooden stake through the heart will kill a vampire.<sup>1<\/sup> Silver bullets slay werewolves.<sup>2<\/sup> Double tap to destroy a zombie.<sup>3<\/sup> In the movies, protagonists familiar with these tactics might save themselves and loved ones. In the theater of litigation, technical legal knowledge that helps defeat zombie debt gives attorneys a real-life opportunity to rescue cash-strapped consumers, many of whom are consigned to cycles of debt and poverty.<sup>4<\/sup><\/p>\n<p>Big banks issue most major credit cards<sup>5<\/sup> and will spend years trying to collect from consumers who do not pay their credit card debt.<sup>6<\/sup> If banks fail to collect, they sell the debt for pennies on the dollar to debt buyers.<sup>7<\/sup> Debt buyers then sue consumers for outstanding balances<sup>8<\/sup> that average around three thousand dollars.<sup>9<\/sup> Debt buyers win many of these cases because consumers never respond to the lawsuits.<sup>10<\/sup> The consequences can be devastating for consumers because of garnishments, court costs, attorney fees, and interest on judgments obtained.<sup>11<\/sup><\/p>\n<p>In Arizona, debt buyer plaintiffs prevail in droves over consumer defendants that ignore their lawsuits.12 One justice of the peace revealed that he processed sixty default judgments for debt buyers from his home in the space of about four hours on a Sunday afternoon.<sup>13<\/sup> When consumers do answer the bell, debt buyers still chalk up wins in breach of contract cases without having to admit into evidence actual credit card contracts at either summary judgment <sup>14<\/sup> or trial.<sup>15<\/sup> Debt buyers skate by with monthly billing statements.<sup>16<\/sup><\/p>\n<p>Consumers should net better litigation results in light of evidentiary, procedural, and regulatory requirements. Pursuant to the best evidence rule (or \u201cBER\u201d),<sup>17<\/sup> an applicable credit card agreement, i.e., the version of the agreement in existence at the time of the card\u2019s most recent use,<sup>18<\/sup> must be produced by a debt buyer at summary judgment and trial unless the agreement is proven to be lost or destroyed.<sup>19<\/sup> Rules of civil procedure in some states, like the Zlaket Rules in Arizona, mandate that a debt buyer search early for the applicable credit card agreement.<sup>20<\/sup> Credit card agreements collected pursuant to Regulation Z<sup>21<\/sup> have been posted to the internet for years.<sup>22<\/sup> Interplay among these requirements should make an applicable credit card agreement a <em>sine qua non <\/em>in any debt buyer breach of contract case.<\/p>\n<p>Credit card agreements, however, are more bane than boon for debt buyers because many contain pre-dispute arbitration clauses<sup>23<\/sup> and choice of law provisions<sup>24<\/sup> detrimental to collections cases. Under an agreement that requires private arbitration, the cost of collection can climb to four thousand dollars because of arbitrator fees.<sup>25<\/sup> This outlay of cash may not be recoverable from the consumer like it would be in court<sup>26<\/sup> so debt buyers will, in many cases, \u201cdo the math and elect not to pursue the arbitration based on a simple cost-benefit analysis.\u201d <sup>27<\/sup> Somewhat surprisingly, the state law chosen to govern a credit card agreement will often have a shorter limitations period than that of a forum state.<sup>28<\/sup><\/p>\n<p>Alas, many consumers do not keep their credit card contracts<sup>29<\/sup> and most are unable to advance tenable legal positions on their own.<sup>30<\/sup> Consumers seldom have lawyers.<sup>31<\/sup> They either cannot afford an attorney or cannot find an attorney to take their case.<sup>32<\/sup> \u201cAs a result, consumer debtors, who lack any knowledge of their legal rights, must resort to appearing <em>pro se <\/em>and stumble through complex procedural and substantive legal issues that even some trained attorneys do not fully understand.\u201d<sup>33<\/sup><\/p>\n<p>On the bright side, consumers achieve far better outcomes in the small number of cases in which they do have representation.<sup>34<\/sup> Thus, these are not losing battles. Because legal aid programs turn away more than half of the eligible people who seek assistance,<sup>35<\/sup> this article reminds attorneys of their ethical obligation to the poor<sup>36<\/sup> and encourages them to consider a volunteer role with a legal aid organization.<sup>37<\/sup> This article also augments an arsenal of legal discourse available to consumers and their prospective attorneys.<sup>38<\/sup><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Even casual observers of film know how to stop a monster attack. A wooden stake through the heart will kill a vampire.1 Silver bullets slay werewolves.2 Double tap to destroy [&hellip;]<\/p>\n","protected":false},"author":28,"featured_media":0,"parent":36,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"abstract.php","meta":{"_acf_changed":false,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":"","_tec_slr_enabled":"","_tec_slr_layout":""},"class_list":["post-26","page","type-page","status-publish","hentry"],"acf":[],"ticketed":false,"_links":{"self":[{"href":"https:\/\/www.law.georgetown.edu\/poverty-journal\/wp-json\/wp\/v2\/pages\/26","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.law.georgetown.edu\/poverty-journal\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.law.georgetown.edu\/poverty-journal\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.law.georgetown.edu\/poverty-journal\/wp-json\/wp\/v2\/users\/28"}],"replies":[{"embeddable":true,"href":"https:\/\/www.law.georgetown.edu\/poverty-journal\/wp-json\/wp\/v2\/comments?post=26"}],"version-history":[{"count":2,"href":"https:\/\/www.law.georgetown.edu\/poverty-journal\/wp-json\/wp\/v2\/pages\/26\/revisions"}],"predecessor-version":[{"id":953,"href":"https:\/\/www.law.georgetown.edu\/poverty-journal\/wp-json\/wp\/v2\/pages\/26\/revisions\/953"}],"up":[{"embeddable":true,"href":"https:\/\/www.law.georgetown.edu\/poverty-journal\/wp-json\/wp\/v2\/pages\/36"}],"wp:attachment":[{"href":"https:\/\/www.law.georgetown.edu\/poverty-journal\/wp-json\/wp\/v2\/media?parent=26"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}