Leadership In Law Podcast

S03E105 How Credit Card Lawsuits Really Work with Efstathios Georgiou

• Marilyn Jenkins • Season 3 • Episode 105

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A knock at the door, a stack of papers, and suddenly your heart is racing. Getting sued over credit card debt feels terrifying, and for many people it triggers panic rather than a plan. We sat down with attorney Efstathios Georgiou, who spent years on the bank side before defending consumers, to unpack what really happens when a creditor files suit and how to respond before a default judgment steamrolls your finances.

We walk through the lawsuit timeline step by step: service of process, the 20–30 day window to answer, and the cascade that follows if you do nothing. Efstathios explains how judgments enable wage garnishments and bank account freezes, including joint accounts via turnover motions, and why a motion to vacate can reverse the damage when service was improper or life truly got in the way. We dig into the practical differences between debt consolidation, debt settlement, and courtroom defense, when each makes sense, how forgiven balances can trigger taxes, and why a credit score often starts to rebound within months and typically recovers within two years.

You’ll also learn how to request debt validation to pause aggressive collection, spot documentation gaps that reduce claimed balances, and use the statute of limitations to your advantage. We discuss judgment‑proof income like unemployment and disability, and the strong federal protections that shield active‑duty service members from enforcement. Beyond the legal mechanics, we address the emotional toll, shame, stress, and family pressure, and the power of clear education, careful fee review, and reading the fine print before signing any relief program. If you’ve ever wondered what banks don’t tell you, how debt buyers operate, or whether “settled for less than full balance” ruins your future, this conversation offers grounded answers and next steps.

Reach Efstathios here: 
www.georgioulawpllc.com

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SPEAKER_00:

The Leadership in Law Podcast is here to equip you with the knowledge and tools you need to build a successful and fulfilling legal practice.

SPEAKER_01:

Welcome to another episode of the Leadership in Law Podcast. I'm your host, Marilyn Jenkins. Please join me in welcoming my guest, Estasios Giorgio, to the show today. Estasios is the founder of Giorgio Law PLLC, a New York law firm dedicated to consumer credit law and debt defense. A former bank attorney, he now uses his insider knowledge to help individuals fight back against credit card lawsuits, debt collectors, and unfair practices. Known for his motto, Credit Card Debt Ends Here, Estasios is both an advocate and educator committed to empowering people with tools and strategies to achieve financial freedom. I'm excited to have you here. Welcome.

SPEAKER_02:

Thank you for having me.

SPEAKER_01:

Absolutely. This is incredibly interesting. So I'd love to hear your journey coming from the bank side up to working with consumers.

SPEAKER_02:

Yes. So it's been quite a journey. I started on the bank banking side, representing large banks across the large banks that cover the entire U.S. I'm from New York, so that's where my practice is. I represented these banks for five years, collecting mostly credit card debt, some personal loan debt, and some business credit card or business loan debt. So I saw how to these institutions a case was a file number for them, but for the consumer, it was more than just a file number. It was their livelihood, it was a lot of stress on the on their plate. And they could certainly use somebody on their side to explain things to them instead of just saying, yes, I agree, nodding to whatever the bank attorney would present to them. It took me some time to say, you know what, I think I'm ready now to go on my own and do this and build up the experience, I guess, was part of it. And here I am now representing consumers in New York City. I'll be probably expanding my reach to other areas of New York, but for the time being, uh, I'm focused on New York City.

SPEAKER_01:

Okay. All right. And I know that there's a lot of stigma around credit card debt and defaults and that sort of thing. And so I love the fact that you took one view and went, wait a minute, people need better representation because it's not very clear what the options are. And whenever it's from the bank side, you know you're only getting part of those options. Can you tell us a little bit about how a lawsuit really works whenever something reaches that point?

SPEAKER_02:

Yeah. What happens a lot of times, a person gets served with a summons or legal paperwork and they panic, they freak out, and they just put it away somewhere and they just don't want to deal with it. That's the worst thing you can do because you're gonna hand an automatic victory to the bank. They're gonna get a uh default judgment from the court because if you fail to respond, usually 20 days, sometimes 30 days within the time you've been served, then they can make that motion to the court. And once they have a judgment in their possession, that gives them the ability to do one of three things pretty much. The least likely scenario would be attaching a lien on your property. Most of the consumers rent the rent departments, so that would not be applicable. Although we did have some of those scenarios. More likely would be garnishing your wages and freezing your bank account.

SPEAKER_01:

Now I knew about the garnishing of the wages, but freezing your bank account, I didn't realize that was a threat as well.

SPEAKER_02:

Sure is, yes. And even if it's a joint bank account, they can make a motion, which they call it a turnover. When I first heard about that motion early in my career, I was thinking of the bakery store and the Apple turnovers. And actually, that's how somebody in the firm described it to me. So you can make a motion to have that joint bank account frozen because there's well split the money in a situation. So there needs to an argument needs to be made before the judge. The judge needs to see that you're making a cohesive, comprehensive argument. And usually they'll grant that motion and the bank account will be frozen, and then the consumer gets notice from their bank that their account has been frozen. They don't have access to their money, so they start panicking again. Again, at this stage, they ignored it, or in some cases, actually, it wasn't the consumer's fault. It was perhaps improper service, or what we call sewer service. So they said they served it by this method, when in reality they they never served it. This doesn't happen as often as it used to happen, but it still does happen on occasion. So we need to be aware of that.

SPEAKER_01:

Okay. So you can there are remedies if you didn't actually get served appropriately.

SPEAKER_02:

Of course, yes.

SPEAKER_01:

Okay. And I'm I know that bad news doesn't age well, so putting that those papers in the in a drawer is certainly not the right thing to do whenever you can reach out to an attorney and help get something organized.

SPEAKER_02:

Exactly. So briefly, if you find out that there's a judgment against you, go to the courthouse, go to the clerk's office. The clerks are very nice, they'll pretty much guide, they'll be short of giving legal advice because they're not permitted by law to get legal advice, but they are permitted to guide you to fill out the form. And you're gonna make a motion to vacate the default judgment.

SPEAKER_01:

Okay.

SPEAKER_02:

You have to show a reasonable excuse and a meritorious defense, which nine out of ten times can be done. And the judge will then vacate the default judgment. You can then perhaps negotiate a settlement right then and there with the bank's attorney before the judge and be on your way.

SPEAKER_01:

Okay. So now is it my responsibility to prove that I was improperly served, if that was the case, or is there some tracking it in its court? Okay.

SPEAKER_02:

Yeah. What happens is the bank has to produce what's called an affidavit of service. They have to file this document along with when they filed the summons of complaint with the clerk's office. Okay. So they go simultaneously. And if they produced a document and they said, I served you personally, and you turn around and tell the judge at this hearing, Your Honor, I never received these documents. The judge is more likely going to take the side of the consumer. The credibility will lean towards the consumer side than the bank side.

SPEAKER_01:

Okay. And do you still find that the banks are using like strong-arm tactics to just cut this short and win?

SPEAKER_02:

Of course. There are some law firms who are more aggressive than others. Most definitely. I have not been associated with many of those aggressive firms. I've been associated with for four years, I was associated with a firm that was not strong-arming that are consumers. And in my in my case, at least, I was in Brooklyn every day and doing the best thing that I could to see that the consumers were treated fairly and equally.

SPEAKER_01:

What kind of taxes do you find that debt collectors use?

SPEAKER_02:

With tactics.

SPEAKER_01:

Yeah, tactics, and what are they legally allowed to do?

SPEAKER_02:

So sometimes what happens, and even in the firm that I work with, you're always going to have any profession, you're always going to have some bad apples. You can't avoid that. It's just statistically speaking, it just happens. Every so many people, you'll get one person who does not follow what they've been told are the rules for personal gain because they work off a commission sometimes or they get a bonus if they close so many cases and so on and so forth. So they might do something which is borderline harassing. So they have the consumer on the phone, and the consumer has expressed to them a desire not to be contacted. And before they get off the phone, they're saying, let's do a payment plan. Consumer saying, I'm no situation, yeah, I'm not in a situation to do that. And I've just told you I'm getting off the phone, don't contact me. One of the best things a consumer can do if contacted by a debt collector is request debt validation. That's gonna pause everything and give you a window of just like a timeout window and where the bank's attorneys are gonna have to prove the debt that that is valid and so on and so forth. Yeah. Less and less of an issue where we have aggressive tactics, but they still exist.

SPEAKER_01:

And I think there's always gonna be bullies. It's just one of those things.

SPEAKER_02:

Sure. Absolutely, yeah.

SPEAKER_01:

So when we're talking to the three different parts of this, like debt settlement, debt consolidation, or defense in court, can you explain the differences of those and what would be the ideal situation or what option works best for certain situations?

SPEAKER_02:

Okay. So debt consolidation is when an individual has multiple accounts with different banks. They could be credit cards or they could be a mixture of credit cards and loans. And they come to me and they say, I need to consolidate, I need to I want to make one monthly payment. Okay. So then we set them up with an account that they have full control over. They make payments in that account, and then after it's at least after the second or third payment, they start remitting uh payment for our legal services. By federal law, this industry is heavily regulated and we're not allowed to can collect any upfront fees.

SPEAKER_01:

Okay.

SPEAKER_02:

So in other area, other areas of the law, for example, if it was a criminal matter or if it was a real estate closing, you can collect an upfront fee, like a retainer. You can say, tell the client, you owe me$5,000, pay it now, and then we'll work and do billable hours, for example. So debt contalibation, you're not reducing the principal amount. Debt settlement, you are reducing the principal amount, sometimes drastically, um, by 50% or 60%. So the consumer pays back a much smaller amount. What I do tell clients is are you in a position where 12 or 24 months from now, or shorter than that, I should say you're gonna make a major purchase in your life, like a financial purchase you're thinking of or planning of. If you are, then we shouldn't pursue the route of a debt settlement because it's gonna have an impact on your credit score.

SPEAKER_01:

Okay.

SPEAKER_02:

If you're okay with the impact on the credit score and you want to get a reduced principal amount, then we can move forward with that settlement.

SPEAKER_01:

And does that so as long as I'm not gonna be buying a car or a house or something in the near future, because when they run my credit, they're gonna not give me the loan or whatever.

SPEAKER_02:

So what happens typically, let's just hypothetically say today we entered into a settlement agreement with the bank and it's a debt settlement. So instead of hypothetically you owing$10,000 to the bank, you're not gonna pay back$6,000. Okay. So there's gonna be some tax consequences there because the IRS says if it's over$600 and it's a forgiven amount, there's tax to be paid at the end of the year. Oh. As long as the bank reports it, sometimes the banks do not report it to the IRS.

SPEAKER_01:

Okay.

SPEAKER_02:

So in addition to that, your credit score within the first six months is gonna start to recover. So you're gonna start seeing a slight, like an upward trajectory of your credit score bouncing back as they show the payments being made. And then within 24 months, your credit score will be fully recovered to where it was before. So it takes about 24 months for your credit score to recover if you do a debt settlement approach. That's why I tell people within this time period, are you looking to just are you looking to finance a car or lease a car, get a mortgage, refinance a home, or get a home over line of credit? If you're looking to do any of these things, then you should not be considering a debt settlement.

SPEAKER_01:

So it's not a seven-year stigma, if you will. It's not something on your record for seven years anymore. Isn't that what it used to be? No.

SPEAKER_02:

It will fall off of your credit report in seven years if you settle for less than the full amount.

SPEAKER_01:

Okay.

SPEAKER_02:

Once in a blue moon, someone at the bank can be nice and say they will word it differently. They will not say settled for less than the full amount. Once that phrase is put on your credit report, it stays there and it drops off at set at the seven-year mark. The credit score recovers in two years. Okay. So yeah.

SPEAKER_01:

So say I was just, can I voluntarily go to the bank and settle to consolidate my debt so that I can make the payments better? Is that something a consumer can just do without really before they get into trouble?

SPEAKER_02:

They can. Sometimes, however, the banks are not going to be forthcoming with like your options. The banks are really in a position to make money. So they have their bias and their agenda. An attorney has the agenda of protecting their clients' rights to competing interests. So if you just go to the bank and you are relying that they're going to be your advocate as well, it's a false premise.

SPEAKER_01:

Of course, makes sense. So we look at what types of income. Are there some exempt income? So when we talk about garnishing your wages or any of that thing, which I know that's a that's something that people really are afraid of because you're starting to get by already. What types of income are exempt from anyone taking that for your debt?

SPEAKER_02:

Yes, I have a client whose only source of income right now is unemployment benefits. Unemployment benefits are exempt income. So they are what's called judgment improved. However, another source of income that is exempt would be disability benefits or supplemental social security income. Okay. Just to name what I see often come across the table. With that being said, that a client can say to the bank, I'm judgment-proof. It can still, the bank can still go to the court and get a judgment and enforce it in the event that you win the lottery or in the event you do get a job or some source of income where they can now collect something from you.

SPEAKER_01:

At a later date.

SPEAKER_02:

Yeah, it really depends on the attorney negotiations that are going on.

SPEAKER_01:

And are we more stricter with the rules when it comes to credit card debt? Because I know that m credit card debt is unsecured and it's just ballooning in the U.S. at the moment.

SPEAKER_02:

Yeah. So right now in the United States, credit card debt is$1.3 trillion.

SPEAKER_01:

Wow.

SPEAKER_02:

It is up there in terms of the debt that's owed by consumers. Medical debt, there's more medical debt owed, but credit card debt is right next to it. It is unsecured debt, but just because it's unsecured, just like a personal loan would be unsecured in most circumstances. It doesn't mean you're going to get away with it. It doesn't mean that if you have a job, if you have income, they're going to come after you and they're going to want you to enter into some type of a payment plan. And as we mentioned before, we analyze whether consolidation is for you or settlement is for you.

SPEAKER_01:

Okay. Help having somebody on your side to make that analysis for you. Was that have someone on your side, not the bank, to help you make see which is best for you. What are some of the things that that banks don't want consumers to know about credit card debt and lawsuits and negotiations?

SPEAKER_02:

Most likely I would say is that they get they want consumers to have the assumption that just because they've been served with papers, they have to pay 100% of it back. There are often times where there could have been discrepancies in the statements. Some consumers are pretty for they do forensic analysis of their statements. Believe it or not, some consumers do. And they come back to me and say, Mr. Giorgio, they're suing me for 10,000, but I owe them 7,500, and this is why. And we go back and forth and go through the numbers. But I would say it's the misconception for the bank that we've sued you, so now we're going to collect 100%. Like we don't want to settle for anything less than 100%. That would be like the major premise, I would say.

SPEAKER_01:

Yeah, that's if it's strong arm tactics, strong arm tactics. Yeah. And in in New York, you've got a three-year statute of limitations.

SPEAKER_02:

We do. Well, how does that work?

SPEAKER_01:

Okay. How does that work when you say you've been served and you got 20 days to does that mean I have three years to make a plan? Or what does the statute of limitation mean by that whenever you're talking about the window?

SPEAKER_02:

So the statute of limitation is the bank can sue you three years from the last activity on the account. Okay. Last activity can be a payment or it usually involves a payment, a transfer balance, it could be, or things of that nature. That's when the statute of limitation starts to run from the last activity. So if they're outside of that window, don't be surprised if the bank will still try to collect. They can't collect in court because now they're outside the statute of limitations. However, it might send it to their law firm in that state that they have a relationship with, and they just might say, send them a letter, call them, perhaps you can get something. Or they might decide to sell it to a third-party debt buyer who will purchase it for literally pennies on the dollar and attempt to collect it. And there are some major banks in the US that that's their model. They don't they ship out most of their credit card debt to third-party debt buyers.

SPEAKER_01:

Okay. All right. Gotta try to get something. And I know, like we said, started at the beginning, going into debt and having that go bad is definitely a hard, it's a stigma, it's a really hard time. How do you help your clients when it comes to the mental health and the family life of when they're going through that with the pressure of the bank and that sort of thing?

SPEAKER_02:

Absolutely. It's a very difficult time for the client because whether it's family and friends and the stigma that gets attached, they feel like they've done something wrong. But the reality is that there are many factors that come into play for why a person has gone into that. And sometimes it's of not of their fault. So we just sit down, talk about it, find out what the root of the issue is, and then try to counsel them to not repeat bad mistakes or whatnot.

SPEAKER_01:

I think it's interesting. I think you and I had this conversation before. When I turned 18, I got credit cards, I got the ones that have checks attached to them. You don't have the wherewithal to take a$3,000 credit limit and not use it. It's just it's one of those things they encourage you. And I think that's not fiscally responsible for the company for an 18-year-old to now have this money that maybe they never had before. And now it's going to take years to pay off at the interest rate.

SPEAKER_02:

Correct. That's absolutely right. And that's what they prey on. It they prey on people who are not informed.

SPEAKER_01:

Exactly. And you don't realize the ones that come with checks, that the checks are a way more interest rate than if you just went and used the credit card. No one reads the fine print.

SPEAKER_02:

No, that's they leave the fine print to attorneys, and attorneys have created the fine print in various industries, whether it's banking, credit cards, so on and so forth. But it's important if if you decide to use somebody for debt settlement or debt consolidation, it's important to read the fine print to understand what are the fees that this company is charging me. Because some companies might charge you 25%, 30% of the total debt that is enrolled in their program. Other companies might charge you 15% or thereabouts. So that's usually the spectrum. But you need to, it takes time because you have to read X amount of pages. It's not just one page and it's not the font size is not, it doesn't, it's not soothing to the eyes.

SPEAKER_01:

Exactly. I know that there's a comparison sites on the internet that will break down those interest percentage. I think doing your research before you get a credit card if that's something you need is important as well.

SPEAKER_02:

Absolutely.

SPEAKER_01:

So let's talk a little bit about consumer rights under federal laws. So this is across every state, and some of the things that's tried to slip under the grade are of a military person running into this. What are some of the protections that we can look at and how to do to look at?

SPEAKER_02:

I have a client who is a service member. They had a default judgment entered against them. Now, backtrack. When you start a lawsuit, you do what we call a scrub.

SPEAKER_01:

Okay.

SPEAKER_02:

And you do a scrub to determine whether or not this individual is in the military, is active in the military.

SPEAKER_01:

Okay.

SPEAKER_02:

Most law firms, if the individual is in the military, they will not initiate a lawsuit.

SPEAKER_01:

Okay.

SPEAKER_02:

Because federal law prohibits you from enforcing a judgment while the person is active in the military. Because the this is a law that goes back, I believe it's the 1970s or 60s. And the rationale is that the service member should not be concerned about going to court versus being deployed. So this individual had their bank account restrained. I got on the phone with the law firm, and we were able to settle it for 45% of what he was being sued for. His bank account was released, and now we're just waiting for a document from New York court, which is called Satisfaction of Judgment, which I told him once you receive this document from me, you can laminate it, make it a poster, frame it, don't lose it. You need this to be your proof, like forever going forward. And he laughed at me. I said, I'm being serious, it's an important document that you need to have in your possession always. Yes, they did not want any bad PR. So I could have taken them to court and filed a motion, but instead we negotiated over the phone to have this result. As you can understand, it would not have been a good outcome for that law firm and that bank.

SPEAKER_01:

Yeah, exactly.

SPEAKER_02:

Had it got out of rule, right?

SPEAKER_01:

Yeah, you don't want to be put in the city.

SPEAKER_02:

So that's what service members have protection against. Is service members, they you can't collect against them in terms of when they're active, to deployed or not deployed. And you can't get a judgment against them, and then you can't enforce the judgment. You have to wait until they are out of the military, whatever branch they're in. This individual happened to be in the army. And by that time, that's why the bank took 45%. It behooves them to take that than to risk taking nothing because this individual was also a of young age, and you don't know what's going to happen in the next 20, 30 years.

SPEAKER_01:

And you were there to help them. That's amazing. That's absolutely amazing. So I know that you have a podcast as well, and your motto is credit card debt ends here. Tell us a bit about that. And I know you love the educational aspect of what you do.

SPEAKER_02:

I do.

SPEAKER_01:

Tell us a bit about that.

SPEAKER_02:

Yeah, so my first episode about a month ago now was the anatomy of a credit card lawsuit. It's more geared towards New York State, but the principles apply to other states as well. Each state has a little different nuance. For example, in New York State, you have to respond within 20 days if you were served personally in hand. If it was any other method, they give you 30 days. That's the one distinction we have in New York State. Whereas in other states like Florida, I was talking to an attorney and she mentioned it's a 20 20-day rule. I said, okay. So I do talk about different topics on my podcast like that. I talk about the statute of limitations, default judgments, motions to vacate a default judgment, what criteria the the judge is looking for you to meet so that you can have the default judgment vacated by the court. And yeah, just different topics like that to just educate people as best as I can to put it in simple terms, not use any legal lease and things of that nature.

SPEAKER_01:

I love that. We need that. That so much is just mysterious behind the all the legal lease and you still don't get it. You also have a free resource for your people that are interested in debt relief. Your debt relief guidebook?

SPEAKER_02:

Yes. It's on my website. They can put in their email address and they can get the guidebook. Again, it's tailored to New York City, I would say, because the I have a copy of an answer form that they can expect to fill out when they go to the courthouse. Some people who just want to do it themselves and they call me, I'll just walk them through it and I'll say, okay, if you want to do it yourself, that's your prerogative. I can't force you to hire me. But if you do feel overwhelmed, then you can give me a call. I'm here. I had a person who on Saturday I was having a discussion with. She's having her wages garnished because she had a default judgment. She told me, yes, I did have a default judgment because on the court date I fell and I was hospitalized. I said, Great. So I said, you need to gather up all your documents from the hospital, from your physical therapy, and bring them with you to court. The judge is going to want to see that. The judge is going to want to see that there was a reason you didn't come to court and not just you ignored it, you didn't want to appear and so on and so forth.

SPEAKER_01:

Wow. Yeah, exactly. The more evidence, the better.

SPEAKER_02:

Yes, definitely.

SPEAKER_01:

This has been really educational. I I love the fact that you have your podcast, you have your guidebook to help people, and you're there to answer questions. If anybody that's listening wanted to reach out to you for any questions or to connect with you, where would they do that?

SPEAKER_02:

So they can visit my website or they can call me directly. My number is 917-764-3072.

SPEAKER_01:

All right, perfect. So what we're going to do is we're going to have a link to the guidebook and the name of your podcast and your email address and web address, telephone number and web address in the show notes for anybody that wants to reach out. This has been very interesting. I appreciate being on the show with us. And thank you so much for educating us on debt relief and debt the debt problems that we're some people are going through and what direction to go in.

SPEAKER_02:

It's been my pleasure. Thank you for having me.

SPEAKER_01:

Absolutely. Thanks for joining me today for this episode. As we wrap up, I'd love for you to do two things. First, subscribe to this podcast so you don't miss an episode. And if you find value here, I'd love it if you would rate it and review it. That really does make a difference in helping other people to discover this podcast. Second, you can connect with me on LinkedIn. To keep up with what I'm currently learning and thinking about, and if you're ready to take the next step with a digital strategist to help you grow your law firm, I'd be honored to help you. Just go to Law Marketingzone.com to book a call with me. Stay tuned for our next episode next week. Until then, as always, thanks for listening to Leadership and Law Podcast, and be sure to subscribe wherever you listen to podcasts so you don't miss the next episode.

SPEAKER_00:

Thanks for joining us on another episode of the Leadership and Law Podcast. Remember, you're not alone on this journey. There's a whole community of law firm owners out there facing similar challenges and striving for the same success. Head over to our website at LawMarketingZone.com. From there, connect with other listeners, access valuable resources, and stay up to date on the latest episodes. Don't forget to subscribe and leave us a review on your favorite podcast platform. Until next time, keep bleeding with vision and keep growing your firm.

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