Thursday, December 19, 2013

How to Sue Your Bank in Small Claims Court and Get Back Overdraft and Other Fees

Fighting Bank Fees in Court

We've all had the experience of getting fees from our bank that seemed suspicious and going through the customer service nightmare. Did you know that the majority of big banks' profit comes from overdraft and other fees?  Sounds rather predatory to me, yet that is the world we live in as corporations become more and more powerful.  
Bank customer service representatives often aren't authorized to give back large amounts in fees, even if the fees were in violation of the bank's user agreement or the law. Filing a lawsuit should never be taken lightly because there's always the possibility that your bank will end up fighting you hardcore and you'll lose and have to pay their attorney's fees. But in many cases, it's not worth the bank's time and money to send an attorney to small claims court, which means you may win with a default judgment. If you're interested in suing your bank in small claims court, here's how to do it:
Keep Meticulous Records 
From the very moment your bank charges you an unwarranted fee, you need to begin keeping meticulous records. This can and should include screen shots of your online bank account, records of phone calls (and recordings as well, as it is legal to record phone calls in Maine, but not Massachusetts), and anything else that can help your case. The more documentation you have, the more likely you are to win.
Know the Law While you can sue over just about everything, if you're not suing over a broken law or breach of contract, you won't win. Know what law or provision of your user agreement your bank is in violation of. Banks, for example, are currently not allowed to charge overdraft fees without your explicit consent via an opt in provision. They also can't violate their own user agreement by, for example, charging you an overdraft fee when you didn't overdraft. You can also sue for negligence if your bank did not change something you asked them to- like taking you off of overdraft protection. Excessive charges, which many states classify as penalties, may also entitle you to sue. For example, it may not be legal for your bank to charge you two hundred dollars in overdraft fees.
File Your Complaint One of the great benefits of small claims court is that you don't need a lawyer, and the filing fee is usually less than a hundred dollars. Of course, this means it's not worth it for you to sue over twenty dollars, but if your bank has charged you hundreds of dollars in fees, it certainly is. You can also sue for damages you incurred as a result of the fees- if, for example, your electric bill was late you can sue for the late fees.
What to Expect Customers who sue their banks often receive a settlement offer before ever going to court. This is the amount the bank is offering to compensate you and is legally binding once you sign it. It's generally unwise to accept less than the money the bank owes you, but it's also a good idea to avoid getting greedy. If you're suing for 10,000 dollars in damages on a hundred dollars in overdrafts, your bank is likely to fight you, and if you lose you could end up paying their attorney's fees.
If the bank does not call you, or you decline the settlement offer, you will then have to prove your case in court. This is where your documentation and any witnesses you have become extremely important. In many cases, the bank will not send a representative. It's generally not worth their time or money to pay an attorney hundreds or thousands of dollars just to avoid refunding bank fees. If this happens to you, you will likely get a default judgment. However, you still need to be prepared to prove your case because different judges have different approaches to default judgments.
After you get a judgment in your favor, you don't automatically get the money. You will then have to collect on it. Your state's small claims court will have information available to you on how to collect, and if your bank does not pay in a timely manner you may be entitled to late fees, interest, etc. Oftentimes getting a bank to pay after you have won the suit is the most difficult part of suing, but stay focused on getting your money. When people begin suing banks in court, it becomes more difficult for banks to cheat customers with exorbitant, unfair, or illegal fees!

Tuesday, December 17, 2013

How To Form a Maine LLC

Here are the steps you need to take to form an LLC in Maine.

1. Choose a Name for Your LLC

Under Maine law, an LLC name must one of the following: "limited liability company" or “limited company” or the abbreviation “L.L.C.,” “LLC,” “L.C.,” or “LC”; or, in the case of a low-profit limited liability company, “L3C” or l3c.”

Your LLC’s name must be distinguishable from the names of other business entities already on file with the Maine Secretary of State. Names may be checked for availability by searching the Maine Secretary of State’s business name database. You may reserve a name for up to 120 days by filing an Application for Reservation of Name with the secretary of state. The reservation must be filed by mail. The filing fee is $20.

2. File a Certificate of Formation

A Maine LLC is created by filing a Certificate of Formation with the Maine Secretary of State. The articles must include the LLC's name and address and the name and address of the LLC’s registered agent. The articles must be filed by mail. The filing fee is $175.

3. Appoint a Registered Agent

Every Maine LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. A registered agent may be (1) an individual who resides in Maine, or (2) a business entity authorized to do business in Maine. The registered agent must have a physical street address in Maine. Carey Law is happy to be your registered agent.

4. Prepare an Operating Agreement

An LLC operating agreement is not required in Maine, but is highly advisable, especially if there is more than one member. If an operating agreement is created, it need not be filed with the Articles of Organization.

5. Publication Requirements


6. Comply With Other Tax and Regulatory Requirements

Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.

Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses.

7. File Annual Reports

All LLCs doing business in Maine must file an Annual Report with the Maine Secretary of State every year by June 1. You can obtain a preprinted annual report form from the secretary of state’s website. The report may be filed online, or by mail. The filing fee is $85 for domestic LLCs, $150 for foreign LLCs.

8. Foreign LLCs Doing Business in Maine

To do business in Maine, all LLCs organized outside of the state must register with the Maine Secretary of State. Foreign LLCs must appoint a registered agent for service of process physically located in Maine. To register, file a Statement of Foreign Qualification to Conduct Activities with the secretary of state. The application is filed by mail. The filing fee is $250. 

The completed application must be accompanied by a Certificate of Existence or Good Standing from the foreign LLC’s home state, dated nor more than 90 days prior to the filing of the certificate.
Before filing, make sure the LLC’s name is available in Maine by checking the Maine business name database. If the name is not available, the foreign LLC must adopt a fictitious business name for use in Maine and submit with the application a Statement of Intention to Transact Business Under an Assumed or Fictitious Name (available here). An additional $40 fee must be paid when filing the statement.