April 7, 2016

Sued by a debt collector: how clients hire us

We are often asked, "OK, so if want to hire you to defend me in a debt collection suit, how does that happen?"

The short answer is there are two things that happen.

First, you sign a contract hiring us.

Second, you pay us.

Signing a contract.
You can sign it in our office.

We can mail it to you.

We can email it to you and you print it out and sign.

Or most our clients use "Docusign" where you can sign it electronically on your phone or tablet or computer without needing to find a printer/scanner. No need to download any software -- its very easy to us.

Bottom line is we want to make this as convenient as possible for you.

You pay us.
You can mail us a check or most folks use an online payment method. We include this link with your contract.

So again, whatever is easiest is fine for us.

We hope you find this and the other posts in this series helpful and if we can help you, feel free to call us at 205-879-2447 or click on the red button below and we'll get right with you.

Click Here To Get Help Now

Thanks!

John Watts

April 6, 2016

FDCPA -- 15 U.S. Code § 1692 - Congressional findings and declaration of purpose

This is the first section of the FDCPA (Fair Debt Collection Practices Act). I've quoted the law below and my comments will be in italics and underlined.

(a) Abusive practices
There is abundant evidence [not a little but a lot of evidence] of the use of abusive, deceptive, and unfair debt collection practices by many [not a couple but many] debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy. [These are 4 of the major injuries to societies as a direct result of abusive debt collection. So when debt collectors claim that what they do is no big deal, just keep in mind that is the debt collector lying. The law tells us that violating the law -- abusive debt collection -- is a very big deal. Bankruptcy. Divorce. Job loss. Invasion of privacy.]

(b) Inadequacy of laws
Existing laws and procedures for redressing these injuries are inadequate to protect consumers. [This is certainly true in Alabama now. We can use other laws to sue abusive debt collectors but they always argue only the FDCPA should be allowed in the lawsuit. Without the FDCPA, much of the abusive debt collection would go unpunished which leads to the consequences above and is unfair to honorable law abiding debt collectors as shown in the last section below.]

(c) Available non-abusive collection methods
Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts. [This rejects the crazy argument of abusive debt collectors that they have to break the law in order to collect debt. Can you imagine that argument anywhere else? "We have to make defective cars to make money." "We have to amputate the wrong legs in surgery to make money." Its insane but welcome to the twisted world of abusive debt collectors.]

(d) Interstate commerce
Abusive debt collection practices are carried on to a substantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate commerce. [This is in here to show how the federal government has the right to regulate debt collection. If something affects "interstate commerce" then normally the federal government can regulate it.]

(e) Purposes
It is the purpose [so this tells us the goals of the FDCPA] of this subchapter to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged [it is unfair for a collector to cheat and break the law when the other debt collectors are following the law -- so the FDCPA protects debt collectors who play by the rules and punishes those that break the rules], and to promote consistent State action to protect consumers against debt collection abuses.

If you are a victim of abusive debt collection or you simply have questions, feel free to call us at 205-879-2447 and we'll be glad to chat with you about your questions and options.

John Watts

April 5, 2016

Case filed -- FCRA lawsuit against Hyundai/Kia Capital for false credit reporting

Here is an example of a recent federal court lawsuit we filed against Hyundai Capital (also known as Kia Capital) for false credit reporting in violation of the FCRA (Fair Credit Reporting Act).

As you can imagine, Hyundai/Kia deny any wrongdoing.

You can read the lawsuit below -- our basic position is that Hyundai negligently or intentionally reported a false balance owed when it knew that our client did not owe any money.

If you are dealing with similar issues, make sure you have done proper disputes under the FCRA and if that still won't fix it, then look at suing in federal court.

Let us know if you live in Alabama and have any questions....

John Watts
205-879-2447

COMPLAINT

COMES NOW the Plaintiff, by and through counsel, and for Plaintiff's Complaint against the Defendant states as follows:
1. This action arises out of Defendant's violations of the Fair Credit Reporting Act (15 U.S.C. § 1681 et seq. [hereinafter “FCRA”]), which have directly resulted in Plaintiff not being able to purchase her first home due to the false credit reporting by Defendant.

JURISDICTION

2. Personal jurisdiction exists over Defendant as it has the necessary minimum contacts with the State of Alabama and this suit arises out of its specific conduct with Plaintiff in Alabama. All the actions described in this suit occurred in Alabama.
3. Subject matter jurisdiction exists under federal question jurisdiction (28 U.S.C. Section 1331).

VENUE

4. Venue is proper as Plaintiff lives in Alabama and the Defendant does business in this judicial district.

PARTIES

5. Plaintiff is a natural person who is a resident of Alabama.
6. Defendant Hyundai Capital America, Inc. d/b/a Kia Motors Finance (“Defendant” or “Kia”) is a foreign company that engages in the business of reporting consumer credit information to credit reporting agencies. It conducts business in this Judicial District. Its principal place of business is the State of California and it is incorporated in California.

FACTUAL ALLEGATIONS

Plaintiff purchases a 2012 Kia in 2012 with Gap insurance

7. On or about August 1, 2012, Plaintiff purchased a 2012 Kia from Kia and it was financed through Kia.
8. Plaintiff purchased, from Kia, Gap insurance that would pay the difference between the value of the car and the amount owed if the car was totaled.
Plaintiff’s 2012 Kia is wrecked and the loan is paid off
9. Several weeks later Plaintiff was in a wreck and the car was totaled.
10. Kia told Plaintiff it would handle the claim with the primary insurance company to recover the value of the 2012 Kia.
11. And Kia told Plaintiff it would file the Gap insurance to cover the “gap” in the value and the amount owed.
12. Kia took these actions and the loan was fully paid without any problem.
Plaintiff purchases a 2013 Kia with Gap insurance
13. Needing a vehicle as Plaintiff’s was totaled, on or about September 26, 2012, Plaintiff again took out a loan with Defendant Kia – this time on a 2013 Kia Forte.
14. Defendant Kia again sold to Plaintiff a "Gap" insurance, which would pay the difference or "gap" between the value of the Kia and the amount owed if the Kia was totaled.

Plaintiff’s 2013 Kia is totaled in a wreck in 2013

15. On October 21, 2013 Plaintiff wrecked the vehicle (2013 Kia) and Plaintiff's 2013 Kia was totaled.
16. Plaintiff promptly reported this to Kia and Kia said it would file the Gap insurance and it would get the primary insurance payment – exactly as had occurred one year before on the 2012 Kia.
17. Plaintiff's insurance paid Kia and the Gap insurance would pay the rest of the amount owed.
18 months later Plaintiff discovers Kia is falsely reporting
the 2013 Kia on Plaintiff’s credit reports
18. Plaintiff discovered the last week of May 2015, that Plaintiff's credit reports falsely showed balances of the whole amount owed when Plaintiff’s insurance had paid over $14,000 to Kia for the then value of the 2013 Kia at the time of the wreck.
19. The credit reports also showed that Kia was reporting that Plaintiff was late in payments since the wreck.

Plaintiff’s first dispute to the credit reporting agencies under the FCRA

20. Plaintiff disputed this to the credit reporting agencies and Defendant Kia corrected the credit reporting to show Plaintiff had not been late since the wreck and did not owe the full amount of the loan.

Plaintiff is looking to buy a home and discovers Kia
is still reporting the “gap” amount as owed

21. But Plaintiff noticed Kia was still reporting $5,401.00 owed, which was the amount the Gap insurance would pay.
22. Plaintiff had recently married (2015) and was looking at purchasing a home.
23. As a teacher, owning a home has been a life long dream of Plaintiff.
24. Part of preparing to purchase a home is to make sure that your credit reports are accurate.

Plaintiff calls Kia repeatedly to get her credit reporting fixed

25. Given the continued inaccuracy of Kia’s reporting (that a balance was owed), this led Plaintiff to not only do the Fair Credit Reporting Act disputes to the credit reporting agencies but also to talk to Kia directly.
26. Plaintiff contacted Kia on several occasions about this and Kia told Plaintiff that Kia had not filed the Gap insurance claim.
27. Defendant Kia promised to file the claim.
28. In the late summer of 2015, Defendant Kia told Plaintiff that it had filed the claim on the wrong Kia loan so the claim was denied.
29. Kia filed the Gap claim on the 2012 Kia, not the 2013 Kia.
30. But the 2012 Kia had already had a Gap claim filed and paid – in 2012.
31. Naturally, one cannot get double payment for the same vehicle.
32. Plaintiff again requested that Kia fix the false credit reporting showing she owed a balance – she owed no balance as Kia had sold her the Gap insurance, Kia financed it, and Kia promised to file the claim.
33. Kia then promised Plaintiff that Kia had corrected this to file it on the correct loan – the 2013 Kia loan.
34. Plaintiff told Kia Plaintiff was buying a house and had to have this corrected.

Kia knows Plaintiff does not owe any money on the 2013 Kia so it only attempts to force Plaintiff to pay this unowed money by false credit reporting

35. Despite Defendant Kia causing this issue with its refusal to file the Gap insurance claim on the right vehicle, even nearly two years after the wreck, Defendant Kia claims on Plaintiff's credit reports that she owes $5,401.00.
36. It is important to note that nowhere else does Kia claim Plaintiff owes any money on the 2013 Kia loan.
37. No bill has ever been sent to Plaintiff since the 2013 wreck.
38. No phone call has been made to Plaintiff requesting payment since the 2013 wreck.
39. When Plaintiff has had repeated (and frustrating) calls with Kia about this fiasco, no representative of Kia has ever said, stated, hinted, or even implied that Plaintiff owes any money on the 2013 Kia.
40. This is because Plaintiff owes no money on the 2013 Kia.
41. Plaintiff even purchased a new vehicle and, ironically, the dealership financed it through Defendant Kia.
42. This would never have happened if Plaintiff actually owed money on the 2013 Kia.
43. If Plaintiff really had an outstanding balance of over $5,000 that had been owed since October 2013, Kia would never have allowed Plaintiff to finance another Kia.
44. Plaintiff owes no money on the 2013 Kia – this is why Kia has again financed a car for Plaintiff.

Plaintiff disputes, again, the false credit reporting by sending a detailed letter with attachments to Kia and the credit reporting agencies

45. Plaintiff in November 2015 sent a very detailed dispute letter with many attachments to Kia, Equifax, Experian, and TransUnion, disputing the balance owed on the 2013 Kia and that it was an open account.
46. Plaintiff explained in great detail how the amount of the debt (current balance) and the monthly payments pushed her “debt to income” ratio beyond the point where she could qualify for her home loan.
47. Plaintiff informed Kia (and the credit reporting agencies) that she had a contract on the home she wanted to buy and the Kia reporting is the only reason she could not close on the home.
48. And that this impacted the sellers who had a contract to buy a house but could not do so until they sold their house to Plaintiff.
49. In short, Kia knew exactly what it was doing wrong and exactly the tremendous damage it was causing Plaintiff and others by its malicious decision to continue to falsely report the account on Plaintiff’s credit reports.
50. Kia received this dispute letter directly and has failed to even show the slightest courtesy in responding to Plaintiff.
51. No apology has come from anyone at Kia.
52. Kia has no regret over what it has done and is continuing to do to both Plaintiff’s family and the seller of the house Plaintiff wants to buy.
53. Nor to any realtor involved or mortgage company involved.
54. Kia’s policy and procedure, which will be established through its repeated conduct here and with other victims across the country, is to show no concern or regard for any of its wrongful actions, as it believes it is above the law in dealing with American consumers as opposed to the US government.
55. All involved (mortgage company, realtor for seller, Plaintiff) have tried to get Kia to fix the false credit reporting but have been stonewalled.
56. In response to the dispute letter, the credit reporting agencies contacted (individually) Kia to ask Kia whether to keep the balance owed and the open account status.
57. Kia, knowing full well the falseness of its reporting, instructed the credit reporting agencies to keep the false information on Plaintiff’s account.
58. Kia did this knowing it had destroyed the opportunity for Plaintiff to purchase her home.
59. Defendant Kia did not perform any type of reasonable investigation.
60. The credit reporting agencies properly notified Defendant Kia in accordance with the FCRA of the dispute by Plaintiff.
61. Defendant failed to properly investigate this dispute, as if Defendant Kia had properly investigated, the account would show that it is closed and nothing is owed.
62. The Defendant Kia was provided with more than sufficient information in the dispute and in its own internal sources of information to conduct an investigation and to conclude that the account complained of was being reported incorrectly.
63. Defendant Kia has promised through its subscriber agreements or contracts with the credit reporting agencies to accurately update accounts but Defendant Kia has willfully, maliciously, recklessly, wantonly, and/or negligently failed to follow this requirement as well as the requirements set forth under the FCRA, which has resulted in the intended consequences of this information remaining on Plaintiff's credit reports.
64. Defendant Kia maliciously, willfully, intentionally, recklessly, and/or negligently failed to review the information provided in the disputes and that was already in its files and to conduct a reasonable investigation on Plaintiff's disputes, which led as a direct result and consequence to all of the Defendant either failing to delete information found to be inaccurate, failing to replace the inaccurate information with accurate information, and/or reinserting the information without following the dictates of the FCRA.
65. One single example: If Defendant Kia had reasonable procedures in place in its investigation and reporting, it would have noticed the oddity of an account showing Plaintiff as owing $5,401.00 but not making any payments while simultaneously not reporting Plaintiff as late since the wreck and extending a new loan to Plaintiff.
66. If a human being with any concern over the solemn duty of credit reporting had looked at this, that human being would have known this was wrong and would have fixed the credit reporting.
67. But Kia does not allow its employees the “discretion” to fix blatant and damaging errors – instead there exists at Kia a systemic problem of refusing to allow errors to be corrected, even when the consumer makes repeated requests.
Plaintiff has been horribly damaged by Kia and cannot purchase her home
68. The conduct of the Defendant has proximately cause Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit worthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.
69. Plaintiff reapplied for her home loan after the malicious conduct of Kia in refusing to fix her credit reports in response to the now second valid FCRA dispute.
70. Plaintiff was turned down for the sole reason of the Kia reporting.
71. As Kia knew and intended, Plaintiff has lost the ability to purchase a home.
Kia knows exactly what it has done to Plaintiff – all has been done
according to the plan of Kia
72. It is a practice of Defendant Kia to maliciously, willfully, recklessly, wantonly and/or negligently ignore and refuse to follow the requirements of the FCRA.
73. Defendant is a sophisticated business and it knows its conduct is wrong.
74. All actions taken by the Defendant were done with malice, were done willfully, and were done with either the desire to harm Plaintiff and/or with the knowledge that its actions would very likely harm Plaintiff and/or that its actions were taken in violation of the FCRA and/or that it knew or should have known that its actions were in reckless disregard of the FCRA.
75. Defendant has engaged in a pattern and practice of wrongful and unlawful behavior with respect to accounts and consumer reports and as such Defendant is subject to punitive damages and statutory damages and all other appropriate measures to punish and deter similar future conduct by these Defendant and similar companies.
76. Defendant is liable to Plaintiff through the doctrine of Respondeat Superior for the wrongful, intentional and negligent acts, errors, and omissions done in violation of federal law by its employees and agents.

CAUSES OF ACTION
COUNT I.
VIOLATIONS OF THE FAIR CREDIT REPORTING ACT
15 U.S.C. § 1681 et seq.

77. Plaintiff incorporates by reference all of the above paragraphs of this Complaint as though fully stated herein.
78. Defendant Kia is an entity that, regularly and in the course of business, furnishes information to one or more consumer reporting agencies about its transactions or experiences with any consumer and therefore constitutes a "furnisher," as codified at 15 U.S.C. § 1681s-2.
79. Plaintiff notified the credit reporting agencies directly of a dispute on the Defendant Kia account's completeness and/or accuracy, as reported.
80. The credit reporting agency properly notified Defendant Kia of Plaintiff's dispute in accordance with the FCRA requirements.
81. Plaintiff also directly notified Kia of her dispute and provided all documents so Kia cannot argue it did not have its own internal documents – which it has had at all times – as Plaintiff sent them to Kia.
82. Kia has its own file of the conversations, notes, memos, etc. showing that this account is paid in full.
83. And the credit reporting agencies sent the appropriate documentation to Kia.
84. Defendant failed to delete information found to be inaccurate, reinserted the information without following the FCRA, or failed to properly investigate Plaintiff's disputes.
85. Plaintiff alleges that Defendant failed to conduct a proper and lawful reinvestigation.
86. All actions taken by the Defendant were done with malice, were done willfully, and were done with either the desire to harm Plaintiff and/or with the knowledge that its actions would very likely harm Plaintiff and/or that its actions were taken in violation of the FCRA and/or that it knew or should have known that its actions were in reckless disregard of the FCRA.
87. All of the violations of the FCRA proximately caused the injuries and damages set forth in this Complaint.

PRAYER FOR RELIEF

WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that judgment be entered against Defendant for all damages allowable (including statutory, actual, compensatory, nominal and punitive the total of which Plaintiff claims more than $75,000.00), costs, expenses, fees, injunctive relief to prevent further violations, and for such other and further relief as may be just and proper.

Respectfully Submitted,


John G. Watts (ASB-5819-t82j)
M. Stan Herring (ASB-1074-n72m)
Watts & Herring, LLC
The Kress Building
301 19th Street North
Birmingham, Alabama 35203
(205) 879-2447
(888) 522-7167 facsimile
john@wattsherring.com
stan@wattsherring.com
Attorneys for Plaintiff


PLAINTIFF DEMANDS A TRIAL BY JURY IN THIS CAUSE.


Attorney for Plaintiff

Serve defendant via certified mail at the following address:

Hyundai Capital America, Inc.
d/b/a Kia Motors Finance
c/o National Registered Agents, Inc.
2 N. Jackson Street, Suite 605
Montgomery, Alabama 36104

March 22, 2016

Sued by a debt collector: can we do consultation over the phone?

A natural question is do you have to come to one of our offices or can we do the consultation by phone?

Either way is fine but most folks do it by phone (or video). This saves you time as you don't have to get time off of work, etc. and come see us -- instead we do a 20-30 minute phone call.

We'll have the court paperwork in front of us and you can email us any credit reports or other documents we need to see.

This way you can get answers to any questions you have and not waste your time. I'm amazed in 2016 how many professionals (doctors, lawyers, accountants, etc) refuse to do things by phone and instead insist on making their clients/patients come see them in person when it is not needed.

We hope you find this and the other posts in this series helpful and if we can help you, feel free to call us at 205-879-2447 or click on the red button below and we'll get right with you.

Click Here To Get Help Now

Thanks!

John Watts

March 22, 2016

Sued by a debt collector: welcome to our series of posts and videos....

We have a total of eleven articles (including this one) about the process of being sued by a debt collector in Alabama and hiring us to represent you. These blog posts are for our clients but we often have questions by lawyers and other consumers how we handle various parts of the defense of a debt collection suit so we are making this public.

We hope this is helpful to you.

Here is what we will cover (we'll make each of these a hyperlink when we add each post):

1. Do I need to come to your office or can we do a consultation over the phone?

2. How do I hire you to defend me in a debt collection suit?

3. How do you file my Answer to the lawsuit and how do I get a copy?

4. What happens after you file my Answer for me?

5. If the case does not settle, do I need to be at trial?

6. What happens when we settle the debt collection suit against me?

7. What is a settlement agreement in the debt collection case?

8. What is the motion to dismiss with prejudice?

9. What happens after the debt collector dismisses my case with prejudice?

10. Why should I pull my credit reports 90 days after my case is dismissed with prejudice?

We hope you find these helpful and if we can help you, feel free to call us at 205-879-2447 or click on the red button below and we'll get right with you.

Click Here To Get Help Now

Thanks!

John Watts

January 26, 2016

What does an FDCPA lawyer do for consumers like you?

FDCPA lawyers help stop abusive debt collectors from harassing you -- the best way to do this is to sue the lawbreaking collectors and make them pay you money damages.

"So what is the FDCPA?"
FDCPA stands for the Fair Debt Collection Practices Act. This is a federal law passed in the 1970s to stop abusive debt collectors.

The law was passed and continues to be on the books because so many collectors violate the law and this is unfair for two reasons.

First, it is unfair to consumers as people with access to our credit reports, credit information, personal financial information, etc. should not be allowed to harass us. We'll talk about some examples later in this article.

Second, it is unfair for abusive collectors to operate in the marketplace because it hurts the law abiding honorable debt collectors. The ones that follow the rules are at a competitive disadvantage to those collectors who break the law. Imagine a football game where one team often has 12 or 13 players on the field at one time. That's an advantage but it also is called cheating and there is a price to pay.

"Do collectors really break the law?"
Yes.

The slightly longer answer is that because breaking the law gives a competitive advantage in the marketplace, many collectors give in to the temptation to cheat because it means higher profits and it hurts their competition.

So a for profit business naturally and rightfully wants to increase profits. Nothing wrong with this.

And if increasing profits causes your competitors to lose business or even go out of business, then that's considered a nice bonus.

Abusive debt collectors are not normally abusive just because they hate consumers. It usually is not "personal" -- it is just a business owner creating an environment where the business happily breaks the law to make more money.

It just so happens that in doing this, consumers are abused.

"What are some examples of debt collectors breaking the law?"
The two basic rules for debt collectors are:

First, don't lie to consumers.

Second, don't be unfair or harassing to consumers.

Examples of lying to consumers:
**Suing you for $7,000 when you owe nothing to the debt buyer (LVNV, Midland, Portfolio, etc).
**Telling you that you will be sued when the collector has no intention of suing you
**Telling you that you will be garnished when there is no basis to garnish you
**Telling you that you can't "dispute" a debt
**Lying to you by saying the collection account will never come off of your credit reports
**Lying about how you cannot file bankruptcy anymore
**Telling you that you owe a certain amount on your mortgage when you owe a lesser amount

Examples of unfair or harassing conduct:
**Suing you after the statute of limitations has expired
**Calling your neighbors or family members (other than your spouse)
**Calling your co-workers
**Using profanity or racial slurs against you
**Garnishing you when there is no right to garnish
**Suing you for an amount that you don't owe

As you can see, a lot of times conduct can be a lie and can also be unfair/harassing.

"What can I get by suing under the FDCPA?"
When you sue an abusive debt collector in federal court, you can get the following:
1. Statutory damages of up to $1,000
2. Actual damages to compensate you for any economic losses or emotional distress
3. Costs of filing and prosecuting the lawsuit
4. Attorney fees

"Should I do this on my own or hire a lawyer?"
Sometimes folks think it would be cheaper to not hire an attorney. But unlike a lot of other types of cases, you don't pay us any money to file your lawsuit.

And we only get paid if we win the case -- either a judgment or a settlement. Remember also that the debt collector can be forced to pay our attorney fee. Usually this is worked into the settlement as the collectors know that our hourly rate is $400 an hour as I'm writing this now.

This causes collectors to have to decide if they want to fight or if they want to settle. If they fight, and they know they will lose, the price of the case will go up every step of the way because of the attorney fees.

The other factor is that you will be in federal court -- most trial attorneys are not even comfortable in federal court due to the complexity of the rules. So if you, as a non lawyer, want to represent yourself then you must be prepared to know the rules.

"If I want to know more about my options, what should I do now?"
Give us a call at 205-879-2447 and we'll be happy to help you think through your options.

There is, of course, no obligation to hire us and no fee for us to speak.

Let's talk about your options and what is the best approach for you to take with the debt collector you are dealing with....

Normally it is suing them which puts money in your pocket, discourages bad behavior in general and certainly makes the collector leave you alone. Overall, very good things happen when we sue the bad guys.

I look forward to speaking to you -- call us at 205-879-2447.

John G. Watts

January 25, 2016

Should I ignore a letter from Ferry & Nicholas that claims I'm being sued?

No -- treat it very seriously as this normally means you have been sued in Alabama. I would NEVER hire this company but one thing they do a great job of is getting word to you that you have been sued. Normally they mail out their letter to you the next day after being sued.

How does Ferry & Nicholas get my name?
All lawsuits in Alabama, including debt collection lawsuits, are on what is known as "AlaCourt" which is the Alabama internet based court records. There are still physical files but this is where judges and lawyers work from -- Alacourt.

Every new lawsuit is listed along with your name and address.

So Ferry & Nicholas pull that data each day and then generate letters to you and everyone else sued that day.

Normally you will know about a lawsuit first from Ferry & Nicholas -- long before you are actually served with the lawsuit.

What does Ferry & Nicholas claim to do for me?
They claim to be mediators -- to be a go between for you and the company suing you. Now it may be an original creditor suing you (Capital One, Discover, etc.) or it may be a debt buyer (Asset Acceptance, LVNV Funding, Midland Funding, Portfolio Recovery, etc).

Regardless Ferry says they will work out an "out of court" settlement so you don't have to go to court.

Sound good? And they are very cheap -- under $200.

So any problems?

Why should I be skeptical about hiring them?
You have been sued. You are in a court proceeding.

And you get a letter from a non lawyer place claiming to help you with your lawsuit.

As you can imagine, this can and does often end in disaster.

So you hire Ferry & Nicholas.

OK -- do you file an answer to the lawsuit? (You have 14 or 30 days to answer the lawsuit from when you were served).

Because these non lawyers won't file an answer for you.

So you file it or you don't.

But what if you don't -- and often Ferry & Nicholas will tell you not to file an answer as they are "handling the lawsuit" -- then you lose.

You get hit with a judgment. A default judgment.

Now your wages are garnished -- your bank accounts are wiped out -- your property is seized.

When all of that happens, do you think this non lawyer firm that plays at being a lawfirm will actually help you?

That's right -- they will abandon you without a second thought. Because they can't represent you. They can't go to court.

Its a complete waste of money in my opinion to hire these guys.

But if you don't hire them, what else can you do?

Let's take a look at this . . . .

Can I handle the lawsuit on my own?
Yes you can if you are sued in small claims or district court in Alabama. Its not easy but it is doable. (Here is a comprehensive article and video on how the process works in small claims or district court).

Now being sued in circuit court -- that's very hard to do on your own.

But the vast majority of all collection cases are filed in small claims and some in district court so this is an option.

If you want to go this route, get in touch with us and we'll get you some resources to help you as you fight to win your case on your own.

Click Here To Get Help Now

Or you can call us at 205-879-2447. But what if you want to hire a lawyer -- is it doable?

Can I afford to hire a lawyer?
As a general rule my lawfirm fee is about the same as you could settle a case for with a lump sum. That is normally around 50% of the amount sued for.

So if you are sued for $4,000, my fee is going to be in the $1500-2000 range.

Now certainly this is a lot more than the Ferry & Nicholas fee.

Is it worth it to hire my firm?

Maybe.

If you want the lawsuit to go away, and you want to pay nothing, and you want the credit reporting deleted, and you want this debt killed, then its worth it. Those are our settlement terms.

And if a company does not settle, then we go to trial with our goal to win the case and sue the debt collector in federal court.

For most folks we speak with, we encourage them to handle the lawsuit on their own. But sometimes it makes sense to hire us.

Our focus is really on suing the debt collectors in federal court but we do represent a good number of Alabama consumers who are sued.

We can walk you through your options and what makes the most sense to do -- call us at 205-879-2447 or click the button below and we will get right back to you.

Click Here To Get Help Now

What should I do now?
Keep in mind you have 5 options when sued by a debt buyer and you need to consider all of them.

We'll help you do this so you know which option is the best:

**File bankruptcy
**Fight the lawsuit on your own
**Settle the lawsuit on your own
**Hire a lawyer to fight the lawsuit
**Hire a lawyer to settle the lawsuit

Everyone is different so we recommend that you call us at 205-879-2447 or you click the button below and we'll get with you right away and help you think through your options.

Click Here To Get Help Now

Talk to you soon!

John Watts

January 24, 2016

Why is Velocity suing me for an old car loan?

Velocity Investments, LLC is a debt buyer (debt collector) who supposedly buys up old car loans, usually after a repossession which leaves a deficiency balance. They are filing more and more suits in Alabama now.

A typical example of a Velocity suit
You buy a car from a local dealership and the loan is immediately assigned to Citi or Capital One Auto. Then maybe a year or two later, it is supposedly sold to Santander.

The car is repossessed, and Santander claims you still owe $12,000.

Four years later, the loan is supposedly sold to Cascade Capital and then a few months later to Velocity Investments.

After Velocity has the debt (or so it claims to have the debt), it will have a collection lawyer out of Mobile contact you -- Barry Friedman.

He will tell you that he is collecting this debt and you owe it. He will not tell you that the ownership is questionable (at best) and he will not tell you that he is collecting on a debt that is outside the statute of limitation.

Instead, if you don't pay anything -- and they just want one payment to claim to restart the statute of limitation -- then you will be sued for the $12,000.

Danger to you
The biggest danger to you is that you do nothing. Because if you do nothing, then Velocity will ask for and receive a default judgment.

This means it will be able to garnish your wages, garnish your bank accounts, and even force the sale of your property.

The next biggest danger is to assume Velocity has the right to sue you and filed the suit within the statute of limitations and so you pay Velocity instead of looking at your other options.

You have five options when sued by a debt collector like Velocity:

1. File bankruptcy
2. Fight the lawsuit on your own
3. Settle the lawsuit on your own
4. Hire a lawyer to fight the lawsuit for you
5. Hire a lawyer to settle the lawsuit for you

Let's assume that you are going to fight this lawsuit -- what are some problems for Velocity?

Problem one for Velocity -- it must prove it owns the debt
This is a problem for all debt buyers.

See they claim to "buy" the debt. But it is one thing to claim and it is another to prove it.

You would think it would be easy to prove it if they really bought the debt. But that's the kicker -- these debt buyers struggle mightily to prove ownership.

So either they do buy the debt but can't prove it or they never owned the debt in the first place.

Not really important to us because when they sue us, they have to prove ownership of the debt or they lose. Obviously you never did business with Velocity so they better be able to show they bought the debt from Cascade who must show it bought it from Santander who must show it bought it from Citi or Capital One Auto who must show it bought it from the dealer.

Lots of steps, isn't it?

That's why Velocity can buy this debt for a penny or two on the dollar because what they are buying is often a vague promise that this might possibly be a debt. But usually the contract where they "buy" the debt says there is no promise that any of the records are remotely accurate....

Problem two for Velocity -- it files suit after the statute of limitation expires
There is a big debate in Alabama over the statute of limitations on a credit card debt -- is it three (my belief) or is it six (collectors believe this).

With the type of car loans that Velocity buys, to my knowledge only Velocity thinks the statute of limitations is six years. Everyone else seems to know immediately that this is a four year statute of limitation as this is a lawsuit arising out of a sale of a good.

This means the UCC (Uniform Commercial Code) applies and it says four (4) years is the time limit.

I have yet to see a Velocity case brought in less than 4 years from the date of the repossession. The starting point is actually before the repossession but the statute certainly starts running at the time of the repossession.

Problem three for Velocity -- it normally can be sued for violating the FDCPA
Velocity has a habit in my opinion of suing people who do not owe Velocity. And suing folks well after the statute of limitations has expired.

We also see Velocity suing after consumers have made a valid dispute under the FDCPA (Fair Debt Collection Practices Act) but instead of responding to the dispute, Velocity simply sues.

All of these issues normally violate the FDCPA (and Alabama state law).

So the key is to win your case and then sue Velocity in Federal Court for money damages.

What to do if you have been sued by Velocity -- call us to go through your options
Call us at 205-879-2447 and we can go through your options, including whether you can sue Velocity in Federal Court.

There are a lot of legal issues involved and we need to know the details of your unique circumstance. Once we understand your situation (which we do in a no cost consultation call), we can give you our advice as to your best option.

You can reach us at 205-879-2447 or click the button below and we'll get right back with you:
Click Here To Get Help Now

Talk to you soon!

John Watts

January 23, 2016

How long does it take to finish a small claims or district court collection case?

From the time you answer the Alabama small claims or district court collection case filed against you, usually you will go to trial in 4-8 weeks.

Here's an overview of the process:

First, the debt collector (debt buyer) will file suit against you.
This happens all the time. Midland Funding and Portfolio Recovery each file about 100 lawsuits a week in Alabama against Alabama consumers.

Second, you will be served with the lawsuit.
This is where you are personally given the lawsuit. Or it is left with an adult who lives in your house. Or you will receive it by certified mail.

Being served is critically important as this starts the time limit for you to answer . . . .

Third, you have 14 days to answer the small claims or district court lawsuit.
Starting from the time you were served, you will have 14 days to answer.

It is critical that you answer -- if you don't, you can and almost certainly will get hit with a default judgment. This is a real judgment that will lead to garnishment of wages, bank accounts, and even the forced sale of your home and other assets.

You take the answer to the courthouse and file it with the clerk's office. Send a copy to the collection lawyer and then keep a copy for yourself that has been "stamped filed" so you can prove you actually did file your answer. If you have hired a lawyer, your lawyer will do this for you.

So avoid that default judgment by answering. Once you do, the next step is . . . .

Fourth, you will get a trial date.
Normally this will come in the mail in a week or two after your answer is filed. If you don't get it, call the court (if you are handling this on your own) to see when the trial date is so you don't miss it.

As soon as you know when it is, write it on your calendar and request time off from work, arrange for baby sitters, etc. Whatever you need to do to be available that day for court. Each court is different, but you may need to be available all day.

Fifth, you go to trial.
This is normally about 4-8 weeks after you file your answer.

So the total time to complete the collection case varies greatly but once you have been served, we know you have 14 days to answer and then normally about 1-2 months later you will be trying your case.

What do you do now?
When you have been sued by a debt collector, it is a scary thing. Feel free to call us at 205-879-2447 and we can help you think through your options.

You actually have five options -- despite all the letters telling you bankruptcy is your only option.

You can read a long article or watch a comprehensive video explaining your options but here are the options in summary format:

1. File bankruptcy -- normally this is a terrible idea but occasionally it is the right option.

2. Fight the lawsuit on your own -- in small claims and district court this can be a good option.

3. Settle the lawsuit on your own -- normally not a good idea as you can hire a lawyer for the same amount and get better results.

4. Hire a lawyer to fight the lawsuit -- when you hire us to fight it, our goal is to win the lawsuit and sue the debt collector in federal court.

5. Hire a lawyer to settle the lawsuit -- we don't pay the debt collectors any money but we do agree not to sue them if they will get the account off of your credit report and get rid of the lawsuit.

Call us at 205-879-2447 and we'll be glad to help you go through these options or even look up on the online court system to see if you have a trial date listed. Just ask for Carolyn and she'll be glad to help you and if you want to chat with me, she'll set up a free call so we can go over your options.

Or you can click this button and we'll get with you right away:
Click Here To Get Help Now

Thanks!

John Watts

December 8, 2015

Sued by an original creditor -- learn about your five options

Being sued by an original creditor (credit card company, car company, hospital, etc) is no fun and it is somewhat different than being sued by a debt collector or debt buyer.

Different rules can apply to debt buyers (Asset Acceptance, Midland, etc) than to original creditors (AMEX, Bank of America, Capital One, etc).

But you still have five options when sued:

1. Do you file bankruptcy (not likely but possibly appropriate)
2. Do you fight the lawsuit on your own (won't cost you any money on a lawyer but will cost you time figuring out what to do and doing it)
3. Do you settle the lawsuit on your own (again no lawyer money but make sure you get this right)
4. Do you pay money to a lawyer to fight the case (costs money that you trust will give you a better chance of victory)
5. Do you pay money to a lawyer to settle the case (make sure this is a better deal than on your own in terms of money or peace of mind).

Our video above covers these in about 13 minutes and then in the rest of the video we answer questions that are often asked:

**What if I (or my collection lawyer) talk to the collection lawyer about settling, does this mean I admit I owe the debt?

**What is a judgment?

**What is a “consent judgment” and why is this normally bad?

**Should I hire a mediation company like Ferry & Nicholas, Inc. that sends me an advertisement letter?

**If I file my own answer, where do I take it?

**What do I do if the collection lawyer brings a witness to the trial?

**The debt was charged off so I can’t be sued, right?

**Why should I pull my credit reports?

**How do I pull my credit reports?

**Isn’t it illegal for collection lawyers to sue me on an old debt in Alabama?

**How do I know the collection lawyers have truly bought the debt they are suing me on?

**What is discovery in a collection case?

**What is a summary judgment motion in circuit court?

**If I hire you and the case does not settle but goes to trial, do I need to be at the courthouse?

**What happens at the trial of my case?

**Explain what happens if I go to trial and win my case.

**What are the options on appeal if I lose my case or if I win my case?

**Why does the creditor who sued me have to delete its account on my credit report if I win the case?

**Have you ever had a client sued by a creditor and you won the case then sued the creditor?

**What should I do now?

If you want to go over your options, feel free to call us at 205-879-2447 and we will set up a phone consultation at no charge and you'll leave that consultation with a clear understanding of your rights and options.

John Watts

November 2, 2015

Does the probate judge handle foreclosures in Alabama?

I was speaking with an experienced real estate professional the other day and the comment was made to me that probate judges in Alabama decide whether a foreclosure will happen or not.

So I wanted to address this issue or question.

How does a foreclosure happen in Alabama?
Here are the steps:
1. You get a default letter telling you that you are in default (usually not making payments) and that you have 30 days to fix the default;

2. You get an acceleration letter telling you the whole loan is now due at once ("accelerated") and the foreclosure date is usually set;

3. The actual foreclosure occurs outside the front entrance to the courthouse.

What happens at the actual foreclosure sale?
The auctioneer actually reads the information about the foreclosure -- the property description, etc. Then the bidding begins. Almost always the high bidder is the mortgage company or the "investor" behind the scenes such as Fannie Mae, Freddie Mac, etc.

What role does the probate judge have in foreclosures in Alabama?
None.

The mortgage company (or the foreclosure lawyer) will prepare and file a foreclosure deed which is where you sell the property to the high bidder. This gets recorded in the probate court records.

But the probate judge does not approve or disapprove of the foreclosure. Sometimes people go to the judge and demand the probate judge not allow a foreclosure -- this does nothing as that is not the judge's role.

(Probate judges are vitally important but this is outsider their "jurisdiction" or their power to act).

How do you stop a foreclosure?
So if you can't go to the probate judge to stop a foreclosure, how do you stop one?

1. Bankruptcy -- extreme option but sometimes this works.

2. Loan modification.

3. Loss mitigation.

4. Sue the mortgage company.

There are many options but you have to figure out the right one for you. We have a 5 part process to help you do this and we make this available at no charge.

What to do next?
Go to our 4 part video series on saving your home from foreclosure -- there is a lot of work involved in this video series along with the workbook we will email you.

If you are looking for an "easy button" then you will be disappointed in this series. But if you are serious about saving your home, then this will be very helpful to you if you live in Alabama.

You can also call us at 205-879-2447 and we will be glad to help you think through your options.

Best wishes!

John Watts

October 31, 2015

Facing foreclosure in Alabama? Beware scam modification companies!

The Problem
You are facing a foreclosure.

The loss of your home.

Where will you move?

What will you do?

Possible Solution?
You get a letter from a loan modification company or an out of state lawfirm saying they can "guarantee" you that your loan will be modified and the foreclosure will stop.

Really.

Guaranteed?

This is code for "I'm going to steal your money and you will lose your home."

"But they seem very nice on the phone and they tell me how many homes they have saved -- they seem very sincere."

Well, con artists by definition are charming and sincere and really good, right?

Here's the truth.

No one can guarantee that a foreclosure will be stopped and that you will get a loan modification. Now there are things that can be done to adjust the odds in the right circumstances. But no guarantees.

So how do you know if who you are dealing with is legit or bogus?

How to Know if Modification Company is Legitimate?
Here's a short list:
1. Do they explain how they get results?
2. Do they have an actual website?
3. Do they have an actual physical location -- and no, a UPS store mailbox doesn't count. Look it up on Google Maps/Satellite view to see if it is a real office.
4. Do they have books or videos for you to watch or read? Materials that has actual substance instead of just marketing hype?
5. If they are going to be doing legal work, are they actually lawyers? Or do they say "We have a relationship with a lawyer" which again is code for "We are going to steal you blind."
6. If they have law degrees, are they licensed in Alabama? Or is this the typical California or Florida licensed lawyers (perhaps) who have no right to practice in or advise any clients in Alabama.
7. Do you get a good feel from them or are they pressuring you to "buy right now!!" from them?

Use your own good judgment and make sure before you hire someone that you feel good about the decision.

What Do You Do Now?
If you are facing foreclosure, you need Action. And lots of it.

Doing nothing will get you foreclosed.

So definitely Action is needed.

But make sure the action you are taking is the right action and you have good advice.

If you live in Alabama, a great place to start is our comprehensive (some think it is too comprehensive but that's ok) Four Video Series On Saving Your Home From An Alabama Foreclosure.

Only go there if you are willing to take massive action -- you will learn a lot and then you can take action.

Or give us a call if you live in Alabama -- our phone is 205-879-2447 and we can see if we can help you.

Best wishes and be careful!

John Watts