2015-09-25 Debt Collection Q&A with Attorney John G. Watts




Welcome to our webinar on debt collection issues. The video is above, and the full transcript is below.

John G. Watts


My name is John Watts, and I want to welcome you to our, a normal Friday Q & A webinar. We’re going to answer some questions about debt collection suits and dealing with debt collectors. This particular area is one of the most common area of questions we get because there are just simply so many collection lawsuits out there.

We talk about this in other videos but take a company like Midland Funding. They file a hundred lawsuits in Alabama every week. It’s an amazing how many lawsuits are filed. We’ve got five questions that we will cover in this segment.

I’ll just start with the very first one. Can you be sued in a different county than where you currently live?

It’s a great question because in this society, we might start off over here, and then we move over here, and then we move over there.

Where are you supposed to be sued?

If we’re dealing with a consumer debt, that’s something that’s covered by the FDCPA – The Fair Debt Collection Practices Act. Then, you can only be sued in a county where you live or the county where you took out the credit card, the medical bill, or whatever it might be. Whatever that kind of underlying debt is that you’ve been sued on.

I’ll give you a recent example.

A lady took out a debt in Madison County.

Then, she lived in Lauderdale County for a little bit and now, it’s in Jefferson County. They sued her in Lauderdale County.

Is that proper or improper?

It’s not where she lives.

Now, when she’s been sued and it was not where she created this debt, so that would be an improper county.

What does that mean?

Under the FDCPA, talking about a debt collector here, that’s improper. If they sue you in the wrong county, then that’s a violation of the FDCPA. It could be that they have a valid reason for doing that, but it is a violation and so we look at kind of the whole spectrum and say, “You know, if they’ve done everything else right but they sued us in the wrong county and it’s a very understandable mistake, do we do anything about it?”

Typically not, but if they sued you on the debt you don’t owe, and they come to court they have no proof, and they do false credit frauding, and they do this and they do that, and they sued you on the wrong county, absolutely, you just stack this on top of each other. they’re just doing one violation after another.

It definitely is a violation.

They pursued in the wrong county and please keep in mind, Alabama courts have their own rules about where you can be sued, and where you cannot be sued. They don’t always line up perfectly with the Federal Court. In Alabama Court, we might say we have more options on where to see.

Under this federal law, the FDCPA, a debt collector has to comply with that. If they want to ignore it, that’s fine but then they can’t whine about, “I can’t believe we got sued and how terrible.” You know, you knew you’re violating the law so deal with it.

Our next question is, what is the difference between Circuit Court, District Court and Small Claims Court?

Circuit court is our big court. It’s a court where you can be sued for a million dollars or billion dollars, and that’s where we have jury trials.

Typically, we’re seeing cases that are around $10,000 or above, get in Circuit Court. That’s the High Court. Beneath that, is what’s called District Court, and that goes up to $10,000. There’s no jury trial in that. Then, beneath that we have something called Small Claims Court to it.

Circuit Court, District Court, Small Claims Court. It used to be, I think, $3,000 was the limit and now it’s been raised up to I think $6,000. Typically, the judge in Small Claims and District Court, same judge, same courtroom.

There are some different rules. Small Claims rules are a little more relaxed. The District Court with the same rules as far as evidence as in Circuit Court.

Now, the big difference is, in Circuit Court you can do what’s called discovery and the collector against you can do a discovery. Interrogatory or request for production or request for admissions, depositions.

We talked about those in other videos.

In District Court, it’s pretty rare that that ever happens. In Small Claims, absolutely no discovery, and that’s the difference.

If you are sued in Small Claims or District Court, and you’re unhappy with the result, you can appeal it to Circuit Court and it just starts completely from scratch, as if what happened here in Small Claims or District Court never happened.

Hopefully that helps you to get a little bit of perspective about the courts. Again, we have lots of other videos that get into details about, if you handle this on your own, how do you handle it on your own? Actually, I have a whole video series on that.

Our third question is, what do I do if I find out my bank accounts have been wiped out by collection law firm?

This question came from somebody that this happened to over the holiday weekend.

They’re having a great time. All of sudden on Monday, boom! Bank accounts are wiped out.

What in the world happened?

The very first step is, you look and say, “Okay. Do I have a judgement against me?” Maybe there’s a judgement way back here in 2005, 2010, even earlier than that. Now, here we are in 2015 and boom! It pops up for the first time.

You never knew about it because you’re never served. You’ve got to know, is there a judgement? You look that up, you call the court. If your bank account’s been garnished, typically your bank will have an indication of which court case that came from. You call the court.

Over in Alabama, you can contact us. We’ll look it up for you. My phone number is 205-879-2447. You can ask to speak to Carolyn in my office and she’ll be glad to look that up for you.

Is there a judgement? If there is, were you served? Did you, under the definitions of the rules, did you get a copy of the lawsuit and did you get it in the right way? That’s normally, it’s personally delivered to you, certified mailed to you or they give it to an adult who lives in your house where you live at the time that those papers were handed.

Typically, that means you’ve been served validly. If you were not served and particularly if you never knew about this, until you get garnished, well then, you attack that service. If you can make that service go away, well then, it’s almost like here’s the judgement, it rests on top of you being served. If you pulled the service out, and you show the court, “Hey. I wasn’t served.”

That judgement just falls apart. It doesn’t make the lawsuit go away. Lawsuits still out there. You’ve got to deal with the lawsuit, but you’re in a much stronger position. Now, you have the opportunity to defend yourself, you’re not being garnished, your wages, your bank account.

That’s the number one step. What if you say, “You know, I remember being served. I just ignored them.” That’s going to be very difficult, if not impossible to attack that service, so this judgement stands. What do you do now? You can look a file in bankruptcy. You can look at doing a lump sum settlement. You can do a monthly settlement with them, with the collection law firm.

Now, you can do that on your own or you can hire a lawyer. We’re not going to get into all those details in this, sort of a contacts of this webinar. Let me just say this, a long times you do this on your own, you just need to have a plan.

You need to know how you’re going to negotiate and make sure whatever deal you get is actually honored by the collector. We’re talking about this in other contacts I used as example because it comes up nearly every week.

Say there’s a $5,000 judgement, you talk with the lawyers, they say, “Hey. If you pay us three, we’re done.” You’ll go, “Great.” You pay them $3,000 and then six months, either they come after you garnishing $2,000. You got away, “I was done.”

They go, “No, no, no, no. You just pay $3,000.” There was 5, you pay 3, so now you’re 2. You say, “No, no, no. It was a settlement.” They got words to prove for that. You go, “Well. We’ve got a conversation.”

Look, if that happens, you may still be able to sue the debt collector for lying to you if you’ve got sufficient proof, but the safe thing to do is have this in writing. Make sure, if you do that on your own, make sure you negotiate a good deal and then underneath that, you get it rock solid.

That is just rock solid. There’s no question about what the deal is or is there any misunderstanding down the road. Of course, you can hire a lawyer.

If you’re in Alabama or this is a judgement in Alabama, you can contact us. We’ll be glad to give you options. Normally, what we do is, if we know we’d been served, then we will look at your situation, give you a quote as far as a fee and then usually, if we cannot get it settled, then you don’t owe us that money. I’m not sure if I’ve ever done it differently actually, but the idea is you’re going to pay us that money if you get settled.

Now, if it’s an invalid service where we can attack that judgement or try to or that service to pull that service away so judgement falls. Now again, we’ll give you a fee and that maybe you pay us out whether we’re successful or not, because we’re doing a certain amount of works.

We’ll give you different options if you want to talk with us as far as having a lawyer will help you.

Our next question, this is our next to last question. What happens if I ignore the Nathan and Nathan lawsuit they filed for NCSLT?

Now, can we just define a couple of terms. Nathan and Nathan is a large Birmingham collection law firm and NCSLT is the National Collegiate Student Law Trust. To my knowledge, Nathan and Nathan is the only law firm in Alabama. As of September 25th, 2015, they’re the only law firm in Alabama that actually files the National Collegiate Student Loan Trust cases.

The question is, what if I ignore it? What if I ignore the lawsuit? Am I even back up if I can? What if you ignore the collection letters from on National Collegiate Loan Trust. Typically, you’re going to get sued.

Maybe this happens I don’t know about, but I don’t know if Nathan and Nathan just repeatedly sending our collection letters and you ignore them and they go, “Okay. Well, we’ll just drop it.”


They tend to sue.

They file a lot of lawsuits every month. These are not $3,000, $4,000 lawsuits. These are $20,000, $50,000, $150,000 lawsuits, private student loans.

If you ignore it, you’ll get a judgement. I can’t tell you the number of people come to my firm.

They go, “I saw something on the news. They said they couldn’t sue on student loans, or this National Collegiate Student Loans is not a legitimate place or Nathan and Nathan’s not a real law firm, and so I just ignored it because they can’t touch me.”


They can touch you.

And go and touch your bank account, garnish your wages. These big judgement just keeps growing and growing and growing every year with interest. Let’s talk about, is Nathan and Nathan a legitimate collection law firm? Absolutely. They’re licensed lawyers, they’re real lawyers.

I’m going to let you read on the internet, but they are a legitimate law firm and they file lawsuits and they show up to court. What about National Collegiate? Somebody says, “Well, I heard that place is kind of you know, a little sketchy.” You know, I agree. I agree.

I have some very serious concerns about the legitimacy of National Collegiate Student Loan Trust. They come in and they say, “We own your debt. We bought your student loan from charter 1 or charter bank or Marble Head. There’s all these different entities that are involved in this.

It’s kind of like the larger industry. The company, it makes you a loan, they don’t hold on till, it usually starts here, you get sold to this company, it gets sold to this company, it gets put into this trust.

That’s where National Collegiate Student Loan Trust says that, “We own it.” You know, they actually have to prove that. If you fight them, they have to prove it.

Now, if you settle and sometimes that’s the best move, to settle. They have to prove. If you fight them, they have to prove it. I do have some very serious questions about this company, but they do file lawsuits.

They are real lawsuits and you’ve better take them really seriously because if you don’t, they will get a real judgement against you.

Maybe a default judgement, maybe a summary judgement, maybe a trial. If you ignore it, bad things will happen. What’s the solution? Don’t ignore it. We actually have a video that explains this in a little more detail.

We have like a maybe 1 hour and 20 minute video here on everything you want to know a lot more about being sued by National Collegiate Student Loan Trust. You can check that out if you’d like more information.

Last one, “is the collection law firm of Nadler legitimate?”

I get a lot of people that contact our firm and a lot of people from other state, even though we don’t want that. We always say this is for Alabama folks only but you know, let’s just limit it to Alabama people.

A lot of times, people are calling because they’ve been sued or they got a collection letter and they’re saying, “Well, hey. Is this law firm legitimate? What about this? I’d just got this phone call saying, ‘You’re going to be arrested, thrown in prison. We’re going to deport your family.”

You know, what’s going on? There’s a lot of collectors out there that are absolute scam collectors. It’s some guy in his basement with a prepaid cell phone and he’s in Pakistan or somewhere out of the country. Then, there are legitimate companies.

Now, and lastly, they may still break the law.

We see a lot of legitimate companies because they’re law companies but they really break the law. If they’re illegitimate, if it’s a scam company, there’s not much you can do about it.

I mean, you can report it to the authorities but, how do you sue a guy in his basement that has a prepaid cellphone? He’s going to flee the country or he’s already out of the country.

It’s wise to be skeptical.

If you get a letter from somebody saying they’re a lawyer, if you get a phone call from somebody saying they’re lawyers, say, “Look. Send me a letter.”

If you’re holding in your hand, say a letter, across the top it say’s “Attorney at Law” then you need to take that very, very seriously. Check it out. Again, if you’re in Alabama, give us a call, 205-879-2447.

The question is about Nadler.

Are they legitimate?

Absolutely, they’re legitimate.

This is a real law firm. I forget how many lawyers they have, maybe 5 lawyers. They are real law firm and they really do sue. I can tell you with debt buyers , one of the main ones they represent, at least to my knowledge is Calvary, Calvary Portfolio.

It’s called in different things but it’s Calvary. They file a lot of lawsuits. They also file as I recall, a good bit of medical type collection.

I think they also file for Sterling which is like Kay Jeweler but I guess that’s the name of the, official name of the company. They file lots of lawsuits. They show up in court. Now, do I always agree with them?


We’ve had our differences, but this is a real law firm. They’re licensed in Alabama. They file lawsuits in Alabama.

If you ignore them and say, “They’re not legitimate. I’m not going to pay attention to them.”

Then you do that, it’s your risk.

The consequences are typically going to be that you’re holding a judgement in your hand, you’re holding a garnishment in your hand of your wages or garnishment of your bank account or all the above. My point is, they get that judgement against you and then all these bad things start building on top of that.

Should you ignore them?


Are they legitimate?


Take it very, very seriously if you’re sued by this law firm. I know what they’re doing. They’ve been around, and they’ll show up at court. You have to treat them very seriously.

I hope that these questions and answers have been helpful to you. If you will continue to submit questions to us, you can do it below on a comment.

You can put a comment on our website Alabama Consumer. You can call us 205-879-2447 also and we’ll be happy to add your questions to the list.

Again, my name is John Watts. I may not have said that at the beginning. My name is John Watts, a lawyer here in Alabama and represent people all over the state of Alabama. We have an office in Birmingham.

We have an office in Madison, the Huntsville area and we also represent people in Moville , Montgomery. Really, anywhere in the state, we’ll represent you.

We will be glad to help you. If you have questions or there’s something we can do for you, Alabama Consumer or 205-879-2447.

Hope you have a great day!

-John G. Watts

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