Here is a transcript of consumer protection related questions and answers we covered in our live webinar on November 20, 2015.
We hope you find these helpful — please continue to submit questions to us and we’ll do these live webinars again.
Let me go over the questions that we’ve received ahead of time.
The first one is, “If I’m sued can a collection lawyer make my husband leave the court room?”
Then we have, “How can a court accept or allow a lawsuit for debts when the statue of limitations has expired?”
Then, “What is the statute of limitation on car loans?” This is where somebody is sued by debt buyers such as Auto Vest, or Cascade Capital.
Then we have, “Is it possible to win a National Collegiate lawsuit?” That’s a student loan type of case.
Then, “Why did National Collegiate Student Loan Trust sue my dad who was a cosigner on my student loans?”
The final one is, “How to stop a debt collector who is calling, but they’re really looking for somebody else”.
Those will be our questions, we’ll run through those.
We’ll go ahead and get started.
First question is, “If I’m sued can the collection lawyer make my husband leave the court room?”
The short answer is yes, or at least usually. You’ve been sued, you’ve filed your answer, you’re now in court whether it’s small claims, or district court, or circuit court, and there’s some debt buyer that’s there. It could be Midland Funding, Portfolio, Calvary, Unifund, whoever it may be, and the lawyer notices that your spouse is there with you. They may want to separate you just for psychological purposes to try to bring pressure on you so that you won’t feel comfortable. Then maybe you’ll panic, or maybe you’ll get real nervous and ultimately pay them money that you don’t have to pay.
There is a concept of “the rule.” That simply means that anybody that could be a potential witness can be forced to leave the court room so that they’re not listening to the other testimony, and that’s not influencing them. Now, I’ll say this. The collection lawyer probably has no intention of calling your spouse, but they may do that just to make your spouse leave.
What’s the solution? The solution is if you’re going to handle this on your own, and you have five options when you’re sued by a debt collector, we have all sorts of videos on those. If you’re going to handle this on your own just understand that first of all unless your spouse is a lawyer, he or she cannot speak in the court room, cannot ask you questions, can’t make arguments to the judge, and they may not even be able to be sitting in there while you’re trying your case. It is not a reason to pay the debt collector to pay money just because they’ll make your spouse leave, but you need to be aware of it so again it’s not a surprise, and it doesn’t get you off balance when you are there trying to get ready for your trial.
Our next question is, “How can a court allow lawsuits for debts when the statute to limitations has expired?”
A great question. A lot of controversy over, “Well what is statute of limitation Alabama? Is it three years, is it four years, is it six years, what is it?” Well whatever it is, there are many lawsuits that are filed that are after the statute of limitations has expired. The person who asks this question is going, “What are the courts doing? Why do they allow this to happen?”
The simple answer is that when you’re sued in a state court, the state court judge is expecting you, the defendant, to raise as a defense the statute of limitation. Midland, Portfolio, whoever it is, boom, they sue you, well you’ve got to file your answer and say, “Hey, Judge, the statute of limitations has expired.” Now, there are other defenses to put, and really between you and me the statute of limitation is not nearly the best defense that you have, but it’s a valid defense.
Now, let’s talk about these debt collectors that they sue you after the statute of limitations has expired. Then normally we can sue them in federal court for doing that. Go back to the question, “Why do courts allow this?” Well, the state court is going to allow it, but you need to file your answer, or get a lawyer to file your answer and raise that statute of limitation, and then prove it at trial. Another way to stop it is you sue these guys in federal court. You sue them for the only thing that matters to them, money. Money damages.
That will get their attention, that will get them to go, “Huh, maybe we shouldn’t do this in Alabama because the amount of money we’re paying out is more than we’re getting in filing these bogus lawsuits after the statute of limitations has expired.” Hopefully that answers that question.
Our next question is, “What is the statute of limitation on a car loan?”
Here’s what the person means by that, you have a car loan and the car company says, “You defaulted on that loan.” They might have been with Santander, City Bank, Cap One Auto, whoever it may be. Now some debt buyer, Auto Vest is a big one, Velocity Investments, Cascade Capital LLC, that’s kind of a new one for us in Alabama, at least in terms of the volume that they’re now filing.
They come along and sue you, and they typically will sue well after the statute of limitations, so let’s talk about this. On a car loan, not every car loan, but almost every car loan that we see anyway, statute of limitations is actually four years. In Alabama typically a breach of contract is going to be six years, but these car loans are governed by a different loan. Normally it’s four years, well when does that four years start?
It normally starts when you miss your payments, and it certainly starts when they repo the car and they say, “Hey it is all due right now. You can’t keep making payments every month starting this month, and this month, and this … no. It’s all due right now.”
Well, then if you don’t pay it right now then that’s going to start statute of limitations. Typically here’s what we see, we’ll have a lawsuit, let’s say Cascade files a lawsuit in October 2015, you may now just be getting served with it. It will be for a repossession from back in say 2008. After the repossession then they sell the car, then they write you a letter that says, “Hey, you owe fifteen thousand, we sold your car for five thousand, so you owe us ten.” Well, statute of limitations really would have started before than, but certainly at that point it starts. You’ve got four years, they need to be suing you in 2012, not 2015. What does that mean?
It means you have a valid defense, say, “You sued me too late.” Now again, with Autovest, Cascade, the other defenses, you don’t even own the debt. You’re this debt buyer, you’re suing me, you claim you owe it, or own it, but you really don’t own it. Or they’ll say, “Oh yeah, yeah, we know we own it,” and then they come to court and they don’t prove it.
I don’t really care whether they owned it and they just refused to prove it, or they never owned it and they could not prove it, it really doesn’t matter to me. The point is when you sue somebody you have to prove your case. You’ve got that defense, you’ve got statute of limitations defense, and then what you do is you look at suing them in federal court. Again, money damages, that’s what will get their attention and get them thinking, “Maybe we shouldn’t do this in Alabama.” If you’ve been sued by Auto Vest, Velocity Investments, Cascade Capital, there’s a whole bunch of these places, and it’s on a car loan, definitely check out your rights on that.
Okay, our next question, actually next two questions are with national collegiate.
The first question is, “Is it possible to win a National Collegiate case, or National Collegiate Student Loan Trust case.”
Sometimes you see it worded one way, sometimes the other way. The answer is yes. Any of these cases it is certainly possible, and it may even be probable, to win these cases. You never borrowed money from National Collegiate, or National Collegiate Student Loan trust 2006-4, whatever they describe themselves as.
You borrowed it from Charter bank, or Bank One, or whoever it is. Then that bank supposedly transfers it over here, and they transfer it to some place called Marble Head who transfers it to NCO, who transfers it. There’s all these different steps in the way, well they have to prove this. They’ll send somebody from NCO, which is a huge debt collector and they’ll say, “We are the custodian for National Collegiate Student Loan trust 2006-15,” or whatever.
“Really? You’re the custodian? What personal knowledge do you have?”
“Well um, this is what I do I go around and say I have personal knowledge.”
Have they proven that who you took the loan out, that went here, here, here, here, ultimately ends up with National Collegiate or National Collegiate Student Loan Trust, and can they prove they are entitled to the money?
If they can do that, then they win, unless you have a valid defense like statute of limitations.
A lot of times they don’t do that, they won’t do it, they can’t do it, again, I don’t really care. The fact is, when you’re in court the time to talk is over. The time to prove is now, in court. They don’t do that, they lose.
As you can imagine if you lose one of these cases that’s a lot of consequences. Credit reports, what do you do when a bogus lawsuit has been filed against you? Do we go sue this company in federal court? Bottom line there are all sorts of consequences.
Now the follow up or not really follow up, but I guess the related question is, “Why did National Collegiate Student Loan Trust sue my dad who was a cosigner on my student loan?”
The short answer is, they would rather have two people to try and get money from, rather than just one. The theory is if we have the student here, and the parent is forty, or fifty, or however old, sixty years old when the students taken out that money, they’re probably in a better financial person than the student who’s maybe eighteen, nineteen years old and just starting their education.
The ideas, the parent is probably higher net worth, they’ve got more assets, maybe they have a better job, we see so many young people that they maybe have a hundred thousand, a hundred and fifty thousand in private student loans, and they’re making twenty four thousand dollars a year. That’s two thousand a month without any taxes, any deductions. Two grand a month, there’s no way you can service a hundred, a hundred and fifty thousand dollars worth of debt.
Your parents might be making six thousand, ten thousand a month. They get sued and lose twenty five percent of their wages being garnished, it’s a lot of pressure. That’s why they would sue the cosigner. Usually it’s a parent, sometimes it’s a sibling, a lot of times it’s even a grandparent.
Grandparent may only get social security, which they really can’t touch, but maybe your grandparents have a house that’s paid for. Well, it will put a lien on that house, they can even sell that house.
Our final question is, “How do I stop a debt collector from calling me when they’re really looking for somebody else?”
It’s a great question, and it’s something that we get quite a bit. Here’s my cell phone, I’m getting a call, and I look down at it, I go, “I don’t recognize that number,” so I answer it, and they go, “Yes, we need Josh Smith.”
“Well, I’m not Josh Smith.”
Then they go, “How do we know you’re not Josh Smith?”
“Well, I mean I know I’m not Josh Smith, and I’m telling you I’m not Josh Smith, my name is John Watts.”
They go, “Yeah, but you know a Josh Smith.”
“I don’t know.”
They go, “Well we got this number somehow, you’re responsible to help us find Josh Smith.”
“I don’t know a Josh Smith.”
Then ultimately you end it by saying, “You know what? Don’t ever call me again.”
That’s annoying, and you probably don’t make a note of it because you think, “Well it’s never going to happen again.”
Maybe the next hour, the next day, phone rings, you look down at it, you go, “Wait a minute, that’s that place that called me before.”
You answer it, they go, “Yes, Josh Smith.”
You’re like, “I’m not Josh Smith, I think we had this phone call yesterday.”
They go, “Well our information is that you are Josh Smith.”
“I’m not, you’re wrong. My name is John Watts, I’m not Josh Smith.”
They keep calling, and calling, and calling, and how do you stop it?
Well some people will put an app, or somehow block that phone number. They’ll just get another phone number to come around that app or that block.
Here’s the real solution to it — you sue that company in federal court. When they get sued, they get this lawsuit, they get it in their hands and it says, “Continued to call the plaintiff and plaintiff told them they had the wrong number. Continued to call over, and over, and over, and over.”
They say to themselves, “Oh wow, we’ve gotta go hire a law firm,” so in Birmingham Alabama, that’s typically Bur Forman, or Neal Moore is a lawyer that defends these. Balch Bingham sometimes defends these around the state, there’s four or five lawyers that defend these around the state.
The abusive collector says, “Okay we’ve gotta go hire those lawyers, we’ve gotta pay them money, and if we lose we’ve got to pay the consumer more money, and if we lose we’ve gotta pay the consumers lawyer money.”
That tends to motivate them, get them thinking to go, “You know, maybe we should first stop calling this consumer who’s now sued us, and second, why don’t we make this thing right? Let’s go make them a fair offer to compensate them for what’s happened.”
That’s fine, that’s the way it’s supposed to work. Now sometimes they don’t do it, and hey that just makes the amount they have to pay more and more. Here’s what’s really is supposed to happen.
They’re supposed to have this thought and go, “You know, when we call people in Alabama, and we get the wrong person, and they tell us we got the wrong person, maybe we should stop calling them. Maybe we shouldn’t keep blowing up their phone two, three, four, five, six times a day for the wrong person.” You see that they called your cellphone that may mean they violated the TCPA, telephone consumer protection act, which can be five hundred dollars or fifteen hundred dollars per call.
They’ll also violate the FDCPA, Fair Debt Collection Practices Act. You want them thinking going, “This is really getting expensive, I’m going to have to keep pay out all this money. Maybe we should stop doing this.”
That’s the whole point of the law, is to protect you and to protect the collection agencies, the debt collectors that do follow the law. It’s really not fair for, let’s say Portfolio Recovery. If they keep calling you, and calling you, and calling you, that’s not fair to XYZ, collection agency that they call you, you say, “You’ve got the wrong number,” they go, “We’re so sorry, we’ll never both you again.”
Portfolio, or whoever is breaking the law, they get this great competitive advantage because they’re breaking the law. When you sue them and they have to pay out money, we’re trying to take away that competitive advantage and say, “No, no, no. You do not want to do this, stop. Follow the law.”
Listen, I hope that this has been helpful.
You can reach out to us directly, our phone number is 205-879-2447, and we’ll look forward to doing this again and please keep the questions coming, that’s how we get these questions. We appreciate it, and if I can ever be of help to you, our main website is www.AlabamaConsumer.com, and you can also call us at 205-879-2447 and ask to speak to Carolyn, she can take down your information, figure out what’s going on, then she’ll set up a call. Sometimes we need an in person meeting but usually we can do it by call so it’s very convenient for you. Hope you have a great weekend, and thanks for watching. Okay, bye.