In this well reasoned opinion, a united Alabama Supreme Court rejected these arguments and said, in effect, “Hey guys — you wrote the contract (mortgage) — you have to follow it.  You can’t make up stuff as you go along.”

(Congratulations and thanks to Earl Underwood and Ken Riemer of Mobile for handling this case!)

You can read the opinion here in a pdf format and we will copy some of it below with our comments.

In Jackson, Wells Fargo foreclosed on the property but the homeowners said this was an improper foreclosure.

The most important part of the initial financing transaction (note/mortgage) is paragraph 22 of a standard Fannie Mae or Freddie Mac mortgage:

“22. Acceleration; Remedies. Lender shall give
notice to Borrower prior to acceleration following
Borrower’s breach of any covenant or agreement in
this Security Instrument …. The notice shall
specify: (a) the default; (b) the action required to
cure the default; (c) a date, not less than 30 days
from the date the notice is given to Borrower, by
which the default must be cured; and (d) that
failure to cure the default on or before the date
specified in the notice may result in acceleration
of the sums secured by this Security Instrument and
sale of the Property. The notice shall further
inform Borrower of the right to reinstate after
acceleration and the right to bring a court action
to assert the non-existence of a default or any
other defense of Borrower to acceleration and sale.
If the default is not cured on or before the date
specified in the notice, Lender at its option may
require immediate payment in full of all sums
secured by this Security Instrument without further
demand and may invoke the power of sale and any
other remedies permitted by Applicable Law….”

Wells Fargo sent an acceleration letter but did not send a letter notifying the homeowners in compliance with paragraph 22 quoted above.

At this stage in the litigation, there remains a
fundamental failure of communication between the parties as to
the function and effect of the acceleration letter. Although
the Jacksons maintain that the acceleration letter was not the
notice of intent to accelerate the debt required by the
mortgage, the bank and the trustee tout it as evidence that
they satisfied their duty under the contract. We agree with
the Jacksons.
The parties’ confusion centers on the difference between
notice of actual acceleration and notice merely of intent to
accelerate.

After going through a good bit of legal analysis of cases in and out of Alabama, here is what the court held that is very helpful to Alabama homewoners:

The “Fannie Mae/Freddie Mac Uniform Instrument” mortgage
form in this case contained the species of provisions
referenced in the excerpt from Real Estate Finance Law quoted
above. Specifically, paragraph 22 of the form required the
bank to give the Jacksons a notice — before acceleration –
that it was considering an acceleration, upon the failure of
certain conditions, in “not less than 30 days” following the
date of the notice. In other words, the debt could not be
accelerated until at least 30 days had passed and the Jacksons
were still in default. Under the language of this mortgage,
without proper notice of intent to accelerate, acceleration
fails and, consequently, so does the foreclosure sale. See
Sharpe v. Wells Fargo Home Mortg. (In re Sharpe), 425 B.R.
620, 643 (N.D. Ala. 2010).

The acceleration letter is just that — a notice that the
debt had been accelerated, not a notice of intent to
accelerate. The only option it contemplates is payment of the
entire debt, an approach in direct contravention of paragraph
22. Thus, the Jacksons have provided substantial evidence
that essential notice under the mortgage was not given,
resulting in failure of the acceleration, and, consequently,
failure of the foreclosure sale conducted on August 15, 2008.
The trial court’s judgment, to the extent it summarily
disposed of the breach-of-contract claim, was improper.

Here is the bottom line for Alabama homeowners who have faced a foreclosure, or facing a foreclosure:  you must look at your note and mortgage.  See what the mortgage companies have promised to do and not do.  They buy and sell so many of these loans that often they aren’t concerned with the details but the details control you, and whether the banks like it or not, the details control them.

Does your mortgage contain a similar requirement to give you notice before accelerating the note?

If so, did you get that?

If you did not, and there has been a foreclosure, you may have rights to file suit against the mortgage company.  If you did not get the notice and a foreclosure is planned, you may have the right to sue before the foreclosure and see if the mortgage company will stop the foreclosure.  You can find lots of articles and videos on our website here under the Alabama foreclosure area.

If we can provide you any information, please call us at 205-879-2447 or contact us through our website and we will get right back to you.

Steve:  We’re joined by John Watts from the Watts Law Group. John is here to tell us about our rights and what to do if you’re being harassed by a bill collector. There are some rights you have that the bill collectors may not want you to know about.

Hello, John. Welcome to the Steve and Leah Show.

John:  Good morning. I appreciate you having me.

Steve:  What constitutes harassment? If I owe a debt and I legitimately owe the debt and they’re calling me and saying, “Hey, Steve, we need a payment,” at what point does that become harassment?

John:  It becomes harassment when they are calling so often that it’s just over and over. For example, if they’re calling four or five times a day, that can cross the line into harassment.

If they start threatening you, saying, “We’re going to put you in jail. We’re going to call your neighbors and co-workers,” that would become harassment.

If they start lying to you, that would be harassment.

Leah:  What if they call me at work? If they call me at work and I’ve told them, “I don’t want you calling me at work,” they’re not allowed to, are they?

John:  If you say, “I’m not allowed to receive these kinds of calls at work,” and then they call again, that violates the law. That would be harassment.

Steve:  Let’s say you legitimately owe the money and maybe you’re unemployed or your situation has changed and you can’t meet that obligation. I understand when it becomes harassment now, based on what you’ve told us, John.

What recourse do they have? Can they sue you? If you say, “Don’t call me at work. You’re bothering me. I owe you the money, but go away,” what might happen?

John:  You can tell them to go away and they can’t call you or contact you.

Steve:  But they can sue you, right?

John:   They can sue you. They have that right to sue you, and that’s something consumers need to think about when they send what’s called a Cease and Desist letter. It’s a letter saying, “Don’t ever contact me again.” You may provoke them to sue you.

Steve:  I think therein lies the intimidation with a lot of folks. You don’t want to force their hand. You want to avoid that suit if at all possible, but at the same time, you don’t want to be harassed by these people. Many times, we just take it because we don’t think we have any other option.

Leah:  John, what do you call debt that is really old and is out of the statute of limitations, maybe doesn’t even belong to you, but it keeps getting sold over and over to different credit agencies? What do you call that?

John:  Zombie debt. It’s like the late-night movies where the thing keeps coming back to life.

Leah:  It keeps rising up to hurt you.

Steve:  But if the statute of limitations has expired, how is it even relevant?

John:  If the statute of limitations has expired, they can’t sue you or threaten to sue you. They can still keep it on your credit report, but only up to seven years.

What these people will sometimes do is call re-aging. One company will have it. It gets close to that seven years. Then they sell it to another company and that new company says, “Here’s the start date.” Now you have to go another seven years. It’s illegal for them to do that.

Leah:  Zombie debt is a huge problem, isn’t it?

John:  Yes.

Leah:  It keeps coming up over and over. How do you solve that, and who do you sue?

John:  You have to dispute that with the credit bureaus. That’s Equifax, Experian and TransUnion. If they get it off, great. If they don’t get it off, then you have three options: You can do nothing, you can dispute it again, or you can sue them. You sue the collection agency and you sue the credit bureaus that are keeping that false information on there.

Steve:  If we legitimately owe this debt but we can’t pay it right now, what is the best course of action to take?

John:  I think the best course is to maintain those lines of communication. Talk to the original creditor. If you’re dealing with a collection agency, talk to the collection agency. We all do this. Something bad happens and we just say, “I want to ignore that.”

Leah:  I’ve never done that.

John:  Me, either. It tends to produce bad results. We want to talk to them, but also we want to know what our rights are. There are a lot of legitimate debt collectors, but there are abusive debt collectors.

The ones who are abusive are banking on the fact that you don’t know what your rights are. They can cross the line. They can be overly aggressive and you won’t know they’ve done anything wrong.

Steve:  Give us an overview, almost like our Bill of Rights, in terms of what we should expect.

John:  When we’re dealing with a debt collector, I’ll just say three things. First, they should never lie to us. They can never lie in collecting the debt. If they say, “Steve, we’ve already sued you,” and they haven’t, that’s a lie. If they say, “We’re going to garnish your wages tomorrow,” and they haven’t sued you, that’s a lie.

The second thing is they can’t be unfair. That’s sort of a vague statement, but it’s also whatever strikes you in your core as being unfair. An example would be calling your neighbors or calling your ex-mother-in-law to say you owe this money.

When they call your neighbors, that’s called a block party. When they call your co-workers, it’s called an office party. They have names for this stuff.

Steve:  I’ve had calls before from collectors looking for other people. They want information about those other people. They will call me because somehow I’m on the list of people who may know.

Leah:  You may be the block party.

Steve:  Where does that fall into this?

John:   When they call somebody other than the person who owes the money, they can only ask for three things: the person’s home phone, home address, or place of employment.

Steve:  That’s it.

John:  That’s it. Now, they’ll often ask for other stuff. They’ll say, “Can you give a message to Bob? Can you have Bob call?” That’s not one of those three things. That’s illegal. They do it because it’s intimidating.

Imagine, you’re sitting there having dinner. There’s a knock on the door and it’s your neighbor from across the street. They say, “You need to call this guy.” A few minutes later, another neighbor comes and says, “You need to call this guy.” You start feeling the walls close in on you. You say, “I have to pay this debt.”

We don’t have any problem with legitimate debt collection, but when it goes over the line, it violates the law, that’s when it becomes a problem.

Steve:  Can they call your workplace if you haven’t told them not to call your workplace? Could they call Clear Channel, where we work, and make whatever effort they need to make to collect the debt? Is that within the legal bounds of what they’re entitled to do?

John:  They can call our work and ask to speak to us. Again, they can’t reveal that you owe a debt. If you tell them, “Look. I’m not allowed to receive these kinds of calls at work,” and they call again, that violates the law.

Steve:  By the way, if anyone listening is owed money by Steve Shannon or Leah Brandon…

Leah:  We’re not here.

Steve:  What I was going to say was I just use Clear Channel as an example. We actually work for Cumulus Broadcasting. That’s where you would find us, just so you know.

Leah:  Please make a note of it.

Steve:  Did we work our way through the three Bill of Rights points that we need to make?

John:  They can’t lie. They can’t be unfair. The third thing is they can’t treat us with a lack of respect or dignity. They can’t use profanity against us. This is a favorite of northern collection agencies when they call those of us in Alabama. They’ll say, “You’re just a dumb, inbred redneck.” That’s treating somebody with a lack of respect.

Steve:  Don’t make me have to go up there. Those are fighting words.

John:  They are. The idea is to provoke an emotional response to get us scared, embarrassed, angry and mad. When we get emotional, we’ll do things without thinking. Sometimes they can make people so mad. They’ll say, “You can’t afford to pay this,” and the person says, “I’ll show you! I’ll pay it right now.”

As silly as that sounds, their idea is to get you mad, angry, embarrassed or scared.

Steve:  It works. The collection agency is successful if, at the end of the day, they collect on the debt. That’s a successful day.

John:   Yes.

Steve:  What do we do? What recourse is there if we’ve experienced anything even close to those red flags you pointed out? What are we supposed to do?

John:  There are a couple of things to do. You want to gather information so if you have a phone call from a collector, make a note of that.

Steve:  We’ve got to be able to prove all those things you just said, right?

John:  Right. You want to be able to prove it, so make notes of the conversation. Take a photograph of your caller ID if it shows eight calls today from this one number.

Steve:  We can’t tape the calls, can we? That’s illegal.

John:  We don’t recommend it. If you are going to tape them, just make sure that you tell the other person, “I’m taping this call. If you want to keep talking to me, I’m taping it.” That’s okay.

Leah:  That’s probably a good way to blow them off.

John:  Yes. A lot of times, it is.

Leah:  Even if you’re not taping it. Say, “I’ll be taping this call. Go ahead, please.”

Steve:   Throw in an occasional “beep, beep,” sound. It’s intimidating.

John:  Gather that information, whether you’re taping it or making notes about it. That is the most important thing. Document things. Learn more about your rights. Ask yourself, “Did they cross the line, or is what they did okay?”

The final part is to take action. We can have all the knowledge in the world, but if we don’t do anything with it, then we might as well not know it.

Steve:  A lot of information is important. I know a lot of people are in the car right now. They got some of it. A lot of people are thinking, “I could use this kind of information.” Where can anybody go to get more?

John:  They can go to our website, www.AlabamaConsumer.com, or they can call my office at (205) 879-2447.

This afternoon, we’re having a teleseminar. It’s free, and I’ll talk for about an hour on this subject. They can call my office and get the call-in information. We’d be happy to have them join us for that.

Steve:  We’ll link all that up at www.SteveAndLeahShow.com to make it easy.

Are you seeing an increase in this kind of activity and consumers complaining because of unemployment and a lot of people in dire straits?

John:  Sure. With the economy, there’s more delinquent debt, but there’s fewer dollars to pay that. If you’re a debt collector, you have a choice to make. “Do I collect within the law or do I go beyond the law, shout a little bit louder and get paid?” That’s the temptation that these collection agencies face. They think, “I’ll violate the law because I have to get this person’s attention.”

Leah:  If they don’t get money, they usually don’t get paid at all, right? Aren’t they paid on commission?

John:  Yes.

Steve:  They’re highly motivated. How many of you owe some money and you’ve gotten a call from somebody who says, “You owe X number of dollars, but if you’ll pay today, we’ll settle for this amount,” and it’s less? When you get that kind of call, should you go with it, or are you falling into a trap?

Leah:   Do you give them your credit card number?

Steve:  If you do, can they just go in and take it all? It brings up a lot of questions.

John:  I’ll answer it this way. I get emails that tell me that the daughter of a Nigerian general has $50 million she wants to run through my account and she’ll give me 10%. I haven’t seen that money yet. Occasionally, there are scams out there.

I always tell people to be very careful if you get a phone call or even a letter from somebody. Even thieves can call. Even thieves can write letters. Be very careful about who you give your money to. Make sure that this person really has the right to collect that debt.

Ask them to send you something in writing. The legitimate ones will. The ones who are not legitimate will say, “No, we can’t do that. It’s for today only. You have two hours to make a decision.” I would be very skeptical of that.

Leah:   Tell me something. What’s to keep these debt collectors from buying old debt and going out there, outside the bounds of law, no company or whatever, making phone calls and getting money?

Steve:  If Vinnie calls and threatens to break your kneecaps, get in touch with John Watts at the Watts Law Group, www.AlabamaConsumer.com.  Good information. We appreciate it, John. By the way, John was a radio virgin. This was your first radio experience.

Leah:  You did really good.  You did a great job.

John:  You guys made it easy.

Steve:  Very nice. You’re no longer a radio virgin. Now you can go outside and smoke a cigarette with Leah.

John:  Bye.

Who has them.  In default or current?  How much do we owe?

You need your PIN to get the information.

You can go to the official “Federal Student Aid PIN Web Site” to start the process.  Click on the “APPLY NOW” button.

The first step is to apply for a PIN.  You’ll need to put in a lot of personal information and then either select a PIN (4 digit number) or one will be created for you.

The second step is to submit your PIN application.  You’ll need to promise not to share it with anyone.

The final step is you’ll get a confirmation number and then once your information is verified, you can use your PIN at the locations listed here.

The most useful one will typically be at the National Student Loan Data System Web Site where you can see your history and the status of your loans.  You’ll typically see a list of all of your loans and then you can click on each one to “drill down” to see more about the amount owed, the history of the loan, the status, and who is handling your loan (servicer, lender, guaranty agency, etc).

Once you have this information, then you can start figuring out where you want to go with your student loans and what options you have available.

So what exactly is a foreclosure defense attorney and what can he or she do for you in Birmingham?

Broadly speaking, a foreclosure defense attorney will advise you on your various options to stop a foreclosure.

Being a little more specific, a foreclosure defense lawyer can advise you on what your options are to stop or delay a foreclosure when the mortgage company has done nothing illegal to you and also a foreclosure defense attorney can advise you on how you may can stop an upcoming wrongful foreclosure in Alabama.

Let’s look at each of these in turn.

If the mortgage company has not committed any illegal acts against you, which would be somewhat surprising given their nature which almost compels them to break the law, then you may very well have the option of filing for bankruptcy in the Federal Bankruptcy Court which is located in Birmingham.

There are two basic types of bankruptcy.  Chapter 7 and Chapter 13.

Under normal circumstances, each type of bankruptcy will create what is known as “an automatic stay” that will prevent any creditor from taking any action against you until the bankruptcy court gives that creditor permission.  This includes foreclosure.

So if you are sitting down with a competent foreclosure defense lawyer, and you are meeting with him or her before a foreclosure, in our opinion the topic of bankruptcy is one that should normally be addressed.  Often it is a poor choice but it is an option for you to consider.

You may also want to discuss with the attorney whether or not a loan modification is possible.  Some lawyers will take a direct hand in trying to modify your loan and other lawyers will advise you on what to do so you can discuss this with the mortgage company.

There may also be letters that can be sent out before a foreclosure to potentially stop the foreclosure.  Certain types of letter to the foreclosure attorney may stop the foreclosure.  Certain types of letters to the mortgage company (the servicer) may also stop the foreclosure.

The reason these letters may stop the foreclosure (at least temporarily) is that you have the right to certain information from the foreclosing law firm as well as the mortgage company that is ordering the foreclosure.  There can be very serious consequences if these companies do not give you this information before they foreclose.

What about if the foreclosure that is scheduled is illegal or wrongful?

You would still expect to hear about the same options discussed above but in addition we would expect any competent foreclosure defense lawyer to advise you of your options of suing the mortgage company or companies that are threatening a wrongful and/or illegal foreclosure.

We often see mortgage companies which have improperly processed your payments.  They may have taken payments but then not properly applied them.  They may have held your payments in a “suspense account” illegally.  They may have charged you bogus fees and expenses.

The mortgage company may have lied about a modification or the modification process.

The mortgage company may be a “debt collector” under the Fair Debt Collection Practices Act (FDCPA) and may have violated the numerous protective laws and rules under the FDCPA.

Whatever the case may be, if you have the ability to sue the mortgage company then we imagine that you would expect to be told about those options and what the advantages and disadvantages as well as the cost will be to pursue a lawsuit against the mortgage company or companies.

I do want to make this point.  Given the foreclosure crisis, more and more lawyers are describing themselves as foreclosure defense attorneys.

There is a difference in claiming to be something and actually being it.

There is even one Birmingham attorney who will tell you in no uncertain terms that he “is Alabama’s foremost authority on Wrongful Foreclosure.” That’s a bold statement.  I would suggest figuring out how to determine if that is accurate.

We have also noticed that there are many lawyers who describe themselves as foreclosure defense lawyers and they have apparently mistakenly used this expression.  What they meant to say in all of their advertising and marketing materials is that they know how to file bankruptcy.

They do not mean to suggest, I would suspect, that they can do anything else.  I think most of the bankruptcy lawyers that I have seen that have used this description would be hard pressed to find the court where foreclosure cases are litigated.  They are undoubtedly experts in bankruptcy but I’m not sure that the expression foreclosure defense attorney is appropriate.  That might be a good question to ask them if you decide to meet with them.

Bankruptcy can be a wonderful option but other times it is ineffective.

Sometimes it does not accomplish what is needed.  Sometimes it is drastic overkill.

Bottom line is if you need, or think you need, a Birmingham foreclosure defense lawyer, then you are facing difficult times.  We suggest that you carefully research your options as deciding on whether or not to hire a foreclosure defense attorney is an important step.

Feel free to watch our videos on foreclosures, read our articles on foreclosures, read some testimonials about foreclosures or read our free books on foreclosures in Alabama.  We have made all of this available at no charge to help you in your research.

We wish you the best and if we can be of assistance to you give us a call at 205-879-2447 or contact us through our website.

There are a number of legal issues that can certainly be handled without an attorney.  Often debt buyer or debt collection lawsuits in small claims court or district court may be appropriate for you to handle on your own.  (See our web site Sued By A Debt Collector for more information about this subject.)

But trying to stop a foreclosure is not something we advise you doing on your own.  Suing a mortgage company after a foreclosure is not something we advise doing on your own.  And when you are sued in an ejectment action or an eviction action, after a foreclosure, this is again not the time that we suggest most people should handle this on their own.

The whole subject of foreclosure defense, stopping foreclosures, countersuing Fannie Mae or Freddie Mac or any one of the big mortgage banks, is a complicated subject.  Often times there are aspects that are interrelated that you may not know about if this is not something that you do on a regular basis.

I’ll give you a typical example.  A homeowner is facing wrongdoing by Bank of America or Wells Fargo or Chase and sues to stop a foreclosure.  The Alabama consumers has read about various court cases where the courts have supposedly ruled that Wells Fargo or Deutsche Bank or whoever the company may be does not have the right to collect on mortgage loans and does not have the right to foreclose.

Instead of gathering actual admissible evidence, the homeowner relies upon internet reports and news reports about what some judge in New York or Florida or Idaho has done.

The bank is represented by one of the top litigation firms in the state and the lawyer handling the case deals exclusively in this area of the law.

The bank files various motions, including motions for summary judgment, and in response the Alabama consumer submits reports or newspaper articles about what judges have done in other cases across the country.

The Alabama homeowner is shocked when the judge rules that none of that information is admissible, will not considered, and the information is irrelevant.

The homeowner loses the lawsuit and may be barred from ever litigating issues again with the bank depending on exactly what occurred at what particular time and what was alleged or could have been alleged in the lawsuit.

We go through that example to point out that if you represent yourself, then you are held to have the exact same knowledge and understanding of the law that a lawyer is expected to have.  This may not seem fair but the judge cannot give you legal advice or help you in your case.

While there are innumerable self-professed experts who will explain to you why no mortgage loan is valid in America, and certainly not yours, and some of these companies and people will charge you thousands of dollars to give you an “loan audit analysis” which will detail scores of federal and state violations, this may not do you any good in your lawsuit.  The only thing that a judge can consider is what is in the pleadings and then at the summary judgment stage what is actually put in front of the judge that is valid evidence.

I realize that this article may seem self-serving but I want to assure you that you do not have to hire us to handle the defense of an ejectment lawsuit or to sue a mortgage company in Alabama.  There are other lawyers that are handling these cases.

What we do suggest is that you at least get an opinion and advice from lawyers that are familiar with mortgage litigation and then if you decide to handle the case on your own at least you will have done so in a conscious deliberate manner instead of simply assuming that “everybody knows the banks are crooked and the judge will rule against them.”

The following is a list of several lawyers that we know of around the state of Alabama that are handling mortgage litigation cases.  While we cannot speak to their abilities, to our knowledge these are competent and experienced lawyers and we think you would be well-served to speak with them.  You’re also, of course, welcome to speak with us but we wanted to emphasize in this particular article the need to speak with somebody who is a lawyer and who knows what he or she is doing rather than trying to handle a very complicated litigation case, which may end up in federal court, on your own.  There is a difference between handling a paper cut and handling open heart surgery.

The following are lawyers that you can Google and go to their web sites and find their updated contact information if you would like to speak with them about a potential foreclosure case that you may have.

In Birmingham, you can try Jon Lewis, Rhonda Hood, Kenneth Lay, or Wes Phillips.

In Auburn you can look for Nick Wooden (who is partners with Rhonda Hood and Ken Lay).

In the Mobile area you can speak with Ken Reimer and his partner Earl Underwood.

Remember, the point of this article is not to tell you whether or not you have a valid case.  No lawyer can do that until they know the details of your situation.  What we are simply trying to encourage you to do is to take the first step of gathering your information and sitting down with the lawyer to understand at least what options that lawyer sees for you so that you can make a sound decision on what you want to do moving forward.

It is true that debt collectors who are collecting federal student loans have enormous powers, but they also have limitations.

Last year we noted many of the typical Fair Debt Collection Practices Act (FDCPA) violations committed against Alabama consumers by federal student loan collection agencies.

We will list several of our lawsuits against student loan collectors so you can get a feel for how we approach cases in Alabama against abusive student loan collection agencies.  We will update this list every few months.

We welcome you contacting us to share your experiences with these, or other, collection agencies related to student loans.

• Alabama consumer sues Allied Interstate over lies related to garnishment of wages and other FDCPA violations
• General Revenue Corporation sued by Alabama consumer for FDCPA violations and illegal calls to cell phones with computer dialers (TCPA)

Do student loan collectors have unlimited powers?

Can they really take your tax refunds?

Garnish your wages whenever they want?

Is there really no statute of limitations on any type of student loan debt?

To get a handle on this situation, let’s look first at the similarities in collection powers and then the differences between private and federal student loans.

Similarities In Collection Of Federal And Private Student Loans

Under both types of loans, you can be sued by the proper party if you default on the loan.  This makes sense as being sued is normally always an option if we default on loans.

You can face collection activities including:

• Negative credit reporting.
• Collection calls.
• Collection letters.
• You may also face abusive, illegal collection activities.

Under both types of loans, it is very difficult (but not impossible as collectors will often lie and say) to file for and receive a bankruptcy discharge.  You have to show “undue hardship” which basically means you can not work anymore and have no hope to paying off the loan.

Another similarity is both federal and private student loan collectors must follow the Fair Debt Collection Practices Act (FDCPA).

They also must both follow the Telephone Consumer Protection Act (TCPA) which restricts certain types of auto dialed calls to your cell phone.

Differences In Federal And Private Student Loan Collection

Statute of limitation – none for federal loans. Private loans will be based upon the applicable state law and what the contract says.  This can be for a short period of time or it may be a long period of time but at least it is not unlimited like the federal student loans.

Options to rehabilitate or consolidate to bring out of default – on a federal loan you can rehabilitate or consolidate (i.e. refinance) one time each if you meet the requirements. A private student loan collector does not have to allow you to do either unless the contract requires it (I’ve never seen that).

The definition of default – a federal loan is in default if you go 270 days without making a payment. A private loan is in default whenever the contract says it is. This usually is one missed payment. Or moving without providing a new address. Or filing for bankruptcy.  Sometimes it can be when you default on another debt.  You really have to read the contract closely to find out.  Given that there is a statute of limitations, you might find the default happened long enough ago that no suit can be filed against you, no threats of a suit, ect.

Ability to wage garnish – under a federal loan, you do not have to be sued in order for your wages to be garnished. But you do have to receive a notice letter and have an opportunity to request an administrative hearing. (Note many collectors will lie about this — they say they can garnish you whenever they want). A private student loan collector cannot do this — instead you must be sued, lose the suit, and then you can be garnished if allowed under state law. This is the same as a credit card debt, mortgage loan, etc.

Ability to intercept government benefits or tax refunds – a federal student loan default can result in your government benefits being intercepted. There are some exceptions but this is a very powerful tool. A collection agency for a private student loan company cannot do this. Instead it is simply the same as a credit card debt, car loan, etc.

Powerful Collection Powers But Still Governed By The FDCPA

For any collector, whether collecting federal or private student loans, must abide by the FDCPA and cannot violate that law.

Well, they can violate the law. But if they do you can sue them.

In fact, if you don’t sue them, this will encourage them to continue violating the law against you and other consumers.

So appreciate the powers they have — especially if collecting a federal student loan — but understand these collectors are not all powerful and can be brought down when they violate the law.

They are so used to being arrogant, being heavy handed, and breaking the law in such an outrageous manner that they believe they are untouchable.

Suing them, as is your right under the law if they have violated the law, is a way to remind them that while they may be arrogant, they are just like you when they are in a courtroom in front of a jury — someone who is subject to the laws and they will have to accept whatever the judge and jury decide.

If you have been abused by student loan collectors or have any questions, get with a consumer lawyer in your state. If you live in Alabama, feel free to call us at 205-879-2447 or you can fill out a contact form.

This is because LVNV files suits, at least the ones we have been involved in, with no apparent intention of ever proving its case.  These cases seem to be filed simply to obtain default judgments.

In our judgment this violates the Fair Debt Collection Practices Act (FDCPA).

But you would think after LVNV loses its bogus lawsuit against the Alabama consumer, it is over.  LVNV will move to the next person, right?

No.

LVNV often continues to collect on the debt, even though the debt is not owed.

Sometimes this takes the form of sending collection letters by the collection lawfirm.  This violates the FDCPA.

Sometimes it is other collectors who have been hired by LVNV that continue to collect on the non existent debt.  This violates the FDCPA.

Sometimes LVNV will continue to credit report that the Alabama consumer owes the debt, even after the judge has said that the consumer does not owe the debt.  This violates the FDCPA.

Remarkably, even when a consumer disputes the debt through the credit reporting agencies (Equifax, Experian, TransUnion, etc), and tells them that the debt  is not owed after the collection lawsuit, LVNV will still continue to insist the debt is owed and keep it on the Alabama consumer’s credit report.  This violates the FDCPA and the Fair Credit Reporting Act (FCRA).

Finally, LVNV will even sue consumers who have already settled their debts with LVNV.

All of these suits are met with excuses and explanations for why LVNV is not at fault and why the consumer shouldn’t care about being sued or collected against or to have false credit reporting.

We disagree as do our clients.

On this page we will list links to some of the lawsuits that we have filed against LVNV for this exact type of mis-conduct.

• Alabama consumer sues LVNV after it sues him when the consumer had already settled his debt with LVNV
• LVNV sued by Alabama consumer for continuing to credit report and continuing to send collection letters after the consumer won the collection case
• Alabama consumer sues LVNV for continuing to credit report after losing the collection case against the consumer
• LVNV and collection lawfirm Budzik are sued for continuing to collect after losing the LVNV collection case against our Alabama consumer

We will continue to add to this list.

If you live in Alabama and have had similar experiences with LVNV, we would like to hear your story.  You can call us at 205-879-2447 or fill out our contact form.

WHAT IS A CONSUMER LAWYER OR A CONSUMER PROTECTION ATTORNEY?

A consumer lawyer or a consumer protection attorney is a lawyer that fights for his or her clients who are individuals (consumers) as opposed to partnerships, businesses, or corporations.  Typically the consumer is facing issues with debt collection, unsafe products, identity theft, credit reporting issues, or issues related to foreclosures.

WHAT TYPES OF CASES DO YOU HANDLE?

Our cases revolve around three main types.

First, so many Alabama consumers are being threatened with or have actually faced foreclosure from their mortgage company.  They may be sued to eject or evict them from their home or they may be facing a foreclosure sale date in the very near future.  Often this type of consumer has made great efforts to save their home but everything seems to be falling apart.  We have an article that discusses the three stages of foreclosure as well as an article that discusses the details of a wrongful foreclosure case in Alabama.

Second, many of our clients are facing abusive debt collectors.  These clients may be facing a lawsuit from a debt buyer.  They may have a debt collector calling their neighbors or calling co-workers illegally to collect the debt.  They may be experiencing illegal voicemails or just good old fashion harassment that is illegal under both Alabama state law as well as the Fair Debt Collections Practices Act (FDCPA).

Finally, we have clients who are dealing with errors on their credit reports.  Sometimes this is from the terrible problem of identity theft.  Sometimes it is just plain false information on their credit reports.  A good percentage of our clients come to us having already disputed with the credit reporting agencies (Equifax, Experian, Innovis, TransUnion, etc) and they are now trying to figure out what to do with the results of investigation which shows the false account still on their credit reports.  Finally, we don’t have as many of these as we used to (companies got tired of being sued and decided to fix their systems) but some clients have been sued on a collection account, they win the collection suit, but the debt collector still reports them as owing money on their credit reports.

We have other types of consumer issues – whether lemon law, or fraud in an insurance context, or many other types but the three categories of cases listed above will give you an idea of what we deal with most often.

WHAT TYPE OF CLIENTS DO YOU HELP?

Primarily folks who are dealing with those three types of cases listed above.  Our clients run the range from teen agers to clients in their 80s.  Some are struggling very much financially while others live in million dollar homes and make six figure salaries.  The common thread is that all of our clients have been mistreated and have sought our advice on how and when to take action to stop the wrongful conduct and compensate our clients for what they have gone through.

WHY DID YOU DECIDE TO BECOME A CONSUMER PROTECTION LAWYER? 

The short answer is we can make a tremendous amount of difference in the lives of our clients while we make a good living.  We are running a business so we have to make enough money to pay our bills and prosecute our cases.

Lots of litigation can provide a living but it is so rewarding to have someone come into our office distressed over a bad situation and explain how we can turn the situation around.  For example, someone is sued by a debt buyer.  They think they will have to pay out thousands of dollars to the debt buyer.  After we explain that debt buyers typically have no proof that they own the debt and therefore can’t win at trial, you can see the person start to relax and regain hope.  Then after the trial when the debt buyer loses, that hope turns to amazement.  Then if the debt buyer does not correct the credit reports and we sue the debt collector and the debt collector finally corrects the credit reports and pays our client money, the amazement turns to joy.  What was a very bad situation (being sued by a company that does not own the debt) is turned into something where our client is paid money for having to go through this.  Seeing a client’s face after a jury finds in her favor is a wonderful feeling.  Obviously every case does not turn out this way but we enjoy the challenge and the reward (financial, emotional, etc) that comes from helping our clients turn a bad situation into a good situation.

We get great joy out of seeing clients who are able to put a “period mark” on a painful time in their life and get a fresh start.  Sometimes the victories are small . . . sometimes they are big.  A small victory may be simply winning a small claims debt buyer lawsuit.  Or getting a debt collector to leave our client alone and pay $5000 for damages.  Other times the victories are more dramatic – perhaps a mortgage company completely walks away from a mortgage/note and sets aside the foreclosure after being caught committing fraud.  Or as happened in July, we tried a case against a debt collector – one that we would have settled for $7000 early on – and the jury came back with a six figure verdict including awarding $100,000 more in punitive damages that we even requested.  These moments – small and big – really bring us joy and satisfaction and we love knowing that we have made a difference in our clients’ lives.

We also enjoy teaching and sharing our knowledge of the law in an understandable manner – this truly empowers our clients to know when they have had their rights violated and to be more careful in dealing with all of the scams that are out in the world.

As we state on our home page - our mission with this website (and ultimately with our practice) is to help consumers gain knowledge so they know when their rights are violated and then to motivate and help them take action.  Only when knowledge and action are combined will the abusive practices of so many debt collectors, credit reporting agencies and mortgage companies begin to ease up and slow down.

That’s why we are consumer protection attorneys.

Whenever you communicate with a debt collector or credit reporting agency (Equifax, Experian, Trans Union, etc) we always recommend that you do so by certified mail, return receipt requested.  Sometimes our clients want to know why is it so important and why is it not good enough to just fax or mail a letter in a cheaper manner.  The answer is with anything other than certified mail, it can become difficult to prove the collector or credit reporting agency received it.

We love email but with spam filters it is not certain that the right person receives your email.

We love faxes but sometimes the fax confirmation sheet will not prove the company received it.

The only way to ensure, to make sure, that the collector or reporting agency received your communication is to send it certified mail, return receipt requested.

WHAT DO YOU GET WITH CERTIFIED MAIL, RETURN RECEIPT REQUESTED?

When you send out your dispute letter this way you make sure that the collector or agency actually get the letter.  The company has to sign the green card and date it.  This means you know exactly who received it and when they received it.  Out of all of our cases we only had one defendant deny getting the certified mail.  When we showed them the signed receipt (signed green card) the lawyer for the defendant argued it was someone else in the building that signed his client’s name to it.  When we pressed, the lawyer caved on this because of the effectiveness of using a certified mail sent return receipt requested.

HOW DOES CERTIFIED MAIL WORK IN A TRIAL?

We have seen companies of all sizes and sorts take the position that the critical email, fax, or mail did not make it to them.  Thus, it comes down to who does the jury believe.  This is why having the signed green card is so important.  If a collection agency or Equifax or Trans Union or anyone else wants to argue about receiving your letter, and they signed the green card, then their credibility is seriously in doubt.  We all understand the trustworthiness of the US Postal system.  Yes we sometimes complain but think of it – for a couple of quarters a government worker takes your letter and personally delivers it anywhere in the country with astonishing accuracy.  Add to this making the other person sign for it and it becomes very difficult for the defendant to deny receiving it.  You have their signature or in the case of a business more likely a stamp – “Equifax” or “Experian” or “NCO”.  To deny that is sort of like the famous incident with the talented Charles Barkley who said he was misquoted.  In his autobiography.  That’s a hard sell….

CONCLUSION

If you have something worth sending that may end up in litigation – send it certified mail.  Don’t save a couple of bucks and cost yourself thousands or tens of thousands of dollars because you have given the defendant something to argue.  Send it certified mail, return receipt requested, and lock down the receipt of your letter.  When you are in litigation or getting close to trial, you will be thankful you did.