Alabama Consumer Protection Attorney John G. Watts answers your debt collection questions
Alabama Consumer Protection Attorney John G. Watts answers your debt collection questions
We did this live webinar on June 6th, 2017, and have typed a form of a transcript below for you with some links..
Welcome to this webinar! Today we’re going to answer some questions that we’ve been asked, including several questions about the debt collector (debt buyer) Velocity Investments, LLC.
Let’s get started.
“What do I do if a collection lawyer is sending me debt notices at work for a debt that is over 4 years old?”
Let’s back up a few steps first.
When you purchase a car and you’re signing the papers, the dealership will put their name as the seller.
Those terms of financing usually have a 4 year statute of limitation.
This brings up an important question — 4 years from when?
Typically, it’s 4 years from when you stopped paying.
Since it’s been over 4 years in this particular case, then there’s a great statute of limitation defense.
However, if you’ve been sued on this debt and you ignore it, then it’s too late to raise the statute of limitation defense.
So we were either sued and have a judgment against us, which has led them to your employer to ask what you do, how much you make, etc. for garnishment purposes (25% of your take-home pay), or a collection agency is reaching out to our work on a debt they cannot sue us on.
If the latter is the case, then they have some serious problems heading their way.
Collection agencies (usually) can only contact our place of employment to ask if we work there.
They can only do this if they don’t already have your location information.
That’s it.
If this has happened to you, there are some questions to answer, but it’s more than likely that something is wrong here.
“My mother’s neighbors are being called by debt collectors repeatedly asking for my mom. How do I fix this?
Debt collectors are only supposed to contact you or or spouse about any debt you supposedly owe.
Except, under the FDCPA (Fair Debt Collection Practices Act), there’s something called “location information.”
This is where a debt collector can contact a third party (i.e. neighbors) to ask for home address, home phone, and place of employment.
However, they can only do that if they don’t already have that information on file.
If they’ve called a neighbor, and the neighbor says either, “Here’s in information, please don’t call me again, ” or, “I’m not giving you any information, don’t call me again,” the debt collector has no reason to call that neighbor again.
Also, if they already have the location information, then it would be illegal for these guys to call any neighbor.
Usually, the debt collectors call your neighbors because they want to embarrass you.
Your neighbors come to your door, or call you and tell you that a debt collector wants to speak with you, because they’re tired of being harassed.
Most of the time, if a debt collector is calling your neighbors, they’re doing so illegally.
If they’re doing this illegally, then you may have the right to sue them under the FDCPA.
“Someone came up to my neighbor and said they were trying to find me because I’m being sued. How do I stop this?”
There are 2 options in this particular situation.
The first option is that this is a debt collector.
It’s unusual, but it’s possible.
If it’s a debt collector and they’re telling your neighbor that you’re being sued, that’s illegal.
We would sue that debt collector under the FDCPA (Fair Debt Collection Practices Act.)
The second option is that it is a process server.
This is someone who has the lawsuit papers in their hands, and they need to hand it over to you to serve you.
Once you’ve been served, the clock starts ticking to respond to it.
In Small Claims or District Court, you have 14 days from when you were served to answer the lawsuit.
In Circuit Court, you have 30 days from when you were served.
If it’s a process server and they’re going up to your neighbor and say, “Hey, I’m looking for so and so because I need to give them some legal papers,” then that’s… Annoying.
However, it’s not necessarily illegal under the FDPCA.
The first step is to figure out who this person is.
The simple way to figure this out is to give us a call at 1-205-879-2447 if you live in Alabama.
We’ll be glad to look it up on the online court system for you to see if there’s a lawsuit against you.
If there is a lawsuit against you, then we need to deal with that.
If you haven’t been served and it’s a debt collector, we’d be very interested in suing them under the FDCPA.
“A debt collector is calling me and asking about my neighbor. Is that legal?”
Here’s a general rule:
If it’s one call, which should be for location information, then that’s probably fine.
However, if they start revealing details about the debt, then it starts to become illegal.
In addition, if they keep calling the neighbors and harassing them, the neighbor may have a right to sue.
The person who supposedly owes the debt may also have a right to sue under the FDCPA.
Almost every time a debt collector calls a neighbor, they get closer to taking illegal action.
When they do this illegally, that allows you to sue for money damages, which has a wonderful consequnce of getting these guys to stop harassing you with phone calls.
“How easy is it to beat Velocity in a lawsuit on an old vehicle debt?”
It depends.
You have 5 options when your’e dealing with a debt collector.
1. File bankruptcy.
2. Fight it on your own.
3. Settle it on your own.
4. Hire a lawyer to fight it.
5. Hire a lawyer to settle it.
How easy is it to beat Velocity?
It of course depends on the facts of your case and on how well you know the law.
You have to be familiar with the arguments that the collection lawyers will make.
If you hire an attorney, and they know what they’re doing, it’s certainly doable to beat them.
Handling it on your own is harder but still doable.
You do have to consider that in every trial, one person will win and one person will lose, however.
“Can Global Collection Agency collect on a Velocity Investments debt that was last paid in 2007?”
This boils down to a statute of limitation issue, and the FDCPA, or Fair Debt Collection Practices Act.
Velocity Investments usually collects on old car loans in Alabama.
There’s a 4 year statute of limitations on most car loans that Velocity sues on.
Since the last payment was made in 2007 in this case, then Velocity should have sued you by 2011.
Sometimes, Velocity collects on old credit card debt.
Unfortunately for them, they should’ve sued in 2013, not 2017.
Even though it’s too late for them to sue, they may be trying to get you to make the smallest payment on the debt.
Whether right or wrong, if they can get you to make a payment, then they will argue that the statute of limitations has been reset, and they have 4-6 years to sue you.
This means you need to be really careful when you’re dealing with these guys.
You may be wondering, “Is this even legal?”
It’s incredibly rare that is legal.
Really, when they’re sending us a letter trying to collect, they should also put in writing that if you make a payment, they may sue you on the debt.
But they don’t.
That’s deceptive.
When they act deceptively, they should have to face the consequences for breaking the law.
We can use the FDCPA to help us stop this illegal behavior.
“Doesn’t Velocity have to tell me that it’s too late to sue me?”
I believe that they do have to tell you that it’s too late to sue.
Velocity is a debt collector under the FDCPA (Fair Debt Collection Practices Act) and so it must not be deceptive.
Because Velocity says they can sue you if you make even a small payment on the debt because it claims this will restart the statute of limitations (the time to sue you).
Unfortunately, these guys rarely ever do things legally in my opinion.
So be very careful dealing with them and if they violate the law, I would strongly consider suing them for money damages.
Contact Us.
Hope this webinar was helpful to you!
If you have any questions, feel free to get in touch with us.
You can reach us by phone at 1-205-879-2447.
Or, if you prefer, you can fill out a contact form and we will get in touch with you.
Thanks for reading, and have a great day!