Transcript of webinar on Alabama debt collection lawsuits with John G. Watts
(This was a webinar from a few years ago — the information is still valid and we wanted to put this out here as we hope it will be helpful to you!)
We’re going to answer some questions about debt collection suits and dealing with debt collectors. It’s one of the most common areas of questions that we get because there are just simply so many collection law suits 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.
We’ve got, let’s see, five questions and unless we have any live questions while we’re doing this.
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 somewhere else, 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, 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, she’s in Jefferson County. They sued her in Lauderdale County. Is that proper? It’s not where she lives.
The suit is not where she created this debt, so that would be an improper county. What does that mean?
Under the FDCPA, if they sue you in the wrong county, then that’s a violation of the FDCPA.
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 a debt you don’t owe, and they come to court they have no proof, and they do false credit reporting, and they do this and they do that, and they sued you on the wrong county, absolutely, you just stack this on top of the other violations.
They’re just doing one violation after another, which is wrong. They sued in the wrong county and please keep in mind, Alabama courts have their own rules about where you can be sued, where you cannot be sued.
They don’t always line up perfectly with the FDCPA.
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 it is.”
You know you’re violating the law so deal with the consequences.
Our next question is, “What is the difference between Circuit Court, District Court, and Small Claims Court?”
Circuit court is kind of our big court. It’s a court where you can be sued for a million dollar 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 highest trial court we have in Alabama.
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, you have the same judge and courtroom in Small Claims and District Court. There are some different rules. Small Claims rules are a little more relaxed. The District Court has 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. Interrogatories, request for production or request for admissions, and depositions.
We talk about those in other videos.
In District Court, it’s pretty rare that that ever happens.
In Small Claims, absolutely no discovery, so different levels there.
That means that it starts completely from scratch, as if what happened in Small Claims or District Court never happened.
Hopefully, that helps you to get a little bit of perspective about the courts.
Our third question is, “What do I do if I find out my bank accounts have been wiped out (garnished) by the collection law firm?”
This question came from somebody that, I think it’s over the holiday weekend. They’re having a great time. All of sudden on Monday, boom! Bank accounts are wiped out (garnished). What in world happened?
The very first step is, you look and say, “Okay. Do I have a judgment against me?”
Maybe there’s a judgment way back 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 judgment? 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.
Our 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 judgment?
If there is a judgment, 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?
Normally, it’s personally delivered to you, sent by 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 can make that service go away, it’s almost like here’s the judgment, it rests on top of you being served.
If you pulled the service out, and you show the court, “I wasn’t served.” That judgment just falls apart. It doesn’t make the lawsuit go away. Lawsuit is s 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 judgment stands.
What do you do now?
You can look into filing bankruptcy.
You can look at doing a lump sum settlement.
Or, 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 webinar, but I’ll say you must 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.
Say there’s a $5,000 judgment, 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, they come after you garnishing $2,000. You say, “I was done.” They go, “No, no, no, no. You just payed $3,000 and you still owe $2,000.”
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.
Of course, you can hire a lawyer if you want a guide and don’t want to have to do this on your own.
If you’re in Alabama or this is a judgment 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 judgment so the judgment falls.
Ok, on to our next to the last question.
“What happens if I ignore the Nathan and Nathan lawsuit they filed for NCSLT?”
Now, let’s define a couple of terms.
Nathan & Nathan is a large Birmingham collection law firm and NCSLT is the National Collegiate Student Law Trust. Along with a law firm called “Scott & Associates” Nathan & Nathan files the NCSLT cases.
The question is, what if I ignore it?
What if I ignore the lawsuit?
What if I ignore the collection letters from National Collegiate Loan Trust?
Typically, you’re going to get sued.
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 on private student loans.
If you ignore it, you’ll get a judgment. I can’t tell you the number of people come to my firm after a judgment is entered in favor of NCSLT.
The clients tell us,
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.”
They can sue you. (There is a lot of abuse and you have defenses but they are allowed to sue if they follow the law).
They can touch your bank account, garnish your wages, etc.
This big judgment just keeps growing and growing and growing every year with interest.
Is Nathan and Nathan a legitimate collection law firm?Absolutely.
They’re licensed lawyers, they’re real lawyers. 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 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 Chase Bank or Charter One Bank, etc. There are all these different entities that are involved in this.
The company, it makes you a loan, and they hold onto it until they sell it to this company, then it gets sold to another company, and finally it gets (supposedly) 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, which is the best move sometimes, they don’t have to prove it in court as you are settling.
But 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 judgment against you. Maybe a default judgment, 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 an article on everything you want to know and more about being sued by National Collegiate Student Loan Trust. You can check that out if you’d like more information.
Our last question for today is, “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.”
There are a lot of collectors out there that are absolute scam collectors. It’s some guy in his basement with a prepaid cellphone and he’s from Pakistan or somewhere out of the country. Then, there are legitimate companies. Now, even if they are legitimate, 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’s prepaid cellphone? He’s going to flee the country or he’s already out of the country.
I’ll just say this, 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 a letter and across the top it says “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, and we will help you find out whether or not it’s a legitimate voice.
Back to our original question 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 Portfolio.
They also file as I recall, a good bit of medical type collection.
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, it’s your own risk.
Should you ignore them? No.
Are they legitimate? Absolutely.
Take it very, very seriously if you’re sued by this law firm. They know what they’re doing. They’ve been around, and they’ll show up at court. You have to treat them very seriously.
Contact Us if you would like help or if you have questions for us to answer in videos.
I hope that these questions and answers have been helpful to you. You are welcome to continue to submit questions to us either by leaving a comment or contacting us through our contact form.
You can give us a call at 1-205-879-2447 and we’ll be happy to help you or add your questions to the list.
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 Mobile, Montgomery, anywhere in the state, we’ll represent you.
We’ll be glad to help you.
Hope you have a great weekend and I will talk to you next week. Thanks.