Collection Abuse

Huge Win for Alabama Debtors Facing Wage Garnishments – Alabama Wage Garnishment Attorney Judson E. Crump

January 30, 2020 by Attorney Judson E Crump 2 Comments

On January 10, 2020, the Alabama Court of Civil Appeals issued its decision in the case of Renter’s Realty v. Ieshia Smith. At issue in that case was whether the Alabama Constitution’s $1,000 personal property exemption could be applied by judgment debtors to protect wages.

First, some background on the case. The Alabama Constitution has an exemption for personal property that allows judgment debtors (people against whom judgments have been entered) to protect up to $1,000 of personalty from garnishment or execution. The court had previously held, in Merrida v. Credit Acceptance Corporation, 238 So. 3d 1249 (Ala. Civ. App. 2017), that as long as a debtor’s paycheck was less than $1,000 per pay period and they used all of that money for themselves and their dependents’ necessary support, the constitutional exemption protected such wages from garnishment, even if those wages amounted to more than the amount protected under federal guidelines (which protects only 30 hours of minimum wage per week or 75% of income).

Unfortunately, the banking industry and other special interest groups lobbied their friends in Montgomery to pass a law that said the opposite: that the Constitutional exemption was NOT intended to protect wages. So the question came before the Court again: could the legislature pass a law interpreting the Constitution to say something different from what the Court previously said it meant?

Farah Majid, an attorney for Legal Services Alabama, represented the judgment debtor in the case and wrote an excellent appellate brief in the case. I had the honor of writing an amicus curiae brief on behalf of the National Association of Consumer Advocates, Alabama Appleseed Center for Law & Justice, and Alabama Arise. Our amicus brief argued that the State Legislature simply had no authority to pass laws that impeded rights granted by the Constitution, which is a higher legal authority than the Alabama Code. As we put it:

What the Legislature giveth, the Legislature may taketh away. Not so with rights endowed by the Constitution. City of Birmingham v. Graffeo, 551 So.2d 357, 363.)
Brief Amicus Curiae of Alabama Community and Human Rights Groups and National Consumer Rights Organizations, p. 10

The Alabama Court of Civil Appeals took the matter under submission, and on January 10th, they issued their ruling:

“We agree with the circuit court’s determination that the legislature’s effort to redefine “personal property” in § 204 was an impermissible “overreach” and that § 6-10-6.1 is, therefore, unconstitutional. Accordingly, the judgment of the circuit court is affirmed.
AFFIRMED.
All the judges concur.”
Ala. Civ. App. Appeal No. 2181042, p. 12

In other words, we were right all along! The law that was written by collection industry lobbyists to try and take more of the hard-earned money of Alabama’s working folks was declared unconstitutional. As a result of this ruling, anyone whose paycheck is less than $1,000 per pay period can now protect their wages by filing a claim of exemption with the trial court. If you need help protecting your wages from garnishment, feel free to give us a call the law office of Judson E. Crump, PC at 251-272-9148.

You can read my amicus brief here: Renter’s Realty v. Smith Amicus Brief

You can read the Court’s final opinion here: Renter’s Realty v. Smith Opinion

Credit Card Billing Errors: What You Can Do About It – Alabama Consumer Rights Lawyer Judson E. Crump

April 10, 2019 by Attorney Judson E Crump Leave a Comment

Unauthorized charges appear on credit card statements all the time. It can be financially devastating, but you have important rights.

I recently had a client who had been a DISH Network customer for years, but had cancelled her subscription in January of 2019 and returned all of their equipment (to the customer service representative who came to her house to close the account and uninstall everything). But then she received that nasty surprise 2 months later: a $500 charge on her credit card statement by DISH Network. She was, naturally, very alarmed at this, and immediately telephoned her credit card company to tell them what had happened. The credit card company did nothing. Fortunately, she came to me and we were able to help her resolve the situation.

If this sounds familiar, don’t be surprised. Unauthorized charges appear on credit card statements all the time. And while it often is the result of identity theft or a compromised account, that isn’t always the case. Fortunately, there is a very important law on the books that protects people in this situation: the Fair Credit Billing Act.

The Fair Credit Billing Act (15 U.S.C. Sec. 1666) was enacted back in the 1970s to protect innocent consumers from being held financially liable for money they didn’t spend. It is the federal law that requires credit card companies to have a “zero fraud liability” policy. But the law doesn’t act on its own: it requires YOU to take certain actions to protect yourself if you’ve been the victim of fraudulent or unauthorized transactions.

The central piece of the Fair Credit Billing Act is its dispute resolution scheme. If you see an unauthorized charge on your billing statement, you have 60 days to send the credit card company a written dispute. The dispute must

A) Be received by the credit card company within 60 days of the statement showing the unauthorized charge; 12 CFR 1026.13(b)(1)

B) identify yourself and the account number; 12 CFR 1026.13(b)(2) and

C) Must state precisely what is wrong with the statement; 12 CFR 1026.13(b)(3).

Once they receive your dispute, they have to acknowledge it within 30 days. This is usually a letter that basically says “Hey, we got your dispute. We’re looking into it.”

They then have 2 billing cycles to resolve the error. 12 CFR 1026.13(c)

During the time that they’re investigating your dispute, they are not allowed to report that you’re delinquent if you refuse to pay the disputed charges. Nor can they close your account if you refuse to pay the disputed charges. Note that this only applies to the disputed portion of the charges. So if your bill is for $600, and you have disputed $100 of charges in writing, then you can pay them $500 and still be treated like you’re current.

Once their investigation is complete, they have to send you a written notice of their findings. The investigation must be reasonable, and they must “make appropriate corrections in the account.” 15 U.S.C. 1666(a)(3)(B). If they determine that no error occurred, they have to give you a written explanation why. If they screw it up, you can sue them in federal court to force them to refund your money.

Don’t think that you have to fork out a ton of money to hire a lawyer, either. The Fair Credit Billing Act is part of the Truth in Lending Act, and creditors who violate this law are opening themselves up to a stiff penalty: up to $5,000 of statutory penalties, plus court costs and attorney’s fees. That’s right: if they do you wrong and you sue them, they have to pay your lawyer if you win. So even if your dispute with the credit card company is over a $200 charge, they could be required to pay thousands in attorneys’ fees if you beat them in court. The reason for this is simple: if they could get away with just refunding your money, then they’d never follow the law, because they’d never get sued. But thanks to the fee shifting provision of 15 U.S.C. Sec. 1640, they have to pay your lawyer’s fees if you win.

An experienced consumer rights lawyer in your area can help you take your case to the courts and get the justice you deserve without charging you anything up front.

I have an account that was “Charged Off.” What exactly does that mean? – Alabama Credit Report Attorney Judson E. Crump

October 17, 2018 by Attorney Judson E Crump Leave a Comment

If you have been through financial trouble, chances are that some accounts on your credit report are being reported as “charged off.” There seems to be a lot of confusion as to what exactly a “charge-off” means. Let me try to explain it.

First, a “charge Off” is not a legal term, but an accounting term. A charge off is a “term that a retail creditor uses to describe a non-performing loan that it considered a loss.” Eisberner v. Discover Prod., Inc. (E.D.Wisc. 2013). Basically, a charge-off means that the account has been closed and is considered a non-performing asset. They’ve given up on getting money from you for the time being. Usually sent to internal collections, a collection agency, or sold to a junk debt buyer.

The most important thing for most consumers to understand is that even though an account is charged off, they can still collect the debt. This is a VERY common area of confusion about charge offs. A lot of people think that a charge off means that the debt is no longer owed, but that is just not true. Even if they’ve sent you a 1099-C cancellation of debt form. They may have written it off for tax purposes, but that doesn’t extinguish the debt itself. You still must deal with it somehow.

On a credit report, the charge off date is the date that the account was written off by the creditor. It signals to potential lenders that the account is no longer considered active and open. Needless to say, a charge-off is a negative mark on your credit.

The biggest concern with charge-offs on credit reports is how they affect the length of time that the account can be reported against you. In the credit reporting business, we call this “obsolescence.” Generally, they can report a delinquent account for 7 years and 180 days from the date of the first uncured delinquency. Banks and credit card companies have a duty to accurately report the date of delinquency, even if the creditor didn’t charge the account off until later. One common error that sometimes occurs with charge-off dates is that when a debt buyer or subsequent assignee of an account purchases or acquires the account, they screw up the dates of delinquency. Sometimes they will report the “first delinquency” as being the date they took over the account, not the date it was first delinquent. This is called re-aging. And it’s illegal. Re-aging like this becomes a problem years down the road, when accounts that are older than 7 1/2 years delinquent are still being reported against you. If this has happened, it is crucial to send a written dispute to the credit reporting agencies to tell them that the account is obsolete, and should be deleted.

Also, I believe that for credit cards, they have to continue sending you statements if they are charging you interest. Usually a charge-off means that interest is no longer accruing, which is good. But sometimes a debt collector or other creditor will continue to report higher and higher balances, chalking it up to interest, which requires a written statement. If they’re not sending written statements with each billing cycle where interest is charged, they could be violating the Truth in Lending Act and its regulations.

Bottom line, if you have accounts that were charged off, then you still have to deal with the underlying debt, and they can still be reported against you, as long as they aren’t reported inaccurately or longer than 7 1/2 years from the date of delinquency.

If they’re reporting it incorrectly, call us at 251-272-9148 and we can help you fix the problems or take legal action to recover damages.

Buy-Here-Pay-Here Repossessions – Alabama Consumer Rights Lawyer Judson E. Crump

October 19, 2017 by Attorney Judson E Crump 3 Comments

Has your vehicle been repossessed by a Buy-Here-Pay-Here dealership?

Repossessions are hard on folks. You’ve lost your car. You’ve lost the money that you’ve put into it. Your credit has taken a hit. Maybe your neighbors or co-workers witnessed the whole thing and it’s embarrassing. Simply getting a car repossessed is hard enough. But sometimes dealers and repo companies make it worse by not respecting your rights during and after the repossession.

Contrary to what the car sales and finance industries would have you believe, you have certain rights when your car has been repossessed. You have the right to be notified of what they’re going to do with your car, and you have the right to redeem it if you can afford it. If they sell your car, they can’t profit from the sale of your vehicle.

That’s right. If a car dealer or finance company sells your car, they can’t keep any money they make over the balance due on the vehicle.

Here’s an example:

You buy a car whose cash price is $10,000 with $600 of taxes and fees. So the total price is $10,600.

You pay a $2,000 down payment and agree to $300/month for 48 months. So the amount financed is $8,600.

After paying for 6 months, you miss a payment and the car gets repossessed. At the time of the repo, the balance due on the car is $8,200, and the creditor paid the repo man $300 to repo the car. Your balance is now $8,500.

The creditor sells the car. If the creditor sells the car for $8,000, then you owe $500. [$8,500 – $8,000 = $500].

However, if the creditor sells the car for $9,000, then the dealer owes you $500. [$8,500 – (-$9,000) = -$500].

This seems like common sense, right? But believe it or not, used car dealerships break this rule all the time.

Small used car dealers and buy-here-pay-here dealerships usually don’t sell their repossessed vehicles at an auction. Rather, they put them back on their lot and sell them to another customer. So if you paid $2000 down on a $10,000 car that was repossessed 6 months later, it is extremely unlikely that the car has lost $2,000 in value during that time. But when they go to sell the car to another customer, they want to make as much money as possible by selling it for as much as they can. If they sell it for more than the amount you owe at the time it was repossessed, then they have to pay you the money they made off the second sale.

Now, it’s very hard to determine the price they got for a vehicle. That’s why you call a lawyer who knows how to handle these sorts of cases.

If you’ve had a car that has been repossessed and sold from the same lot that repossessed your car, call a knowledgeable Alabama consumer rights lawyer to see what you can do about it.

“Asset Recovery Associates” sued for FDCPA and Fair Credit Violations

August 21, 2017 by Attorney Judson E Crump Leave a Comment

Financial Credit Service, Inc., also known as “Asset Recovery Associates, Inc.” has been sued in Alabama for violating the Fair Debt Collection Practices Act and Fair Credit Reporting Act.

Our client is a recently retired docks worker. He has good credit, good income, and has made it a practice of paying his bills on time. So imagine his surprise when he got a telephone call from a debt collector called “Asset Recovery Associates, Inc.” He’d never dealt with them in this life, and had never even heard of them. But their collection agent was aggressive and convincing. She said that he owed a substantial debt to “Bank One,” and that it was very urgent for my client to pay them immediately. She said that if he didn’t pay them, they would initiate legal proceedings against him.

Not only did they sound sure of themselves and aggressive, their agent knew a lot of his personal information like his name, address, and date of birth. This was very disturbing, though, and made their threats sound more dangerous.

We aren’t sure if the account ever actually existed, but if it was a real account at some point, we believe that it was the result of identity theft. My client knows that he never opened an account with “Bank One,” and the debt collector hasn’t offered any proof that he actually opened the account or borrowed money from ARA, Financial Credit Service, or or Bank One.

We also aren’t sure where they got his personal information. It is possible that they got it from his credit report, or that it was purchased from data dealers or hackers. We do know that they obtained at least one of his credit reports, though he never provided them with any permission to do so.

We sued them in the case of Bradley v. Financial Credit Service, Inc., d.b.a. Asset Recovery Associates, Inc., Southern District of Alabama civil case number 17-cv-299-WS-MU. The lawsuit alleges that Asset Recovery Associates violated the Fair Debt Collection Practices Act (FDCPA) by :

Trying to collect a debt that was not owed.
Falsely threatening to sue my client.
Falsely telling a credit reporting agency that they had a legitimate business purpose for obtaining his credit reports.

The lawsuit also alleges that Asset Recovery Associates violated the Fair Credit Reporting Act (FCRA) by digging into his credit history without his permission or a legitimate business purpose for doing so.

The lawsuit seeks $50,000 plus court costs and attorneys’ fees.

The lawsuit itself can be found on this link:

FDCPA & FCRA Lawsuit Against Asset Recovery Associates, Inc.

How to Vacate a Default Judgment – Alabama Consumer Defense Attorney Judson E. Crump

January 18, 2017 by Attorney Judson E Crump 3 Comments

Once a judgment is entered against you, the law presumes that it is valid, and there are only a few ways to undo the judgment. Here’s how.

First, know that judgments are always presumed valid once entered, and the law generally favors finality of judgments. This means that if you ask a court to vacate its own judgment, the burden is on you to show good reasons why.

There are only a few grounds on which a court can vacate a judgment. Rule 60 of the Alabama Rules of Civil Procedure lists them:

Mistake, inadvertence, surprise, or excusable neglect.
Newly discovered evidence that could not have been discovered before the judgment was entered.
Fraud, Misconduct, or lies by the adverse party.
The judgment is void.
The judgment has been satisfied.
Any other reason where it is clear and undisputable that allowing the judgment to stand would be patently unfair.

The first 3 categories have to be raised within 120 days of the entry of the judgment. So if you got a default judgment entered against you, and you didn’t know about it until 6 months later, you can’t raise any issue of mistake, new evidence, or fraud by the judgment creditor. So this is a rare remedy because most people find out about judgments months or even years after they’ve been entered.

Category #4 is the most common way to vacate a default judgment, because this category includes cases where the judgment creditor never served you with the original lawsuit papers. To get a judgment, a plaintiff must prove that they served the defendant with the summons and complaint. This is proven by a document filed with the court called a Service Return. The service return is signed by whoever served the lawsuit papers, and there are a few ways this can happen:

A sheriff’s deputy signs the document showing who was served and when.
A private investigator or process server signs the document showing who was served and when.
A certified mail return receipt is filed, showing that the document was delivered to the residence, corporate office, or registered agent of the defendant.

If you were never served with the lawsuit papers, then it is possible to get the court to vacate a default judgment. But you must prove that you were never served. The service return is presumed to be the truth.

Step One: Reading the Service Return

The Service Return will state who served the summons, when it was served, and how it was served. Here’s an example of a service return issued by a Sheriff’s Deputy:

Look at the bottom box. The deputy certifies that he served the Defendant’s mother, not the Defendant. The top box shows the address listed for the Defendant. If both of these are incorrect, that can be grounds to vacate a default judgment.

Using that case as an example, the Return shows that the defendant himself wasn’t served, but his mother was served. It also shows that the address listed by the Plaintiff was at St. Jude Circle. But in that case, the defendant didn’t live there. This is important, because service doesn’t always have to be made on the defendant personally. It can be made on an agent of the defendant (rare for individuals, unless they’re elderly and have signed a power of attorney) or anyone over 16 in the defendant’s household.

So the first thing you need to do when you want to vacate a default judgment is go to the courthouse and get a copy of the service return. If there are multiple service returns, get a copy of ALL of them. Read them carefully. Did they serve you? Or was it someone else? If it was an ex-husband, parent, baby-mama, or minor child, then that doesn’t count. You can get the judgment vacated.

If it was an adult in your household (like a spouse, parent living there, adult children, or live-in girlfriend), then you are stuck with it.

Next: When the Service Return Contains False Information

A New Scam: “Debt Validation Services!” – Alabama Consumer Rights Attorney Judson E. Crump

October 18, 2016 by Attorney Judson E Crump 1 Comment

There’s a new scam in town! It’s called “Debt Validation.”

While the life of a consumer protection lawyer can be riveting, it isn’t every day that you see the birth of an entirely new scion of the American scam industry. Well, today was my lucky day. I got a call from a potential client (we’ll call him “Ricky”) who had questions about his dealings with a company called “Ace Services.” They had offered him – at the low, low price of $2,136 – some “debt validation services,” which were supposed to somehow prevent his creditors from being able to collect from him.

The exact mechanism of this was not clear, and their website is equally obscure. Most of it is filled with anonymous corporate puff (“The principles and managers at ACE have decades of combined experience in consumer finance and always place our customers needs first”), and their page on debt validation gives this detailed explanation: “Let the professionals at Ace connect with your lenders to determine the validity of a debt.”

How illuminating.

Their agent sounded more knowledgeable on the phone, so Ricky signed up. He started paying, and put his debts into their supposedly trustworthy hands.

We don’t know what exactly they did for him – they never sent him statements to tell him what they were doing with his money, and they didn’t furnish him with copies of any documents they sent to his creditors.

But we do know what they didn’t do: deal with his debts. A few months later, his creditors started coming after him for money again. The “validation” service had failed. His money was gone.

This is what always happens when you hire a debt settlement scam. These folks call their (dis)service “debt validation,” but they use the tried and true methods of old-fashioned debt settlement scams. It usually starts with an internet advertisement that directs you to a different company, then electronic documents are electronically signed. (For some reason, debt settlement scammers love DocuSign. I guess the lack of a physical paper contract makes it easier to hook the customer in before they have time to think about what they’re doing).

Then they start drafting money from your account and assure you with phone calls that you’re affairs are being handled competently, but you’ll have to be patient. Then you don’t hear anything for a while, because your creditors are leaving you alone while they deal with the temporary but legally toothless paperwork that the debt settlement/validation company is sending them. This leads you to think “Yes! It worked! I didn’t get scammed! I’m going to be debt free!”

Until a few months go by and the debt settlement/validation folks have paid themselves from the secret bank account they set up in your name and then suddenly you start getting waves of phone calls and letters from new debt collectors asking you to pay off the debts you foolishly entrusted to scammers in Florida. (NOTE: Most scammers are in Florida. South Florida. This is because Florida has an unlimited homestead exemption, and scammers know they’re eventually going to get sued, and they can pile up all their money in a multimillion dollar mansion and not lose it even if they get hundreds of judgments against them.)

And then you realize that your money is gone, and instead of paying your creditors, you paid a crook in South Florida. This is inadvisable. So here’s the lesson: NEVER EVER EVER HIRE A DEBT SETTLEMENT, DEBT NEGOTIATION, OR DEBT VALIDATION COMPANY. They are all scams.

If you want more information about ACE Services, their website is www.ace-sg.com. Their real name is:

Ace Sales Group, LLC
675 West Indiantown Rd, Ste 205
Jupiter, FL 33458.

Reversing a $7,000 Bank Account Garnishment – Alabama Consumer Rights Lawyer Judson E. Crump

September 26, 2016 by Attorney Judson E Crump Leave a Comment

Midland Funding Garnished Over $7,000 from my Client’s Checking Account. Here is how we fixed it.

Mr. Carter had a few unpaid accounts he wanted help resolving, so he went to a local credit repair organization. They attempted to negotiate with some of his creditors on his behalf, including Midland Funding, who claimed that he owed them $9,029 for an old Sears card that he’d allegedly not paid. They sued him in the District Court of Mobile County. When he got the lawsuit paperwork, he immediately forwarded it to the credit repair folks. They said they would step in and negotiate with the collection agency for him. They did try to negotiate, but either Midland Funding or their lawyers didn’t want to deal with them (since credit repair organizations are not attorneys, creditors can ignore them if they want to), or they just could not reach an agreement that was acceptable to both sides.

Regardless of how negotiations went, nobody filed a written answer for Mr. Carter, so Midland took a default judgment against him for the full amount demanded in the lawsuit: $9,029 plus court costs. The Court entered the judgment and Midland obtained writs of garnishment. One of them went to Mr. Carter’s bank account, which contained all the money he could borrow and save up in order to try and settle his debts: over $7,000. And in the blink of an eye, it was all gone. Midland sent the garnishment to the bank the same day they sent it to Carter (which is perfectly legal in Alabama), and the bank immediately froze all the money in the account and sent it along to the Clerk of Court.

It wasn’t until after all this had happened that Mr. Carter came to see me. We filed a motion to vacate the judgment based on what the Alabama Rules of Civil Procedure call ‘excusable neglect,’ meaning that even though he hadn’t responded in writing to the lawsuit within the 14 days required, he had a good reason for not doing so: he was under the impression that the case was being handled between the debt settlement company and the collection lawyers.

The judge granted our motion and set the judgment aside. Click here to view the Court’s Order. (PDF): order-granting-relief-from-judgment

The Court set the matter for trial 2 months after that, and at trial, we won a judgment for the debtor. You can see that order here: $9,000 Midland Lawsuit Win

Finally, and most importantly, all of the garnished money was released, and the Midland account was gone. You can read the court’s order to release my client’s money here: Order to Release Garnished $$$.

This case was a great example of the sorts of serious problems that default judgments can cause you. We were fortunate that there were some extenuating circumstances in this case that the judge was willing to hear. And we were also fortunate that my client came to me less than 120 days after the default judgment was entered, because after the judgment is 120 days old, the rules allow you fewer ways to vacate it.

After 120 days have passed, the only ways to get a default judgment set aside is to prove you were never notified of the lawsuit in the first place or prove that the plaintiff somehow committed fraud on the court.

If you live in Alabama and get served with a lawsuit, you should call a lawyer immediately. If you can’t afford a lawyer, at the very least, you need to file a written answer. But even if you have had a default judgment entered against you, there still may be some hope of fighting it.

Can the Repo Man Do That? The Law on Repossessions. – Alabama Consumer Protection Attorney Judson E. Crump

September 17, 2015 by Attorney Judson E Crump 101 Comments

About a million cars are repossessed each year in the United States. Many of these are illegal, though most debtors (and a lot of repo agencies) don’t know it. So just what makes a repossession illegal in Alabama?

Breach of the Peace.

A secured creditor can only repossess their collateral if they can do so without any “breach of the peace.” The Uniform Commercial Code doesn’t define “breach of the Peace,” but the Alabama Supreme Court has. And they’ve adopted a pretty common sense rule: if the repo man violates a criminal statute, then they’re breaching the peace.

Despite this clear and wise rule, repossessions that breach the peace happen all the time. These really bother me because I believe that they show a fundamental disrespect for the human dignity of debtors. How? Because it should be obvious that you can’t commit crimes in order to repossess a vehicle.

“But it’s my job!” says the Repo Man.

“We have a right to get paid!” says Title Max or the car dealer.

OK let’s consider that. My job is to win lawsuits. What if I went into the law offices of my opponents and burned up their files. “I’m just doing my job.” Right? Of course not. A crime is a crime. No matter how poor or black or redneck or worthless you think your debtors are.

So they cannot break any criminal law. What does this mean for you? Here’s some examples:

They cannot enter the property of someone who doesn’t owe money if that person tells them to go away or tries to block their entry (that’s criminal trespass). They can enter your property.
They cannot break a lock, cut a chain, or enter your house. That would be burglary.
They cannot intentionally damage your (or anyone’s) property. If you have a marble statue of St. Theresa of Avila in your front yard, and they drive right over it, they are breaching the peace. This is called criminal mischief.
They cannot touch you or be violent in any way (that’s Assault).
They cannot threaten violence (that’s Menacing).
They can’t harm your pets (animal cruelty).
They cannot curse you, insult your virtue, or use profanity (harassing communications).
They cannot use false pretenses to get the keys to your car. Or to get access to someone else’s property.

In other words, missing a payment on a car note does not mean that repo men can commit crimes against you with no penalty. Despite what many creditors, banks, and “pro-business” politicians may think, a person does not become less than human just by falling into financial trouble. As I said, crimes are crimes.

Conversion.

They have to give your stuff back. That’s all there is to it. If they don’t pack it up and send it to you or let you come and get it, then they’re stealing your stuff. If they want to charge you $40 to come and get your own property that they have taken, that is conversion. They can’t do that. If they take valuable things or cash, then you can sue them for that.

Many retail installment contracts and security agreements give them the right to charge a reasonable “storage fee” for holding onto your stuff until you come get it, but even where such fees are authorized by a contract, there is no “storage fee” due unless some actual “storage” took place. If you go to their lot the day of the repo and your belongings are sitting right there in the car that was repossessed, then they haven’t stored anything for you. So no “storage” fees.

They get this one wrong All—The—Time. But it’s still wrong.

Trespass & Property Damage.

There are two types of trespass: trespass on real property (land and homes), and trespass against personal property (cars, boats, books, TVs, everything but land and homes).

Secured creditors do have a privilege to trespass on your own property and to travel on common property (like roads and public parking lots). However, they are not generally allowed to trespass into residential property of people who don’t owe them anything. For instance, if my car is in my back yard, the repo man cannot drive through the neighbor’s yard and drag it out over his grass.

Trespass against personal property generally means physical damage. If they unnecessarily damage or destroy your personal property, then they can be held liable for it.

But beware of one thing: it is also a crime to conceal collateral with the intention of hindering your creditors.

So What If They Break the Law?

A lot of people call me with tales of repossession misbehavior, and they think that if you can prove that the repo man broke the rules, they get their car back without paying for it.

That’s just not true.

Unless the repossession occurred a) when you were not in default, or b) after you’ve filed bankruptcy, you can’t get the car back without paying.

The penalty for an unlawful repossession is cash damages. Generally, they have to pay for whatever damage their misconduct caused, and in some cases they have to pay extra for violating certain laws.

A secured creditor gets to set off these damages against what you rightfully owe. So unless you’ve almost paid off your loan or their conduct was just really bad, then a wrongful repossession suit probably will not put any cash in your pocket, though it can shield you from a lot of future debt.

Example 1: You owe $10,000 on your car. It gets repossessed, and the repo man recklessly drove across your yard and crashed into your boat, causing $5,000 of damage.

They sell the car at auction for $3,000, leaving you with a deficiency balance of $7,000. If you sue them for trespass, they can counterclaim for the contract deficiency, which is $2,000 more than your trespass damage. So the court enters a judgment for them in the amount of $2,000. You reduced your debt, but that doesn’t help you very much.

Example 2. Granny owes $5,000 on a $30,000 mobile home. She bought it at high interest with $2,000 down 15 years ago. A repo man comes out with a 5th wheel and tries to haul it off, and in so doing, he pushes Granny onto the ground and knocks open a sewage pipe, causing rotten S— to fly all over poor Granny. This is a breach of the peace situation that allows for statutory damages of $12,000, plus some emotional distress damages for being such a jerk to a sweet old lady. Granny will get a cash judgment.

Harassing Communications in Alabama – Consumer Protection Attorney Judson E. Crump

September 9, 2015 by Attorney Judson E Crump 1 Comment

So you’re getting phone calls that are bogus and offensive. Are they legally “Harassing Communications?”

Like many states, Alabama has a criminal statute that bans certain types of harassing communications. The statute says this:

Ala. Code Sec. 13A-11-8(b)

A person commits the crime of harassing communications if, with intent to harass or alarm another person, he or she does any of the following:

a. Communicates with a person, anonymously or otherwise, by telephone, telegraph, mail, or any other form of written or electronic communication, in a manner likely to harass or cause alarm.

b. Makes a telephone call, whether or not a conversation ensues, with no purpose of legitimate communication.

c. Telephones another person and addresses to or about such other person any lewd or obscene words or language.

Nothing in this section shall apply to legitimate business telephone communications.

(2) Harassing communications is a Class C misdemeanor.

A lot of people who are being hounded by debt collectors, creditors, or other folks who want money often ask me: “Isn’t this Harassing Communications?”

Well, unfortunately, a lot of the worst offenders are protected by the last part of the statute, which shields “legitimate business telephone communications.” Some small loan companies, payday lenders, and buy-here-pay-here car dealerships are often guilty of the worst sort of telephone harassment. And if they originated the loan or account, then they are not subject to the FDCPA. Since Alabama does not have its own debt collection statute, there often is no way to take action against original creditors to whom you actually owe money.

But what if they don’t have a legitimate business purpose? For instance, what if they are calling you and asking that you pay for someone else’s debt? Or if you have worked out a settlement and they decided to back out of it?

If that is the case, then you probably can do something about it.

But the harassing communications statute is a criminal statute, not a civil statute. Which means that if someone violates it, only the District Attorney or Alabama Attorney General can prosecute them for that crime. However, if they are committing a crime and their behavior is bad enough, then you may be able to personally them to court under a tort theory like outrage or intentional infliction of emotional distress.