Judson E. Crump, PC

Payday lenders keep calling me after filing bankruptcy. What do I do? – Alabama Bankruptcy Attorney Judson E Crump

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We’ve all seen the TV commercials:

“Stop foreclosures, wage garnishments, and repossessions NOW!  Call Alabama Bankruptcy Attorney Passem Tuaparalegal TODAY!”

And if you’ve filed bankruptcy, the primary reason you did so was to stop all of your creditors from calling you, taking your paycheck, taking your house, and doing all the annoying stuff that creditors do when they want your money.  What you paid for was this thing called the Automatic Stay.

The Automatic Stay.

Section 362(a) of the Bankruptcy Code says that the filing of a bankruptcy petition “acts as a stay, applicable to all entities of —

(6)any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title;”

It means exactly what it says.  Your bankruptcy petition stops all collection attempts.  ALL COLLECTION ATTEMPTS.

But as we well know, just because a law exists does not mean that everyone follows it.  Sometimes, creditors keep calling and pestering you anyway.  Why?  They don’t think you’re going to do anything about it.  They think that they’re immune to the bankruptcy because you didn’t tell them about it before you filed.  They may think that they can keep going after you as long as you have some property that you pledged them as collateral for the loan.  Sometimes they just don’t care.

So what do you do?

You sue the bastards.

Section 362(k) – probably my favorite part of the Bankruptcy Code – says that if a creditor willfully violates the automatic stay, you can sue them for whatever damages it causes, plus punitive damages and attorneys’ fees.  That’s great news.  Willfully, according to the U.S. Supreme Court in Safeco v. Burr (2006), includes any action taken “in reckless disregard” for the law.  What does that mean?  If they know about your bankruptcy and continue to try and collect anyway, it’s willful.

Here’s an example.  A payday lender keeps pestering you.  Calling you at home, calling you at work, threatening to call your references, threatening to show up at your job and embarrass you in front of your co-workers and friends and family.  So you file bankruptcy.  The next time the jerk calls, you say “I’ve filed bankruptcy and my attorney is Judson Crump.  His number is 251.272.9148.  Don’t call me again.”

And the payday lender employee just laughs in your face and keeps asking you for money.  You hang up.  They call again.  They have violated the automatic stay.  Willfully.  You can drag them into court to answer for that.  If the court finds that they’ve broken the law, they have to pay you and your attorney for whatever damage it causes: including emotional distress damages.

Some bankruptcy specialists really only specialize in the routine aspects of filing and managing bankruptcy cases, and don’t have the staff or the time for litigation against creditors.  When my clients inform me that a creditor with definite knowledge of the bankruptcy has continued to call or otherwise seek to collect, I file suit immediately.  There is no need for a warning shot or a cease and desist letter.  Those are for creditors that accidentally sent a letter or billing statement before they knew about the bankruptcy.

If you call your lawyer to report a creditor that keeps calling you after learning of the bankruptcy, and doesn’t want to take any action against the creditor or collector, you can hire another lawyer to represent you just for the stay violation case.  I’ve handled several stay violation cases and enjoy them.  If you are looking for an attorney in Alabama to take action against an auto dealer, payday lender, collection agency, or other creditor who is violating your rights in bankruptcy, call me at 251.272.9148 today.

How to Answer a Debt Collector Phone Call – Alabama Consumer Credit Attorney Judson E Crump

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My phone keeps ringing and ringing with calls from numbers I don’t recognize.  I know they’re bill collectors trying to get me to pay some old credit card I used to have.  I don’t really feel like dealing with this crap, but is can I get in trouble for not picking up?

NO.  There is no penalty for choosing not to answer a phone call from a debt collector.  The only communications from your creditors that you can get in trouble for not answering are lawsuits.  And lawsuits cannot be served by telephone; they must be served in person or by mail.  If you do get served with a lawsuit, you MUST answer it quickly.  Read about how here.

But as a general rule, if it is important, it will be in writing.  Period.  So answering debt collector phone calls is entirely optional.

Personally, I recommend answering the phone call for two reasons: First, it might be a quick way to work out a debt settlement.  Some debt collectors genuinely do want to try to work out a deal you can afford.  Others are just assholes.  The only way to know the difference is to pick up the phone.

Second, talking to a collector is the only way to get useful information, like who they are, where they are located, and what their corporate identity is – in other words, all the information you need in order to sue them for violating the FDCPA.  Most FDCPA violations occur during telephone calls.  They don’t usually write letters containing obvious legal violations like profanity or bogus threats to come take your furniture.  Collection agency callers feel more free to be jerks over the telephone, and that’s when they’re most likely to

How to Answer a Collection Lawsuit in Alabama – Alabama Consumer Credit Attorney Judson E Crump

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When you’ve been served with a lawsuit, the most important thing is to take action immediately.  Answer it before the deadline.  How do you answer?  It’s really simple: you just write down your response to the lawsuit on a piece of paper and take it to the clerk of court.  They receive it and enter it into their records, and then the Court will read it and depending on what your answer says, either enter a judgment against you or set the case for hearing.

Drafting the Answer.

Most of the time, this is pretty easy.  If you disagree with any of the allegations or just want to have your day in court, you can write a “general denial,” which basically says “This is your case: prove it.”  A general denial looks like this:

“I deny all material allegations and demand strict proof thereof.”

Federal court cases require more specificity, but luckily 95% of all collection suits are filed in state court, so the Alabama Rules of Civil Procedure govern the process.  And under the Alabama Rules of Civil Procedure, you can just enter a general denial and that will set the case for trial.

So even if you don’t think you have a defense, you can file a general denial and that will get your case set for a court hearing.  Maybe they’ll give you a good settlement offer.  Maybe they won’t show up with any proof.  Maybe they won’t show up at all.

Defenses & Counterclaims.  If you do have defenses, the answer is the time to present them.  In fact, any defense that you don’t put in your answer can be lost forever.  So here is where you may need some legal help.  Is the debt to old?  The statute of limitations may bar the lawsuit.  Here are the most common statutes of limitations for collection suits:

Contract (including credit card cases where they have a signed contract): 6 years

Credit Card (if they have proof of written statements mailed to you): 6 years

Credit Card (without a copy of the contract or written billing statements): 3 years

Auto Loan: 4 years

If they do have a copy of the contract, look at the contract for governing jurisdiction.  Some contracts may say “this contract is governed by the law of Georgia.”  If so, the GA statute of limitations could give you a defense.

Statutes of limitations run from the date of the alleged breach, which typically means the last time you made a payment.  If you last made a payment on a car note in March 2010, and they sue you on or after April 2014, then they lose.  Period.  Even if you owe $500,000, they still lose.  Furthermore, a lawsuit filed by a debt collector after the statute has run is a violation of the Fair Debt Collection Practices Act (FDCPA), and you are the one who can go after them for money.

There may be counterclaims as well.  Have they violated the Truth in Lending Act?  The Fair Debt Collection Practices Act?  The Fair Credit Reporting Act?  The Alabama DeceptiveTrade Practices Act?

Here is an answer I recently filed for a client where I saw a potential TILA violation:

Answer with TILA Counterclaim in Auto Loan Deficiency Case

Feel free to adapt it to your own ends.  It’s public record anyway.

If you think you may have counterclaims against creditors, debt collectors, or mortgage companies who are suing you, then you need to speak with an attorney who can help you.  Not a bankruptcy attorney, a real consumer rights attorney who will actually defend you and not just file a bankruptcy and pretend that you have no other rights.

So get out there and fight back!  If you have a collection lawsuit story to tell, let me know.

"Licensed in Alabama and Texas. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The use of this website DOES NOT establish an attorney-client relationship between Judson E. Crump, PC and you."