#Slay Your Student Loan Series: Part I

Slay Student Debt

Student Loan.  It’s one of those phrases that gives you the willies just by saying it out loud.  It’s also a phrase akin to “Beetlejuice” – say it too many times and the bill collector is likely to jump out of a mirror and grab your wallet.  (Can you tell I’ve been watching horror shows lately?  Bates Motel is a fave.  Alas, I digress).  The best way to protect yourself from these monster-esque debt collectors is to understand your student loan, as well as your rights.  Grab your ax, its time to slay.

Let’s go back to basics:  you first need to figure out the nature of your loan.  The nature of your loan is either Federal or Private.  If your loan was issued directly by the U.S. Government (Department of Education), then your loan is undoubtedly FEDERAL.  If your loan was issued by a private banking institution (i.e. Sallie Mae, Wells Fargo, Discover, etc.), then your loan is PRIVATE.  Simple, right?  Not really.  Here are some scenarios that require a little more investigation:

  1.         You consolidated your loans.  Consolidation means that you are taking two or more loans and turning them into one big loan.  If you consolidated two or more federal loans through the federal consolidation program, congratulations (or maybe not), you still have a federal loan.  If you consolidated two or more private loans, you still have a private loan.  If you consolidated a federal loan and a private loan, you now have a private loan.  (The federal loan consolidation program only permits you to consolidate federal loans together.  Therefore, if you add any private loans, you now have a private loan.)
  2.           You have a hybrid loan.  This one is a little trickier.  And it is also called an FFELP loan.  An FFELP loan (described in more detail here) is usually a loan issued by a private institution, but has federal elements.  For example, a Stafford loan is part of the FFELP program.  Under the terms of these loans, the federal government pays for any interest that accrues while the loan is deferred.  Grab your ax folks, the waters get murkier.  Some of these loans are owned by the federal government (Department of Education) and therefore the federal government collects on these defaulted loans directly.  Some of these loans, on the other hand, are owned by a private institution (i.e. Sallie Mae).  FFELP loans that are owned by a private institution are assigned to a guaranty agency for collection.  Visit this website to identify who owns your loan and determine whether your loan is federal or private (only federally-owned loans are listed here, so if yours isn’t here, it’s private).

Whew.  This sleuthing was exhausting.  Take some time to identify whether you have a federal or private student loan.  Gather any paperwork you may have and scan or copy it for safekeeping.  Write down your investigation notes.  Create a file, and get ready to #slay your student loan throughout this series.  Remember, if you ever need help understanding your student loan, reach out to an experienced consumer attorney (like me.  duh.).

Please note that this article is for informational purposes only and does not create an attorney-client relationship, nor does this article purport to give legal advice.  Everyone’s situation is different.  If you have legal questions, you should contact a licensed attorney.  Written by Shera E. Anderson, Esq. in Sunrise, Florida.

Learning the Lingo: Dockets

Plain and simple:  a docket is a timeline that shows you the history of a court case from cradle to grave.  And sometimes beyond the grave, if you are dealing with zombie debt.  Dockets are very useful tools for attorneys – and clients – to determine and develop strategy.  Pro tip:  if you meet with an attorney who has not looked at your docket or does not know how to use a docket, run.  RUN.  R. U. N.

Every time a client comes to me for help defending them in a lawsuit, my first plan of action is to pull the docket that correlates with my client’s case.  How do you “pull” a docket?  (It’s an archaic phrase for a relatively easy modern process, I know.)  Three simple steps to pull a docket in Florida:

  1.  Go to Google.  (Or your search engine of choice.)
  2. Type in the county that you were sued in (it should say it at the top of your court paperwork) followed by clerk of court.  Example:  Broward Clerk of Court, Miami Dade Clerk of Court, Brevard Clerk of Court, etc.  Click on the link to the official clerk website, and follow the directions to access Court Records.  (All counties in Florida electronically file court documents; however, the process for obtaining a docket is different for each county).
  3. Fill in the information (usually your first and last name should be sufficient, unless you have a highly common name, then you may want to try different identifying information like case number (which is also on your court paperwork) or plaintiff’s name) and press the magic button (aka submit).  And voila!  You should see a link to your court case.  Click and revel in the docket glory.

Pulling a docket is also a useful tool to determine whether you have actually been sued.  Sometimes people are sued and they don’t even know it.  Shocker, I know.  But it happens more often than you think.  Many times a person is not served with process or not properly served, and therefore that person has no clue that they were even sued.  If you suspect that someone has sued you, check to see if there is a docket.  If there is no docket, you weren’t sued.  If there is, well, time to speak to an attorney.  And if you were sued by a creditor, you can speak with an attorney like me!

Sidenote:  I love dealing with consumer cases.  They are like really awesomely awesome jigsaw puzzles just waiting to be solved.  Bring me your toughest student loan or credit card or garnishment or judgment questions – I would love the opportunity to try and solve the puzzle!  And my family would appreciate it too, because I would be too busy to nag them to clean up.

But, I digress.  The moral of this story is CHECK THE DOCKET.  Use it.  Love it.  Understand it.  Or find an attorney that does.  Like me.  (Shameless plug).

Please note that this article is for informational purposes only and does not create an attorney-client relationship, nor does this article purport to give legal advice.  Everyone’s situation is different.  If you have legal questions, you should contact a licensed attorney.  Written by Shera E. Anderson, Esq. in Sunrise, Florida.

 

 

Your Credit Report and the Zombie Apocalypse.

Zombie Debt

I know what you’re thinking.  Why on this green Earth should I worry about my credit report when I am busy fighting off man-eating zombies with half of a 2 x 4 and a candlestick?  OK.  Well.  When you put it that way, forget about the credit report.

I’m not talking about actual man-eating zombies.  I am talking about what we in the industry refer to as “zombie debt” aka debt that is so old that you forgot you even owed it.  Old debt dies and goes away, right?  Wrong.  Old debt dies, and then comes back to life as a zombie and uses debt buyers to haunt you until you are scared and pay.

Here’s the DL:

You took out a credit card when you were 18.  You needed it for essentials:  rent, textbooks, beer.  You know.  Survival.  Well you weren’t employed when you got the credit card, and since you majored in underwater basket weaving, you were unemployed for quite some time.  You made a few minimal payments, and then stopped paying altogether.  And that was twenty five years ago.  Now you are a successful underwater basket weaver with your own basket weaving practice.  And suddenly you get a call (or a letter) from Mr. Debt Collector saying that they purchased the debt from your original credit card issuer and you must pay.

DO NOT PAY.  IT IS LIKELY A TRAP.

Unless we are talking about a federal student loan, or other items of that nature with no limitations period, the situation above is a trap.  It’s a zombie debt trying to get revived.  If you make one measly little payment because you “feel bad” you are restarting the statute of limitations (which expired twenty one years ago) and giving your new zombie friend another opportunity to sue you for your unpaid credit card.

Like most claims, the rule for suing for an unpaid credit card is simple:

YOU SNOOZE, YOU LOSE.

If your original creditor took too long to collect on the debt (i.e. more than three or four years depending on the terms of your credit card agreement), they CANNOT SUE YOU (of course, unless there is some tolling issue, but that is not really a mainstream problem).  Plus, it may not even be showing on your credit report any more due to the age of the debt.  (Keep in mind it is ALWAYS good idea to check your credit report to make sure).

My suggestion?  Ask a consumer attorney.  (Like me, duh).  A consumer attorney should be able to tell you immediately whether you are being attacked by a zombie, or whether the collection attempt is legit.  Basically, consumer attorneys are super-awesome zombie-fighting heroes that can save your ass-ets.  Your assets.  Your financial assets.  Put down the 2×4 and call a consumer attorney before you try to fight off zombie debt on your own.

Please note that this article is for informational purposes only and does not create an attorney-client relationship, nor does this article purport to give legal advice.  Everyone’s situation is different.  If you have legal questions, you should contact a licensed attorney.  Written by Shera E. Anderson, Esq. in Sunrise, Florida.

Yes, You Can Get Rid of a JUDGMENT. (Even an old one).

Judgment. The word sounds so…negative. And permanent. The truth of the matter is that a party must follow all of the rules in order to obtain a valid judgment. If a party fails to follow the rules, the judgment is rendered void or voidable, depending upon which rules the prevailing party failed to follow. Before we discuss the mechanics of void and voidable judgments, let’s go back to basics: what is a judgment?

Simply put, a judgment is a decision or ruling entered by a court. A more literal definition is that a judgment is a piece of paper, filed with the Court, that gives or awards a prevailing party the relief it is seeking (usually money from the non-prevailing party).  A judgment will usually show up on a person’s credit report and can prevent (or, at least, make it more difficult for) a person to:  purchase a car; lease a car; lease an apartment; purchase a house; obtain a loan or credit; etc.  Judgments can also trigger wage or bank garnishments in an effort to liquidate the judgment (aka a way for the judgment holder to get the money awarded by the judgment from the person against whom the judgment was entered).  Oh, and by the way, judgments accrue interest.  And in Florida, they are valid for 20 years.  And can be renewed.

But wait.  There’s more.  The right to collect on a judgment can be bought and sold (assigned) to another party.  Confusing, I know.  Judgments seem like a maze with no end, and attaching to your assets like a leech until your bank account is sucked dry.  Am I right?  Well.  Not exactly.  Remember, what your mother taught you:  rules were made to be followed.  And if a judgment holder did not follow the rules, the judgment may not be as permanent as he or she would like.

Let’s assume that you had a judgment entered against you 6 or 7 years ago for a defaulted credit card.  And you made a few payments.  And then you stopped.  And then your creditor (the judgment holder) issued a wage garnishment against you.  You’re stuck forever, right?  Well, as lawyers always say:  it depends.

Were you properly served?

Was there a default judgment entered?  If so, did you receive notice for and/or attend a hearing for the entry of the judgment?

Did the creditor attach the documents necessary to the original complaint or motion for judgment?

Was there fraud?

Some of these reasons could cause the entire judgment to unravel, eliminating the judgment and putting any money taken from you (voluntary payments or garnishment) and potentially put it back into your pocket.  These are issues that an experienced consumer attorney can identify and help you to navigate.  You may have claims under the FDCPA and FCCPA if there was any type of misleading or fraudulent activity.  Again, you need a consumer lawyer.  Like me.  (Come on, you knew the shameless plug was coming).

Take a look at your documents, and call a consumer lawyer.  Talk with them.  Ask the lawyer if your judgment is valid, void, or voidable.  Ask the lawyer if you are entitled to any reimbursement.  Take charge of your financial situation, and let an attorney handle the stress.

Please note that this article is for informational purposes only and does not create an attorney-client relationship, nor does this article purport to give legal advice.  Everyone’s situation is different.  If you have legal questions, you should contact a licensed attorney.  Written by Shera E. Anderson, Esq. in Sunrise, Florida.

Consumer Law Lingo: What is a Debt Buyer?

A “debt buyer” is a person or company (usually a company) that has purchased a debt for pennies on the dollar.

Wait a second.  Back up.  How does someone “buy” a debt?  Isn’t a debt where someone owes money?

Here’s how it works:  A credit card company (or other lender) offers you a credit card (or loan, etc.).  You accept the offer, and begin to use the credit card.  You use the credit card for gas.  Groceries.  Maybe a nice dinner here or there.  And then you lose your job or get sick and just can’t pay off the credit card bill.  You have now accrued what is referred to as debt.  And the company that issued you the credit card or loan has the legal right to attempt to collect the money that you owe to them (debt), because you entered into a contract with them (aka an agreement to repay borrowed funds).

Once you stop making payments altogether on your credit card or loan, the lender then closes your account pursuant to your agreement, and “writes off” (aka charges off) the debt for tax purposes.  Occasionally a lender will attempt to encourage you to make payments, but after awhile, the attempts cease.  After all, credit issuers are generally not in the business of collecting charged off or dead accounts.  They make their money from live accounts with active interest.  So now that the account is closed, how is the credit card company going to make their money back?

Brace yourself.  Are you ready for this answer?

THEY ARE GOING TO SELL, TO THE HIGHEST BIDDER, THE LEGAL RIGHT TO COLLECT THE DEBT THAT YOU ACCRUED.

WTF?

I know, but debt buying is a big industry, and the buying and selling of the legal right to collect a debt happens all of the time.

Is this legal?  Can my creditor sell my debt?  To answer this I have to call upon my years of law school and studies:  it depends.  Complicated answer, I know.  Simply put, it depends on whether your original contract permitted your creditor to assign its rights to another party.  Generally the contracts do.  Sometimes they don’t.  Regardless of whether your original creditor has the right to assign well, its rights, the assignment of your debt may work in your favor.

Sometimes, when creditors sell the right to collect a debt (and for reasons I have yet to understand), the paperwork regarding the debt is either “lost” or “destroyed.”  What does this mean?  This means that often, a debt buyer cannot prove the debt in a court of law.  If a debt buyer cannot prove a debt in a court of law the debtor wins.  Simple as that.  Granted, not all debt buyers choose to sue over a debt and just try to collect on it for decades (another practice you should be aware of – read my explanation here).   But those debt buyers that do attempt to sue generally back off the minute that the debtor hires an attorney.

Why?  Because the debt buyer knows that it CAN’T. PROVE. YOUR. DEBT.  And they don’t want to be sued for trying to collect a debt that they knew they couldn’t prove.

Moral of the story?  Protect your rights and hire a lawyer familiar with consumer law and debt defense.  (You know, an attorney like me.  Shameless plug).  It is always best to consult with an attorney to help you better understand (and protect) your rights.

Please note that this article is for informational purposes only and does not create an attorney-client relationship, nor does this article purport to give legal advice.  Everyone’s situation is different.  If you have legal questions, you should contact a licensed attorney.  Written by Shera E. Anderson, Esq. in Sunrise, Florida.

 

Three Important Steps to Protect Yourself from Debt Collectors

The phone rings and you nearly jump out of your skin.  You know its the debt collection company calling again about some debt you racked up years ago. You have a family to support now.  And rent or a mortgage to pay.  And a car payment.  And you have to eat.  You just don’t have enough money to pay off that debt, but the debt collector doesn’t care.  The debt collection company WANTS. ITS. MONEY. NOW.  You panic and ignore the call, but you know they will call again tomorrow.  Is there anything that you can do to make it stop?  YES.  Let me spell it out for you:  Y.E.S.  Get ready to tell the debt collector BYE BYE BYE (BYE BYE).  (OK sorry that last line took it too far.  #FanGirl #StillTheBestBoyBandEver).

Here are three important steps that you can take to protect yourself from a harassing or dishonest debt collector:

  1. Track all calls from your debt collector.  You can click here to download a free call log.  Make sure to notate the date, time, name of the caller (if you know) and company, and the details of the call (i.e. you asked who was calling and they hung up, etc.).  Keep this log going for as long as you can.  It will serve as excellent evidence in the future if the need arises.
  2. Request validation of the debt.  Send a letter to the debt collector specifically asking them to send you proof, or validation, of the debt that they are trying to collect.  Federal law grants you, the consumer, the right to request validation.
  3. Send a cease and desist notice.  Now, this one is a little trickier.  You have to wait until AFTER you have received your validation before you can request a cease and desist.  If you send the cease and desist notice first, the debt collector may be prohibited from sending the validation that you previously requested.  If you have not received a response to your validation request within 30-45 days (MARK IT ON YOUR CALENDAR), it is safe to send out your cease and desist.  Once you send out a cease and desist, the debt collector is prohibited from contacting you.  KEEP YOUR CALL LOG FROM STEP ONE.  Also keep any e-mails, faxes, and/or letters that you receive before and after the cease and desist notice.  All of this will serve as evidence should the need arise.

If these steps intimidate you, or if you have a debt collector that is totally oblivious to the law and fails to comply with your demands, CONTACT A LICENSED ATTORNEY that is familiar with consumer law.  Like me.  (Shameless plug.  Get used to it, folks).  In all seriousness, it is better to speak with an attorney and get your problem resolved.  Let the attorney worry about dealing with the debt collector so you can worry about the more important things in your life.

Please note that this article is for informational purposes only and does not create an attorney-client relationship, nor does this article purport to give legal advice.  Everyone’s situation is different.  If you have legal questions, you should contact a licensed attorney.  Written by Shera E. Anderson, Esq. in Sunrise, Florida.

Don’t Pay that Old Debt!

The debt collectors have a new trick up their sleeves:  trying to get YOU to revive an otherwise dead debt.

For example, let’s say that you charged up your credit card back in your college days 10 years (well, maybe 20 or 30 for some of us) ago.  You were paying it off for awhile, and then due to circumstances beyond your control (illness, loss of job, etc. – it happens to ALL of us), you were unable to maintain payments and your account went into default 5 or so years ago.  Unbeknownst to you (because debt buyers don’t always send the legal notices that they are supposed to), your account is charged off and sold for pennies on the dollar to NaaaaastyDebtBuyer, Inc.  (make sure you pronounce the “aaaaaa” part of NaaaaastyDebtBuyer with a little ‘tude).

Now, Naaaaaaasty DB (we’ll call them NDB from here on out) wants to make their money back.  And then some.  And then some more.  And how are they going to make their millions and millions of dollars?  (think cliche photo of Dr. Evil)  By collecting those dollars from YOU, of course!  Silly.

So they send you a letter asking that you pay them.  And offering you a “great deal” to settle your account for 30% of the balance (which, by the way, is likely still more than your original principal balance).  And then they put in this really small line in there along the lines of the debt being too old to take legal action, but that its best to make payments.  They think they are so slick.  Why are they so slick?  Because they are trying to TRICK you into making a payment on an old debt for which the statute of limitations (a legal barrier for filing a lawsuit to collect an old debt) has expired.  And this is likely a violation of federal and Florida laws.

What happens when you make that payment out of the goodness of your heart?  You restart the statute of limitations.  Now NDB has four more years to file a lawsuit against you.  And add on more fees.  And costs.  And interest.  And make their millions and millions of dollars.

But, now that you’ve read my article, you aren’t going to revive that old debt.  No.  You are going to #slay (a technical term for when a person “Litigates Like a GIRL,” usually followed by a “#yaaas”).  And you are going to protect your rights by sending a cease and desist letter or speaking to a licensed attorney.  Like me (shameless plug).  But in all seriousness, think about what you are paying and read the documents that debt collectors send you.  If you have any questions or concerns about what you are reading or receiving, or what the consequences of paying a debt buyer may be, please PLEASE contact a licensed attorney to help you out.

Please note that this article is for informational purposes only and does not create an attorney-client relationship, nor does this article purport to give legal advice.  Everyone’s situation is different.  If you have legal questions, you should contact a licensed attorney.  Written by Shera E. Anderson, Esq. in Sunrise, Florida.