If Someone Posts Private Photos, Videos, or Documents Online, You Can Fight Back in our last post, we discussed online defamation and what you can do about it if it happens to you. Today, I want to address the issue of online privacy and all the problems that can arise […]
Credit Associates advertises debt settlement services on TV and Radio. Are they a scam? I suspect that this outfit may be a scam, and I want to hear from anyone who has experience with them. I saw this television advertisement recently: A serious man in a business suit stares grim-faced at […]
Default Judgment Vacated for Fraud & Misrepresentation
This case was a particularly important one, in my opinion. I’ve written before about cases where I was able to reverse a default judgment after it had been entered because the Defendant was never served with the complaint. That is by far the most common way to reverse a default. But not the only way.
My client bought a car in 2007. It had a 24% APR and she reliably made her payments for about four years. Then the car broke down and since it was sold to her “AS IS – No Warranty,” she had to pay for the repairs out of pocket. The repairs would have cost $4,000. The car wasn’t even worth that much. So she gave it back to the finance company – Credit Acceptance Corp.
Three years go by. She gets sued by Credit Acceptance – they say the balance on the loan is $11,071.61. She calls the collection lawyer to try and make payment arrangements, but they wouldn’t accept any offer she could afford.
So she didn’t answer within the 30 days allowed by Alabama law. Credit Acceptance moves for a default judgment. They knew that they were in the superior position – my client hadn’t defended herself, so they were going to get a judgment without having to really prove their case. That’s how default judgments work.
But when the judgment was entered, it was not for the $11,071 she’d been sued for, but for over $19,000! How? They had asked for interest at 24% APR beginning January 1, 2012.
But the car hadn’t even been sold at a post-repo auction until July 2013! You can’t calculate a deficiency balance until you have sold the car. It just isn’t possible.
So how did a judgment get entered that was so obviously wrong? Because Credit Acceptance had one of their employees file a false affidavit with the court. Their affidavit stated that the amount owed on New Year’s Day 2012 was $11,071.61, when in fact that was the highest amount the debt could have been in July of 2013! So that is 19 months of interest (at 24% interest!) that they had no right to claim, yet in a sworn affidavit, they were seeking. In other words, Credit Acceptance blatantly lied to the court to try to steal over $4,200 from my client.
I filed a motion to set this judgment aside, and it was granted. Even the collection lawyer, to his credit, realized that something was way off with the affidavit.
You can do something about it. You must take action as soon as you can if you think that you or someone you love has been ripped off by a loan mod scams. You have rights that you may not even know about.
These scams are all over the place. I’ve seen at least three separate outfits that have tried to screw my clients. Most of them seem to be located in Florida, for some reason, but if they’re doing business here, we can absolutely take them to court here.
Even if they have “successfully” obtained a loan modification for you, they still may be breaking the law and harming you (without your knowledge) by committing bank fraud on your behalf. This is serious stuff. If you’re currently paying monthly fees to a “loan mod specialist” who hasn’t obtained a loan modification for you yet, then you need to stop paying them ASAP and ask for a full and immediate refund.
See, they’re not allowed to charge you a dime up front. And they’re also not allowed to instruct you to quit paying your mortgage.
Please don’t fall for these guys! Some examples I’ve seen that break the MARS rule:
- Ocean Legal Group
- Fresh Start “law firm”
- Pinepoint law group
Notice a pattern? They all pretend to be lawyers, when they’re not.
Sale Leaseback Scams and Foreclosure Rescue Scams are two types of scams that are popular when housing markets are doing well. Why? Because they prey on struggling people who have a substantial amount of equity in their homes. Particularly old people.
They’re really evil, but you can absolutely do something about it, as long as you take action as soon as possible, preferably within a year.
If you have older relatives who have been screwed by these sorts of deals, it is important to gather all of the paperwork as quickly as you can and call a lawyer to fix the problem.
Answer: Most of them are scams. Here’s how you know: 1) They promise legal advice, or pseudo-legal advice. “Forensic audits” are a big keyword they like to use.
2) They promise to stop a foreclosure without bankruptcy, unless they’re very experienced lawyers located in your county. Why? You can’t stop a foreclosure without a bankruptcy or TRO in Alabama.
3) Up Front fees. Or advising you to quit paying your mortgage company and start paying them instead. Use common sense. Call a real lawyer.
I regularly go to court to fight lawsuits against people who legitimately do owe some money to the people suing them. Is that morally acceptable? Is it ethical for me as an attorney? Yes, because being in financial trouble is not a crime. The people I represent have already tried to pay their bills, but their creditors have chosen to sue them instead of make affordable settlement arrangements. By fighting these suits, I send a message that you should consider working with your delinquent customers before taking them to court. Because if you go to court against a well-defended debtor, you may end up with nothing at all.
Moreover, the banks I fight are all based in big cities far away from my community. I consider it a duty to do what I can to keep as much of the hard-earned money of the people of South Alabama as possible right here. Our local businesses need customers whose wages aren’t being shipped out to Delaware or New York. Everyone wins if the justice system isn’t twisted into some giant collection machine.