If you’ve defaulted on a credit card, how long can the bank wait to sue you? Believe it or not, this is a surprisingly complex question. In most lawsuits, the statute of limitations is simple. Car wreck cases have to be filed within two years. Ala. Code Sec. 6-2-38(l). So […]
Ferry & Nicholas Sends Advertisement Letters to Debtors in Alabama. I believe they may be sending false advertisements. If you have been sued by a debt collector or credit card company in Alabama, you’ve probably received a letter from a company called Ferry & Nicholas. They claim to be “professional […]
Sometimes, Debt Collectors and Collection Lawyers File False or Bogus Service Returns to Get a Judgment Without Notifying You. Here’s what to do about that. Last week, we discussed how to get a default judgment vacated if the Service Return showed that you were not served properly under the Alabama […]
Midland Funding, LLC sued my client over an alleged balance due on a Target Credit Card. We went to trial and won. Like a lot of Americans, my client had suffered some financial setbacks that caused her to fall behind on some of her bills. When she was unable to […]
Ever Wonder What Really Happens After You Can’t Pay Your Bills? If you have not yet had the pleasure of money being forcibly collected from you, then you may wonder just what happens if you don’t pay a debt. Of course, your creditors are probably going to threaten you with […]
My client, Mr. Roberts, had been sued by JH Portfolio Debt Equities for an alleged credit card bill that had gone unpaid. Mr. Roberts had never heard of these people and hadn’t even obtained a credit card from Bank of America – the people they claimed to be collecting for. […]
If someone owes you money, you cannot wait forever to take them to court. The law places a time limit on every lawsuit. It’s called the Statute of Limitations. And the Statutes of Limitation exist for good reasons. Evidence gets lost. Memories fade. People move on with their lives. Business would […]
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.