debt


Opening Credits, the Q & A section of Creditcards.com, recently interviewed me about the law in Alabama as applied to minors who obtain credit cards in their own names.

Ms. Erica Sandberg writes a periodic advice column on the popular credit advice website CreditCards.com.  One of her readers had a question about the enforceability of a credit card contract entered into by a minor.  In Alabama, minority is a defense to a breach of contract lawsuit.  To enforce a contract, the creditor must show that there was an offer, an acceptance of that offer, consideration exchanged, capacity, and legality.  The age of the person entering the contract can create an issue regarding the person’s capacity to enter into a contract.  The general rule in Alabama is that contracts entered into by minors are voidable.  See Ex Parte Odem, 537 So.2d 919 (Ala. 1988).  This means that they aren’t automatically invalid, but the minor cannot be compelled to perform their obligations under the contract if they do not choose to do so.

This includes contracts for the extension of credit, such as a credit card.  In other words, if a lender is dumb enough to lend money to someone who isn’t old enough to enter a contract, the law doesn’t have much sympathy for them.  That’s why so many student loans are co-signed by parents or spouses.

Keep in mind, however, that lying on a credit application about your age or income can be considered fraud, and that could create a separate route for a creditor to take legal action against you.  Though to be honest, in hundreds of debt collection cases I’ve dealt with, I have never seen a credit card company or debt collector sue for fraud on a credit application.

The original Creditcards.com article can be found here:

https://www.creditcards.com/credit-card-news/can-minor-be-sued-for-defaulted-card-debt.php


Vacating Default Judgments, Part II – Alabama Debtor’s Rights Attorney Judson E. Crump

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 […]


Can the Repo Man Do That? The Law on Repossessions. – Alabama Consumer Protection Attorney Judson E. Crump 71

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 […]


How Long Does It Take to Get Garnished? – Alabama Consumer Rights Firm Judson E. Crump, PC

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 […]


Dealer Didn’t Pay Off Your Trade-In? What To Do About It – Alabama Consumer Protection Lawyer Judson E. Crump 5

“My Trade-In Vehicle wasn’t paid off by the Dealer.  Now it’s still on my credit report as past due.  What can I do?” Believe it or not, this question comes up fairly often.  You go car shopping, and you find a car you like, negotiate a value for your trade-in […]


Can you Keep your House if you file bankruptcy? – Alabama Bankruptcy Lawyer Judson E Crump

Can you keep your house if you file bankruptcy in Alabama? Sometimes.  Yes, that’s a disappointingly lawyerish answer and I hate that for you.  I really do.  Because i love straight answers as much as anyone else, and if you’re considering filing bankruptcy then things are probably not great in your […]


Alabama’s Exemption Statute – Why so stingy? – Alabama Debtor’s Lawyer Judson E Crump 2

DID YOU KNOW? Alabama (No Longer) has the weakest exemption statute in the country. This is a correction to a previous article I wrote, which has been made necessary by a positive change in Alabama law. In January of 2015, I wrote the following article about Alabama’s exemption statute: “What’s […]


CACH, LLC Credit Card Collection Suit Defeated – Alabama Credit Attorney Judson E Crump

One of our clients was sued by CACH, LLC, a debt buyer seeking to collect $2463 on an alleged credit card owed to GE Capital Retail Bank (GECRB) for an HHGregg Credit Card. We went to trial and defeated the lawsuit at trial in the District Court of Mobile County, Alabama. […]


A new NCLC Report is out on the student loan collection process.  For those of you that don’t know already, debt collectors can be viciously greedy and completely unhelpful for people in debt.  Naturally, we expect credit card companies and other profit-motivated businesses to sell or refer their unpaid debts to vicious collectors.  That’s how they maximize the value of their unpaid accounts.

But the government?  Surely the taxpayer-funded public-interest side of the social contract isn’t going to feed its young people to the hounds?  Actually, yes they are.

–Here’s the Report–

 

And for those that are interested, here’s a related post from F* the Banks!


Great article by the New York Times.  Even though consumer lawyers like me have been saying the same thing for years, putting it into the NYT will make more people understand what they need to know about the modern debt collection industry.

 

http://www.nytimes.com/interactive/2014/08/15/magazine/bad-paper-debt-collector.html?hp&action=click&pgtype=Homepage&version=HpSum&module=second-column-region&region=top-news&WT.nav=top-news&_r=1