FISHER'S LAW OFFICE NEWSLETTER
Welcome to the NEWSLETTER of Fisher’s Law Office, providing you with legal information you can use in your everyday life. In this newsletter we discuss issues of consumer debt. If you have credit card debt, an automobile loan or a home mortgage, this newsletter is for you! Any questions about any of the articles in this newsletter please don’t hesitate to contact us.
1. THE CREDIT CRISIS IN AMERICA
For years, the U.S. Federal Reserve kept interest rates at 1%, well below the rate of inflation. As a result, lenders from foreign countries and the U.S. extended credit to anyone and everyone.
Result? Americans today owe more money than at any time in history. And with the credit market in shock over the number of unpaid loans, new credit is almost impossible to obtain.
Creditors are hiring lawyers and suing to collect the money owed them. Many of our clients have found themselves in Court as defendants in lawsuits.
These matters are very serious and you should consult with legal counsel if you are sued for failure to pay your credit cards, car loans or home mortgage.
2. WHAT IF YOU ARE SUED FOR A CREDIT CARD DEBT?
Many banks that issue credit cards do not sue you when you default. Instead, the bank will send you a letter demanding payment. The bank might even call you and threaten suit, but after a while they’ll “write off” the debt.
Several years later they will “sell” the unpaid debt to a “debt scavenger”- a company that specializes in debt collection. Typically, the bank will sell the credit card debt for pennies on the dollar.
For example, if you owe $1,000.00 on your credit card, the debt scavenger might pay $20 or $30 for the debt. The purchaser will then sue you to collect the $1,000.00 and hope to make an enormous profit.
3. HOW CAN YOU DEFEND YOURSELF AGAINST A CREDIT CARD LAWSUIT?
For example, many debt scavengers do not have any of the following documents:
If you are sued for an old credit card debt your lawyer should answer the lawsuit and send a “Request for Production” demanding the credit card agreement, a history of charges and payments on the account and a copy of the assignment documents.
He should also send a “Request for Admissions” that the debt is stale and that the Plaintiff doesn’t have the documentation to prove its case. If the documents are missing, chances are the creditor will dismiss the case against you.
Lastly, many creditors wait too long to file a lawsuit to collect the debt. The “Statute of Limitations” for suing on a breach of contract in Florida is five years under F.S. section 95.11
If you’ve had no activity on your account for the past five years, your lawyer should file an “Affirmative Defense” stating that the debt cannot be collected because it is too old.
4. ATTORNEY’S FEES IN CREDIT CARD CASES
Most credit card agreements have an attorney’s fees clause giving the bank attorney’s fees if it is required to file a lawsuit to collect on the debt. Be aware that under Florida Statute Section 57.105(7), a bank is liable for your attorney’s fees if it dismisses the case against you. Therefore, if the case against you gets dismissed, you may have a right to seek attorney’s fees.
Warning! You must request attorney’s fees in your answer to the lawsuit. Also, a motion for attorney’s fees should be filed within 30 days of the date the case ends.
Credit card debts are rarely as straight forward as they seem; the debts are old, there is no paperwork to back up the claim and the party that is suing you cannot prove their status as assignee of the debt. Always seek legal counsel whenever you are sued for a credit card debt.
5. AUTOMOBILE LOANS
Automobile loans carry high interest rates and often, the loan balance exceeds the value of the vehicle.
If you own an SUV (Sport Utility Vehicle) or pickup truck, your vehicle loan balance is probably much greater than the value of your vehicle.
If you are sued for failing to pay on the vehicle, remember the following:
6. HOW DO FINAL JUDGMENTS “EXPIRE”?
Judgments that are recorded in the public records act as a lien on any property that you own.
If you have a judgment against you, consider the following:
7. EXEMPTIONS THAT PROTECT YOU FROM JUDGMENT CREDITORS
Florida is one of the most debtor friendly places to live in America. We enjoy many exemptions that protect us from creditors:
8. CASE OF THE MONTH
Our client was supporting her two children. A creditor garnished over $5,000.00 from her wages over the course of a year. Fisher’s Law Office, P.A. reviewed the documents and the garnishment and realized that the garnishment was inappropriate and illegal!
Fisher’s Law Office filed a Motion to Dissolve the Writ of Garnishment alleging that our client was a “head of household” because our client was providing more than one half of the support for her two children. (Note that the children do not have to be minors.)
The judge ruled that the garnishment was not only inappropriate but that the $5,000 that had been previously taken from her must be returned to her!
Moral? Never ignore a Writ of Garnishment. Take action to protect yourself when a judgment creditor garnishes your wages.
9. ONE THIRD OF ALL HOMES IN AMERICA PURCHASED BETWEEN 2003 AND 2008 ARE “UPSIDE DOWN”
What does this mean? It means that over 33% of homes purchased in the last five years are worth less than the mortgage balance.
As homeowners’ homes have declined in value, adjustable rate mortgages are resetting upward. Meanwhile, the cost of homeowner’s insurance and property taxes continues to skyrocket.
As a result, many working class families cannot afford to pay their home mortgage or simply refuse to pay for an asset they will never be able to completely own. No wonder the foreclosure rate in America is at the highest rate on record.
10. HERE ARE SOME POINTS TO REMEMBER IF YOU ARE ABOUT TO ENTER THE FORCLSOURE PROCESS
11. WHAT SHOULD YOU DO WHEN YOU ARE SERVED WITH A FORCLOSURE COMPLAINT?
The worst thing that a homeowner can do is to panic and move out the moment he is served with a lawsuit for foreclosure.
Instead, if you are sued in a foreclosure action, you should seek legal counsel. Your lawyer might suggest filing a “Motion to Dismiss”, if there are problems with the bank’s paperwork.
The lawyer might also file an “Answer and Affirmative Defenses” and ask for “Discovery” from the bank consisting of Interrogatories and Requests for Production.
Practice tip: At a minimum, your lawyer should request a history of the mortgage account and a copy of all assignments from the loan originator to the current owner of the mortgage and note.
There are literally millions of Americans who are involved in the foreclosure process and it is expected that it will take many years for the foreclosure mess to be sorted out. Because some banks fail to follow the law, represented homeowners may have extra time to make a plan. Under a recent change in the federal law, 400,000 families could be held by a FHA Refinancing Program. The program will call for your lender to reduce the balance of your loan to 80% of the fair market value of your house. If you sell your home for a profit in the future, the FHA will participate in the profit that you make from the sale of your home. This program may be the answer if you are unable to make payments on your home.