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Collection Defense

7 Steps to Consumer Due Diligence

By | Collection Defense, Consumer Rights, Foreclosure Defense / Real Estate, General / Litigation | No Comments

Due Diligence is a phrase that’s commonly tossed around in the consumer world, but has a special meaning within the context of a legal dispute. In a broad sense, it refers to the level of judgment, care, prudence, and investigation that a person would reasonably be expected to do under particular circumstances. If a consumer hasn’t done his/her due diligence, it could mean the difference between winning and losing a case, and will pose challenges to being able to dispute the contract terms or performance of the contract.

In the legal world, Due Diligence actually means a complete and appropriate review of documentation and facts by a party, before purchasing a good/service, or engaging in business with another party. It is a full and complete review using the advice of professionals as needed, so that when one is done, one knows all there is to know, before buying or engaging in business.

Due Diligence IS NOT similar to kicking the tires on a car. Due Diligence IS similar to taking the car to a garage, having it checked out completely, and personally checking out every part that does not require the expertise of a mechanic.

BASIS DUE DILIGENCE BEFORE ENTERING INTO CONTRACT

  1. Who exactly is going to be entering into the agreement?
  2. What is the price/ consideration for the products or services?
  3. What exactly are the products or services to be delivered?
  4. When and where are the payments, products, or services to be delivered?
  5. How long is the term of the agreement? (One-time; Month-to-Month; A year etc.)
  6. What constitutes a default or non-performance under the contract?
  7. What is the cancellation policy or early termination policy?

At minimum, all consumers should be fully clear on the 7 terms listed above, before entering into any agreement. There is no real valid excuse under the law for not clarifying these basic questions prior to signing any contract. Depending on the type of contract or transaction, there might be many more questions needed to be asked. Do your due diligence accordingly.

In addition, the consumer is required to read the contract thoroughly (front and back) prior to signing it (or hire someone to help), to ensure that the verbally communicated terms are consistent with the written contract terms. Do your due diligence. The best time to challenge a bad contract is before entering into one!

Four Legal Resolutions for 2018

By | Collection Defense, Consumer Rights, General / Litigation | No Comments

If you are like the 90% of people, chances are you made one or more New Year’s Resolutions for 2017 and did not follow through. Legal Resolutions may have more negative consequences associated with failure to follow through. Early legal intervention saves time, money and emotional stress. There’s nothing worse than finding out that a small issue that could have been handled with little emotional and financial stress has now snowballed into a major disaster. Take the first step towards your legal resolutions TODAY.  55ef3da0dae81ce9ac006099e3035dff--first-week-new-years-resolutions

Whatever your New Year’s Resolutions, the simplest way to accomplish them is to constantly chip away at them. Forming new habits is key. Take the initial steps and if more action is needed, you will have the momentum to follow through, by mere habitual practice. You don’t need to have a clear plan of execution for the whole month, quarter, or year, just for what needs to be done TODAY. Do this everyday and your new year’s resolution is accomplished soon enough!

 FOUR LEGAL RESOLUTIONS FOR 2018

1. Get your criminal record cleared. The state of Texas has a statute that permits eligible individuals to expunge or seal their records. Find out if you are eligible and get this done as soon as possible because these records will haunt you. Criminal records can have a devastating effect on your chances for employment, renting, immigration, admission into law school, professional licenses and so on. Shocking? Yes. I agree it isn’t fair, but that is where clearing your record comes in. It can be done.

2. Handle Collection Notices. Following several Collection Notices, creditors will usually file a lawsuit and seek a judgment. Be proactive. If you’ve been receiving such Notices, take a deep breath and review them. There could be a settlement offer in the Notice (everything is negotiable), or it could be a case of mistaken identity. You won’t know unless you address the issue. If you need help with disputing the debt or settling it, seek legal help before the creditor takes a judgment against you. A judgment on your credit report is one of the worst things that can be on there, in terms of how negatively your report will be viewed by future creditors, especially mortgage lenders. Don’t delay. Act today.

3. Know your credit score and improve it. According to Forbes.com the average credit score has gone up over the years and is now 700. People with scores 750+ get the better deals, best interest rates (cost of borrowing), and much more access to credit. Chances are your score could be improved. Talk to a professional TODAY that can analyze your credit reports and guide you in what actions to take to improve your score. Did you know that your score affects all aspects of your life such as interest rates, credit limit, renting, insurance quotes, employment etc.? Again, this may not always be fair, but this is the way the system works for now. You owe it to yourself to at least get expert eyes to look at your reports to see what you can do proactively to improve your score.

4. Get your Will drafted or updated. We all need one of these – no ifs or buts. When we are young and healthy, we tend to feel invincible. The idea of a Will may seem ridiculous or a little morbid. You may say; “I am too young”; or “Nah, I don’t own any assets that can be put in a will.” The truth is that you do need one, unless you want the State to decide what to do with your things. If you have brought a child into this world, you definitely need a Will. You owe it to your loved ones. A basic will provides for expenses, lists an executor or personal administrator, and provides for specific distribution of real and personal property. It will also appoint a guardian for minor children. People over age 21 with no children may need one too, at least to appoint a power of attorney for medical/ incapacitation reasons. It always makes it easier for loved ones left behind to sort things out. Already have a Will? Could be time to review and update it.

Consult an attorney for more information on any of the above, or contact our office for help. If we don’t handle an area, we have recommendations for excellent attorneys. All the very best in 2018!

Recourse vs. Non-Recourse Loans

By | Collection Defense, Consumer Rights, Foreclosure Defense / Real Estate, General / Litigation | No Comments

Recourse loan means that the lender may collect the outstanding loan balance, even after seizing and selling the collateral. Non-recourse means the lender only gets up to the value of the collateral and the rest of the outstanding balance is wiped out.  The outstanding balance after applying sale proceeds from collateral, is called the deficiency. The lender has two years from date of foreclosure sale to file suit to collect any deficiency.

Some states don’t allow recourse loans at all and are therefore called non-recourse states. Texas is generally a recourse state. Commercial loans are all recourse loans, unless specifically negotiated as non-recourse. Purchase Money Loans have recourse but Home Equity loans and Reverse Mortgages have no recourse unless such loans were obtained by fraud. Purchase Money Loans are those loans used to actually buy the property. 

Many homeowners have two mortgages on their home – a first and a second mortgage. Lenders rarely pursue deficiencies on the first mortgage unless the deficiency is a sizable amount. Following foreclosure by the first mortgage lender, second mortgage lenders will sometimes pursue a deficiency judgment.

In a deficiency lawsuit, the borrower/ homeowner has the right to argue that the property was sold for less than the Fair Market Value. If able to prove this to the court, the deficiency amount will be adjusted by applying the appropriate Fair Market Value to the then existing loan balance (as at the time of the foreclosure sale.) If successful, this will reduce the overall deficiency amount. 

Do This When Sued for a Debt

By | Collection Defense, Consumer Rights, General / Litigation | No Comments

Have you just been served with a collection lawsuit? Sucks! Make sure to protect yourself by doing the following things:

  1.  File an Answer to the lawsuit.
  2. Answer any Discovery Requests.
  3. Request Debt Validation from Plaintiff.
  4. Settle (if debt validation is satisfactory).
  5. Attend court hearing to dispute the debt (if no settlement).

File an Answer which includes defense of Statute of Limitations if you believe the debt is too old to be legally collected. Statute of Limitations is 4 years in Texas  – usually calculated from time of last payment. If Discovery was served with the lawsuit, you have 50 days to respond.

Request Debt Validation which will include asking for original loan documents, credit card application, proof of assignment (if Plaintiff is not the original creditor), proof of all charges and payments etc. The plaintiff is the party that is suing you whose name is on the court document.

Settle the Debt by making an offer of settlement to the plaintiff. Start low at about 20% of the total debt, so you have room to negotiate. Lumpsum cash offers are most attractive to creditors. However, ask for a repayment plan if you need one but the settlement amount might be higher. Negotiate that creditor will not file a judgment against you in the meantime OR that the judgment will be released upon final payment.

Attend Court Hearing by showing up at the scheduled date. The court clerk can tell you when the date is, if you call to the clerk. Prepare your side of the story, challenge the debt as needed, and hope for the best. Remember, you can still settle up until the day of the final hearing.

You can find help for the above at a local law library which might have forms for you to use. Some courts also have basic forms available. If uncomfortable handling any of the above by yourself, be sure to enlist the help of a lawyer immediately so you can protect your rights and your credit.

What’s In Your Wallet?

By | Collection Defense, Consumer Rights | No Comments

It’s time for the yearly check up. So, what’s in your wallet? Or more aptly, in your credit reports?

Improve Your Credit Score! As of 2015, according to FICO, the national average credit score in the U.S. is 630. Credit scores can go up to 900 and a score of 750+ is ideal. If your credit score can stand to be improved, talk to a professional that can analyze your credit reports and guide you in what actions to take to start improving your score. The credit score affects all aspects of life such as interest rates, credit limit, renting, insurance quotes, employment etc. Most credit reports have errors in them that can be fixed to boost the score.

I recently met with a top executive at Regions Bank who explained some of their financial programs to me. Their secured credit line program got my attention. Very few banks offer this program and the few that do, require a hefty initial deposit to open the account. At Regions, one can be opened for under $300! This is an excellent way to rehab credit rating because Regions reports monthly to the credit bureaus which quickly improves the score.

For more information on how to take advantage of this program, contact Bill Ownbey at 512.250.2242 William.Ownbey@regions.com

BONUS SUGGESTION: Draft or Update Your Will! The idea of a will may seem far-fetched and even a little morbid, especially when we are feeling healthy. You may say; “I am too young”; or “I don’t own any assets that can be put in a will.” You owe it to your loved ones and things get very messy and expensive when there is no will. A basic will provides for expenses, lists an executor or personal administrator, and provides for specific distribution of real and personal property. It will also appoint a guardian for minor children. You may also want to appoint a power of attorney for medical or other reasons. It always makes it easier for loved ones left behind to sort things out. Make sure to consult an attorney for more information on getting a Will drafted in 2016.

Let’s make it a good year!