Arizona Statute of Limitations Law for Repossessed Car is Four Years

Collecting a Deficiency Balance on a Car Loan.

When an Arizona consumer loses a car to repossession, the bank typically sells the car and applies the proceeds from the sale to the balance owing on the loan. If the car does not sell for enough to pay off the loan balance, the bank will usually try to collect this balance — known as a deficiency balance — from the Arizona consumer. Other times the bank will sell this “loan balance” to a third party or “bad debt buyer” who then tries to collect from the debtor.

The Lawsuit Must be Filed within Four Years of Default.

A creditor, whether the bank or a bad debt buyer, has only four years from the date of default to file suit against an Arizona debtor to collect the deficiency balance for a car loan. A.R.S. § 47-2725 states:

      A. An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued.

The cause of action accrues no later than when the car is repossessed. If a creditor repossesses the car then clearly it considers the account in default. However, in most situations payments have been missed for several months before the car is actually repossessed, so the four year statute of limitations period may have begun to run several months before the car is actually repossessed.

Statute of Limitations is an Affirmative Defense.

In order for a consumer to be protected from judgment under Arizona law, the defense of statute of limitations must be raised in the lawsuit by the consumer. If the consumer fails to assert the defense of statute of limitations, then the court may give the bank or debt buyer judgment.

Find Out if the Statute of Limitations Defense Applies to Your Case.

I regularly represent Arizona consumers who have been sued for deficiency balances on repossessed cars.

If you are an Arizona debtor who has recently been served with a lawsuit to collect an auto loan deficiency, please call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a free phone consultation.

Arizona Consumer Sues Gurstel, Staloch & Chargo for FDCPA Violations.

My office recently filed suit on behalf of an Arizona Consumer again the Minnesota law firm of Gurstel, Staloch & Chargo, P.A. (Gurstel also has offices in Tempe, Arizona) for violations of the Fair Debt Collection Practices Act (FDCPA). The lawsuit alleges that Gurstel continued to attempt to collect the debt from the consumer even though she had previously sent them written notice that she disputed the debt and notice that she refused to pay the debt.

Collectors Must Stop All Collection Efforts If Consumer Disputes Debt.

If the consumer disputes the debt in writing sent to the collector within thirty days after receiving the initial written communication from the collection agency, the collector must stop all collection activities until it provides “verification” of the debt to the consumer. Here, Gurstel received the dispute letters and finally stopped its collection efforts for over four months before it began calling her again demanding payment and threatening legal action. Gurstel had never provided verification. These calls violated the FDCPA.

Collectors Must Stop All Communications With the Consumer if the Consumer Sends Notice That She Refuses to Pay the Debt.

The FDCPA provides protection from continued collection harassment if the consumer sends written notice to the collection agency or collection law firm that she refuses to pay the debt. Upon receipt of such a notice, the agency or law firm must stop all communications with the consumer, including letters and phone calls. It does not, however, stop collection efforts such as filing a lawsuit or reporting the account to the credit bureaus.

In the case just filed, the consumer notified Gurstel that the alleged debt was the result of fraud and that she therefore refused to pay the debt. The subsequent phone calls violated the FDCPA.

Arizona Consumer Sues Portfolio Recovery Associates for Collection Harassment

My office recently filed suit on behalf of an Arizona consumer under the federal Fair Debt Collection Practices Act (FDCPA) against Portfolio Recovery Associates, LLC out of Norfolk, Virginia. Portfolio Recovery is one of many companies known as “Debt Buyers” or “Junk Debt Buyers.” These debt buying companies purchase blocks of debts which are charged off by the original creditors and sold for pennies on the dollar. The debt buyers then try to collect the debts sometimes using collection tactics which violate federal law.

For instance, the Arizona Consumer in this suit alleges that Portfolio Recovery repeatedly called her at work after being told that she cannot accept personal calls at work. They even left a message on one of her co-worker’s voice mail to “pass along” to the debtor.

The FDCPA prohibits debt collectors, including these “Debt Buyers” or “Junk Debt Buyers,” from calling an Arizona consumer at her place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such calls.

The FDCPA also forbids debt collectors from contacting third parties, including co-workers, friends, family, and neighbors, except to obtain location information. Calling and leaving a message with a co-worker or other third party is not done with the intent to obtain location information — its to done to harass the Arizona debtor and perhaps embarrassment them into paying a debt they either do not owe or one that they cannot afford to pay at this time.

I have filed many lawsuits over the past several years against collection agencies who participate in these types of illegal collection activities.

If you are an Arizona consumer who has been subjected to these types of collection harassment, please call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a free phone consultation.

Do You Need an Arizona Consumer Lawyer?

If you are an Arizona consumer who has been abused or harassed by a collection agency, or been sued on a delinquent credit card account or auto deficiency balance, then a consultation with an Arizona lawyer with experience in consumer protection law is important.

I am surprised by the number of Arizona consumers who tell me that the other lawyers they have consulted with advise them that even though the collection agency, car dealer, credit bureau, etc. has abused them, committed fraud, or otherwise violated their rights under the law, they are told by these same lawyers that nothing can really be done–that it costs too much to pursue the claim. Even when the consumer has been sued on an old credit card debt or an auto deficiency balance, these lawyers tell the consumers to try to settle the claim by offering to pay the debt buyer money even though the consumer has a complete statute of limitation defense to the lawsuit.

Should you consult an Arizona consumer lawyer? The answer is yes. Consult with a lawyer not only experienced in consumer law, but one who has practiced in the Arizona courts and is familiar with the local judges and local attorneys on the other side. Know what your rights are.

Experience counts! ARIZONA experience counts even more!!!

If you need a consultation regarding a consumer issue, please call Mesa, Arizona consumer attorney Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822.

Maricopa County Superior Court Rules that Arizona Statute of Limitations on Credit Card is Three Years

Arizona Legislature Changes Statute of Limitations on Credit Card Accounts.

The Arizona Legislature recently changed the law to make most credit card collection cases subject to a six year statute of limitations. A.R.S. Sec. 12-548 now states that "if the indebtedness is evidenced by or founded on . . . a credit card. . ." it is subject to the six year statute of limitations.

The following case will no longer provide the persuasive precedent that we have previously enjoyed.

Maricopa County Court Commissioner Eartha K. Washington recently dismissed a collection lawsuit stating that the First USA Bank credit card debt was an open account and therefor subject to the three year statute of limitations under A.R.S. § 12-543. 

DSS Financial Group, LLC filed suit in the Arizona South Mountain Justice Court against an Arizona consumer on a credit card debt it claims it purchased from Unifund CCR Partners, which claims it purchased the debt from Chase bank, the predecessor to First USA Bank.  The case went to trial and the Justice entered judgment in favor of DSS Financial.  The court denied DSS Financial’s request for attorney’s fees and costs.  The consumer appealed Judge Cody Williams judgment to the Maricopa County Superior Court arguing that the statute of limitations had run since the debt had been in default more that three years prior to the suit being filed, and that DSS Financial had not properly shown ownership of the First USA Bank debt.

Commissioner Washington did not address the question of whether DSS Financial or Unifund had purchased the debt from First USA Bank or Chase, but rather ruled that the case should be dismissed based upon the three year statute of limitations.  Commissioner Washington also awarded the Arizona consumer all her attorney’s fees and costs of the litigation. 

Debt buyers are filing hundreds of lawsuits each month against Arizona consumers on accounts they claim to have purchased.  Many of these credit card accounts are not collectable because 1) they are too old, meaning the statute of limitations has run; 2) they have no proof of ownership of the accounts; 3) they cannot prove the balance owed or how the claimed balance was calculated; and 4) the Arizona consumer either does not owe the debt because of identity theft or misuse of a stolen credit card.

These debt buyers file suits against Arizona debtors believing that most consumers (over 90%) will not know their rights, and the debt buyer will be able to obtain judgment by default without having to prove their case. Common debt buyers who file suits in Arizona include:

• American Commercial Credit

• Arrow Financial 

• Asset Acceptance, LLC

• CACV of Colorado, LLC

• Cavalry Portfolio Services, LLC

• Centurion Capital Corporation

• Debt Buyers Inc.

• DSS Financial

• Easy Loan Corp.

• Faslo Solutions, LLC

• First Resolution Investment Corporation

• Generation Funding

• Hilco Receivables

• Hudson & Keyse

• LVNV Funding LLC

• Midland Credit Management

• Midland Funding, LLC

• MRC Receivables Corp.

• NCO Financial

• Palisades Collection LLC

• Persolve, LLC

• Portfolio Recovery

• Resurgent Capital Services

• RJF Financial

• Unifund CCR Partners 

• Western States Financial

• World Wide Asset 

There are also many new debt buyers showing up all the time.

If you are an Arizona consumer who has recently been served with a lawsuit by a debt buyer, please call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a free phone consultation to see if you may have a defense to the lawsuit.

EMC Mortgage Files Suits Against Homeowners to Collect Deficiencies on Purchase Money Mortgages

According to court records, EMC Mortgage Corporation and its servicing agent Faslo Solutions, LLC has filed dozens of lawsuits against Arizona consumers seeking to collect balances on mortgages after the home has been foreclosed.  

Arizona's anti-deficiency laws protects consumers from such collection actions.  If the  mortgage was used to purchase a home in Arizona, then the mortgage company cannot collect any deficiency balance against the consumer. 

These lawsuits are illegal and violate both state and federal law. 

Arizona attorney Floyd W. Bybee of BYBEE LAW CENTER, PLC has represented hundreds of Arizona consumers in actions under state and federal law. 

If you are an Arizona consumer and have been sued by EMC Mortgage Corporation or Faslo Solutions, LLC, or any other mortgage company, please call Mesa, Arizona consumer attorney Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a free consultation.

Arizona Debtors Sue Collection Agencies For Collection Harassment

Are you an Arizona consumer being harassed by a debt collector? Are collection agencies calling you at work or calling your family, friends or neighbors?  

Federal law prohibits collection agencies from harassing or abusing Arizona debtors. Even if a debt is owed and not disputed, the federal Fair Debt Collection Practices Act or FDCPA prohibits collection agencies from engaging in any harassing or abusive conduct.  It also prohibits a debt collector from making false representations to Arizona consumers to coerce payment of a debt.   

Arizona consumers are entitled to file a lawsuit against any collection agency who violates the FDCPA and to recover damages, including statutory damages of up to $1,000.00. Arizona attorney Floyd W. Bybee, of the BYBEE LAW CENTER, PLC, has represented hundreds of Arizona consumers in actions against debt collectors for violations of the FDCPA.

If you are an Arizona consumer who is the victim of collection harassment or abuse, please call Mesa, Arizona lawyer Floyd Bybee at (480) 756-8822 for a free phone consultation.

Bank of America Sues Arizona Consumer for Deficiency on Home Purchase Mortgage

Bank of America sued an Arizona consumer seeking a judgment for over $100,000 for a deficiency on a mortgage used to purchase the family's home which was lost to foreclosure.

According to court records, Bank of American and other mortgage companies and their servicers have filed dozens of lawsuits against Arizona consumers seeking to illegally collect deficiencies on mortgages where the homes have been foreclosed.

Arizona's anti-deficiency law protects consumers from such collection actions.  If the mortgage was used to purchase the home here in Arizona, then the mortgage company cannot collect any deficiency balance against the consumer. 

These lawsuits are illegal and violate both state and federal law. 

Arizona attorney Floyd W. Bybee of BYBEE LAW CENTER, PLC has represented hundreds of Arizona consumers in actions under state and federal law. 

If you are an Arizona consumer and have been sued byBank of America or any other mortgage company or its servicer, please call Mesa, Arizona consumer attorney Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a free consultation.

JUDGE ORDERS DEBT COLLECTOR TO PAY FAMILY 854,389

Burney Simpson of insideARM.com is reporting on a Jackson County Missouri case wherein the Judge ordered a debt collector to pay a family $854,389.00 and their attorney fees for violations of the Fair Debt Collection Practices Act. 

Mr. Simpson claims that the Judgement was a result of the Debt Collectors name calling, threats, harassing phone calls at home and work, and ignoring orders by the consumer's attorneys to stop the calls.  The collector was MRCA who had bought the debt from Citi.

Dolores Maddux was called "lazy," "fat," "inbred," "pathetic," "stupid," "black," and "deadbeat."

The Collectors also called Gilbert Maddux at home and work, despite being told to discontinue the calls, and even threatened to "bring four guys down from Topeka to take care of the situation."

One of the collectors falsely stated he was a sheriff to the consumers step-daughter; called a roommate of the step-daughter a racial slur; told the step-daughter to "get your lazy ass out of bed and take a message for Dolores to call us"; he also threatened co-workers of the stepdaughter.

MCRA also obtained the couples credit report without their permission.

If a Debt Collector has been calling you or your family names, lying to you, calling your friends, family or work, or taking a look at your actual credit report without your permission, you may be entitled to statutory damages, actual damages and your attorney fees.  Contact my office and we can talk about your situation for free.

CREDIT CARD DEBT AND THE NEWLY BANKRUPT - WHOSE FAULT IS IT?

Katherine Porter of the Iowa School of Law,  has written a law review article about the relationship between the credit industry and those who have filed for bankruptcy and have been discharged.  She explains what those familiar with the post bankruptcy world have known for a long while. If you recieve a discharge of your debt, the credit industry sees you as a potential customer...again.  It will delude you with offers to set up a new credit line.

She argues that the credit industry's claim that consumer debt is wholly the fault of the borrowing consumer who is opportunistic and seeks out the credit is incorrect.  This is clear from the amount of  marketing to the post bankruptcy community. An outtake from the article makes her point:

"Consumer credit and consumer bankruptcy filings have grown rapidly over the last two decades, and several researchers have attempted to
understand the relationship between these two intertwined features of the modern American economy. Teasing out causation is almost impossible,
as consumer advocates lay blame on the industry and the industry responds by citing the same data to show consumer misbehavior. Using a
novel vantage point, this analysis examines what the credit industry's behavior toward recently bankrupt families reveals about its internal
profit models and the likely causes of consumer bankruptcy. The empirical evidence on post bankruptcy credit solicitation belies the
industry's characterizations of bankrupt families as opportunistic or strategic actors. Original data from longitudinal interviews with
consumer debtors show that many lenders target recent bankrupts, sending these families repeated offers for unsecured and secured loans. The
modern credit industry sees bankrupt families as lucrative targets for high-yield lending, a reality that has important implications for
developing optimal consumer credit policy and bankruptcy law."

The article can be read in it's entirety HERE. (It is 64 pages, have fun) 

I do not disagree that the credit industry targets the newly bankrupt.  I also agree that  debtors are not as opportunistic as the credit industry would have everyone believe. 

However, I oppose more government regulation to rein in new solicitation.  Many believe that the consumer is incapable of protecting himself or herself.  I disagree.  The real solution lies with the consumer.  The consumer has some power and that power lies in the ability to say no.  

My simple advice to clients post bankruptcy,  and the real solution to the problem of new debt after bankruptcy:

1.  Throw all solicitations in the trash, i.e. destroy them.

2.  Don't ever borrow money from a credit card provider again, unless you have a real emergency.

3.  Live below your means. 

MORTGAGE SERVICING FEES AND FORECLOSURE

When a consumer files a chapter 13 bankruptcy to save a home from foreclosure, he or she must pay the amount of the past due payments and fees that existed prior to the filing over the course of the Chapter 13 plan.  After the Plan is filed, in Arizona, the consumer must continue to make timely monthly house payments. 

During the chapter 13 plan, mortgage companies that are servicing the loan will charge the consumer various fees that are theoretically related to "servicing" the loan.  These fees must be disclosed to the Court and permission granted for their payment.  Some of the disclosed fees are reasonable and some are unreasonable and would never be allowed if challenged. 

Some however, are hidden and only show up after the chapter 13 case is over.  They usually appear when the consumer attempts to re-finance the home.

Fees that are disclosed to the Court and approved because they were never challenged by the consumer are legal.  Hidden fees that show up after the fact are not, and according to this New York Times article are often the cause of foreclosure problems both inside and outside of the Bankruptcy context.

If you are behind on your mortgage and are using a chapter 13 bankruptcy to dig out, make sure that the fees that the mortgage servicer is charging are properly disclosed to the court and challenged if inappropriate.  If after the bankruptcy, a number of fees pop up that were no where to be found during the case, talk to a lawyer familiar with the subject before closing on a new loan or paying the fee.   You can contact me here and we can speak for free about the problem.

DOES THE FAIR DEBT COLLECTION PRACTICES ACT ACTUALLY BENEFIT THE COLLECTOR?

Having represented Bankruptcy clients for a number of years, I am certain that most people want to pay the debt they owe. 

I strongly urge my clients to pay their debt if there is some reasonable way to do so.  I also urge them not to use credit cards.

However, the Fair Debt Collection Practices Act has little to do with whether a debt is owed.  It has everything to do with creating a civil environment in which debts are collected.  

The FDCPA levels the playing field between the collector and debtor but it also levels the playing field amongst the collectors as follows:

1.  It provides the Collector with a specific written list of dos and don'ts.  i.e. easy to follow rules.

2.  It allows for parental and spousal communication.

3.  It provides for long collection hours.  8 a.m. to 9 p.m.

4.  It contains a "bona fide" error defense.

5.  It provides an FTC opinion letter defense.

6.  Statutory damages are very low and class action damages are limited.

7.  It cleans the marketplace of anti competitive overreaching.  This allows the honest collector an opportunity to compete with the "more aggressive" collectors.

Despite the clear rules and defenses, some debt collectors still believe that using a "stick" is still the best way to collect. 

Contact me if you are being hit by the "stick" as a result of inappropriate debt collector contact and we can discuss your legal options. 

RECORDING A DEBT COLLECTION CALL

If the debt collector has ignored your written request to discontinue contact, has been calling you names, embarrassing you, threatening you, contacting your neighbors and family and disclosing your debt or violating the fair debt collection practices act in some other way, you should consider recording the contact. 

Recording phone calls without disclosure is not allowed in every state, however.  If it is allowed in your state, you should make sure that the collector is in your State as well.  You should speak to your attorney no matter what state you live, in before recording.

FIVE STEPS TO RECORD 

1.   Always seek the advice of a competent attorney before taping a debt collection call.  It is a federal crime to record if you are not a party to the call, and recording a call as a party may be a crime in your state.  Read "Can We Tape? - A practical Guide to Taping Phone Calls and In - Person Conversations in the 50 States and D.C."   a guide to current state law on recording.  Again, always verify the information with a competent attorney before recording.

2.  Buy a digital or old fashioned tape recorder. The  digital is more expensive and are easily erased.  The old fashioned type are foolproof, cheaper and easy to obtain.

3.  Buy a stereo patch cable - this is the stereo patch cable needed in order to digitize your tape recording onto your computer.

4.  Get some digitizing software - Once you have the tapes recorded the best thing to do is to "digitize" them so that they can be emailed to others or posted on the web.  www. polderbits.com sells a windows based tape digitization software. This software will allow you to transfer the tape over a cable and them turn the recording into an .mp3 file.  It costs about $20.00.

5.  Digitize the tape - remove the small plastic recording tabs on the tape you want to digitize before you put in in the recorder.  This will prevent accidental erasure.  Connect the stereo patch cable to the earphone or out jack on the recorder.  Connect the other end of the patch cable to the sound card mic or input jack on the computer.  Turn the recorder volume to low.  Start polderbits recording then press the play button on the recorder.  Some adjustment will be necessary dependant on the recorder. 

Contact me if you need more instruction on how to record a call from an abusive collector. 

CLEANING UP YOUR CREDIT REPORT - SOME BASICS

There are signs all over the streets in Arizona offering credit repair services.  If you type in credit repair in Google, you will find hundreds as well.  Most claim that they can clean your report for a fee.  Many of those most, claim to be able to remove accurate information related to your bankruptcy, foreclosure or tax lien.  Those that do are not being completely honest.

There are a few rules when it comes to repairing your credit report.

1.  Review it often.  You can visit my website page here that will direct you to the website where you can review all three of the major credit reports you have for free if you haven't pulled the report for 1 year.  I pay Equifax a small fee for the ability to see my report anytime.  This may be overkill for some, but it will help you keep your credit in the front of your mind.

2.  Maintain good records.

3.  Do not pay anyone to help you "clean" your report.  The process to remove inaccurate information is actually fairly simple.  To pay someone to do it makes no sense.  There are a number of talented credit attorneys who will help you for free.  Go here to see some basic steps to do so.  In fact there are ways to tell that the credit cleaning service you are using is not on the up and up.  The California Credit Law Blog, a service of the law firm of Kemnitzer Anderson et al  has a short blog about what to look for to avoid a rip off here

4.  Always contact the CRA first .  When you are disputing an incorrect item, always write a certified letter to the credit reporting agencies(s) and copy the creditor.  If you write the creditor, you will have lost some rights under the fair credit reporting act.

5.  Contact a Lawyer .  If you have contacted the credit reporting agencies and incorrect information still exists on the report, you may have a valid legal claim against the creditor and possibly the credit reporting agency as well.  These cases are usually taken on a contingency basis by the qualified counsel.

If you are having problems with your report as a result of a mixed up file, identify theft, or post bankruptcy issues, steer clear of the "non-attorney" "for a fee" help that is all over the place.  If you live in Arizona, contact me and I will speak to you for free.

Collection Agency Disclosures - What has to be disclosed?

In the most normal debt collection scenario the collection agent or the buyer of the written off debt sends out a little intro letter basically asking for money.

The FDCPA in an effort to create the "even" playing field amongst collectors places some restrictions on letter writing.  The intro letter must include the following:

the amount of the debt

the name of the original creditor

the period of time in which the debtor may dispute the debt's validity (thirty days by the way)

the obligation of the collection agency to send the debtor verification of the debt if it's validity is disputed.

a "mini-miranda" warning like...." this letter is an effort to collect a debt and any information it gathers from the debtor or other sources wil be used for that purpose."   If this warning is not included in the letter,  it must be provided within 5 days.

Most attorneys will recommend that the debtor request verification of the debt.  A collection agency may not resume the collection effort until the information is confirmed by the original creditor.   

Talk to an attorney if you have recieved a collection letter from a collector or debt buyer.