HOUSTON CONSUMER LAW ATTORNEY

Administrator Consumer Law

Just wanted to post other clips from the Dateline Episode “Inside the Financial Fiasco” which aired Part I “Debt Trap” on Friday, March 27, 2009. I have posted below additional video links to this episode regarding the abusive and illegal practices of some debt collectors.

Administrator Consumer Law, Debt Collection Practices Consumer Law, Debt Collection Practices

Dateline NBC aired a very interesting episode on it’s Friday edition of the show entitled “Inside the Financial Fiasco”. Friday’s episode pertained to the tactics and practices of the debt collection industry. Dateline NBC conducted some undercover investigations of debt collectors. I found the tactics of these debt collectors to be beyond abusive and harassing. In my opinion, the tactics used by the debt collectors portrayed in this episode were fraudulent and criminal. This episode should be a wake up call to consumer groups, regulators, and legislators that more regulations and stiffer penalties need to be adopted.

I have posted a clip from the Dateline episode below.

Administrator Consumer Law, Debt Collection Practices Consumer Law, Debt Collection Practices

Texas has some of the most favorable laws regarding a debtor’s exemption of property of any state. One of the most important exemptions used by debtors in Texas to protect property against judgment creditors is the Texas Homestead Exemption. [See Tex. Const. Art. XVI, Sec. 50]. Section 41.002 of the Texas Property Code provides the definition of a “homestead”. A homestead is protected from forced sale by a judgment creditor for the nonpayment of debts, with the exception of purchase money lien, taxes on the property, work and material used in the construction of improvements to the property, an owelty of partition ordered by a court, refinance loan against the homestead, home equity loan, or a reverse mortgage against the homestead. [See Tex. Prop. Code, Sec. 41.001].

Although a judgment creditor may attach a valid lien against the homestead, the judgment debtor/homestead owner can file an affidavit in the real property records in the county where the homestead is located and have the judgment lien released as to the homestead. [See Tex. Prop. Code, Sec. 52.0012]. In addition, a consumer can file and record property as a voluntary designation of homestead with county clerk in the county in which all or part of property lies. [See Tex. Prop. Code, Sec. 41.005].

Homestead rights can not be transferred by will or intestacy. In addition, the homestead exemption expires upon the death of the debtor(s) asserting the homestead rights. Thus, a judgment creditor can attempt to collect against the property upon the death of debtor(s) who had the homestead exemption rights.

Administrator Consumer Law, Judgments Judgments

Recently, I have received several questions regarding judgments from consumer and/or debtors. Of course, with the recent downturn in the economy more and more consumer debtors are being sued by creditors and/or debt collectors. In response to these questions, I just wanted to give a brief introduction to help answer some of the more common questions that I receive.

Question 1: What is a judgment?

Answer: A judgment is basically a ruling from a court finding that a debtor is obligated or liable to pay a creditor for an amount determined by the court. A judgment is a civil obligation to pay. A debtor can not be placed in jail/prison for failing to pay a debt or judgment. Even when a creditor obtains a judgment against a debtor, the creditor has to properly execute and enforce the judgment against the debtor.

Question 2: What methods can a creditor use to enforce a judgment?

Answer: There are several different methods that a creditor can use to enforce a judgment against a debtor. The most common methods include, garnishment, attachment, judgment lien against real property, sequestration, writ of execution, and repossession of secured property.

Question 3: What types of property can a judgment creditor execute against a debtor?

Answer: In Texas, property for collection purposes is placed into two (2) primary categories, exempt or nonexempt property. Exempt property is debtor property which is protected from actions by a creditor. In other words, exempt property cannot be seized by a creditor regardless of whether they have obtained a judgment against the debtor. Texas is considered to be a very debtor friendly state thus, Texas allows for a greater amount of property to be exempted under Texas law compared to other states. See Sections 42.001 & 42.002 of the Texas Property Code for a list of exempt property. The most common and greatest exemption here in Texas is the homestead exemption.

Non-exempt property is debtor property which is not protected, and thus can be seized by judgment creditor. Generally, the following types of property are non-exempt:
cash;
checking/savings accounts;
CD’s, Bonds, Notes, Stocks, and other types of investments;
Rental Property or Vacation Property not designated as homestead property;
Pleasure Boats;
Collector Items; and
Airplanes.

Question 4: What is the statute of limitations for a judgment?

Answer: Generally in Texas, a properly executed and recorded judgment lien will last for ten (10) years from the date of recording and indexing. However, a creditor can continually renew a judgment lien for another ten (10) year period, if the creditor does so before the current 10-year period expires. Thus, a creditor could continually renew a judgment lien until the judgment is satisfied.

In addition, generally a judgment remains on a consumer’s credit report for seven (7) years from the date of entry, or until the governing statute of limitations period under state law has expired, whichever is longer. Thus, if a consumer has a judgment which is satisfied/paid, then that judgment would be removed from a consumer’s credit report after 7 years from the date of entry of the judgment. However, if a consumer has failed to satisfy the judgment, the judgment could be removed after 7 years from the date of entry, or it could last continually given the the fact that under Texas law a judgment can be renewed continually every 10 years if properly executed by the creditor.

Question 5: Am I liable for the debts/judgments of my spouse?

Answer: Generally, an individual is not liable for the debts spouse. A person is personally liable for the acts of the person’s spouse only if: (1) the spouse acts as an agent for the person; or (2) the spouse incurs a debt for necessaries. Tex. Fam. Code §3.201(a). Furthermore, community property is generally not subject to a liability that arises from an act of a spouse. Tex. Fam. Code §3.201(b).

Administrator Consumer Law, Consumer Resources, Judgments Consumer Law, Consumer Resources, Judgments

The Federal Trade Commission (FTC) this week recommended that debt collection laws, such as the Fair Debt Collection Practices Act (FDCPA), be overhauled and modernized to provide for more efficient disclosures, access to better information, and greater consumer protection. I am sure that creditors, debt collectors, and their attorneys will be in opposition to these proposed changes by the FTC.

A link to the article regarding the FTC proposals is provided below.

http://www.ftc.gov/opa/2009/02/fdcpa.shtm

Administrator Consumer Law, Debt Collection Practices, Recent Developments in Consumer Laws Debt Collection Practices

As the economy becomes worse and consumers begin to become unemployed or get behind on their bills, you can be sure the debt collectors will be thriving in this environment. Debt collections are sure to raise in this bad economic cycle that we are in right now. Of course, what that means for American consumers is more harassing phone calls, letters, and lawsuits by debt collection agencies. Most consumer debt consists primarily of credit card debt. The idea of putting that expensive pair of shoes or purse on the credit card did not seem as burdensome when you had the ability to pay the bill, however, now that the economy is in recession, thousands of consumers now face constant phone calls and letters from debt collectors demanding payment. In some instances, debt collectors and credit card companies will sue a consumer in hopes of obtaining a judgment and collection payment. It is important to remember that even if you are sued by a creditor/debt collector, that you still have rights.

First of all, if you are sued make sure that you file an answer by the date specified by that particular court. Depending on the amount owed, creditors may sue you in district court, county court, or a justice of the peace court. It is important to file an answer and not let a creditor or debt collector obtain a default judgment against you in lawsuit. In fact, many creditors and debt collectors realize that a high percentage of debtors never file an answer in lawsuit. Many creditors or debt collectors business models and profit margins are based upon their expectations of debtors failing to file an answer and contesting the lawsuit. Thus, many debt collectors are unprepared to properly prove-up their cases when a consumer unexpectedly files an answer and obtains adequate legal representation to defend themselves in court. The creditor or debt collector just can not simply come into court and assert that a consumer owes them money, the creditor or debt collector must prove it by a preponderance of the evidence under the law. There are usually several elements that must be proven before a creditor or debt collector can prevail in a lawsuit. Thus, a consumer with proper legal representation will know how to put on an adequate defense in these cases. It is important that a consumer sued by a creditor or debt collector seek legal representation immediately. An attorney defending a consumer in debt collection cases should be familiar with the substantive law and the rules of evidence. A consumer law attorney would be able to assist a consumer in defending him/herself against the creditor or debt collector. For example, a debt collector must show that it has standing to sue (basically debt collector must be able to show it owns the debt), and must be able to prove how much debt is actually owed by a particular consumer. Sometimes, if a debt has been sold to many debt collectors over a period of time, a debt collector that sues a consumer might have trouble proving its case in court. In addition, there may be affirmative defenses that an attorney would assert on behalf of a consumer against a creditor or debt collector, such as statute of limitations. Under Texas law, the statute of limitations for credit card debt is generally four (4) years from the time that an account went past due and the last payment was made to the account, however there are certain exceptions to this general rule. In addition, a debtor might have potential counterclaims against a debt collector for violations of the Federal Debt Collection Practices Act (FDCPA), Texas Collection Practice Act (TCPA), or other causes of action under federal or state law.

A proper defense against a credit or debt collector may result in your case being dismissed. Of course, there may be cases in which a dismissal may not result, but a debtor may still be able to negotiate a more favorable settlement or outcome of the case. Thus, it is generally always in a consumers best interest to seek adequate legal representation and file an answer, if you have been sued by a creditor or debt collector. DO NOT LET A DEFAULT JUDGMENT BE ENTERED AGAINST YOU!!!!

Administrator Consumer Law, Credit Card Defense, Debt Collection Practices credit card defense, Debt Collection Practices

Here is link to the article contained in the Houston Chronicle regarding Stanford Financial Group.

http://www.chron.com/disp/story.mpl/business/stanford/6272687.html

Basically, the Stanford Financial Group is accused by the Securities and Exchange Commission of defrauded consumers of billions of dollars in a scheme involving the misrepresentation of the investment performance of the investment company’s Certificates of Deposit (CD) rates. This story continues a trend of recent headlines involving financial services companies being accused of securities violations, fraud, and other unlawful activity. My question in all of this is simply, “Where are the regulators”. I mean why does it seem that the regulators only step in after the damage is already done. How can these massive amounts of fraud go on undetected by regulators? It’s the job of the SEC, Federal Trade Commission, Office of the Comptroller of the Currency, FDIC, Federal Reserve, and other federal and state regulators to insure that these types of massive fraud and unlawful activity never happen. However, to often it seems that these agencies are not adequately doing their jobs. In my opinion, regulators often place the profits of banks and financial services companies ahead of the need of to protect consumers from fraudulent or unlawful business practices. For far to long, the banking and financial services industry have stated that regulation was not necessary because the industry could regulate itself, or that increased regulation would increase the costs of doing business and that these costs would be passed down to consumers. After the collapse of our financial markets, I find that the banking and financial services reasoning against increased regulation is lacking. First of all, I find it hard for the industry to say that it can self regulate itself after the massive amounts of fraud and unlawful activity that we have seen recently. Furthermore, I find it hard for the industry to state that costs would be passed down to consumers as a result of more regulation, after the billions of dollars lost by consumers as a result of fraud and lax oversight of the industry. Not to mention, the amount of money that taxpayers are having to pay to bail out the industry due to its greed and the lack of oversight by regulators. At this time, I believe we need stronger oversight and regulation of the industry. The industry has not shown that it can adequately regulate itself and regulators have shown the inability or capability to oversee this industry under the current regulatory scheme. It’s time that regulators place consumer protection ahead of business profits.

Administrator Consumer Fraud, Consumer Law Consumer fraud

J. Cole Brooks
Attorney & Counselor At Law
Kubosh & Associates
1619 Lubbock
Houston, TX 77007
Cell: 281-795-4720
Office: 713-222-0880
fax: 713-222-7020
email: jcole@colebrookslaw.com
website: www.colebrookslaw.com

Administrator Consumer Law

Under Texas law, insurance companies owe a fiduciary obligation to their insured. This means that insurance companies must exercise the duty of good faith and fair dealing in their relationship with the insured. Failure to do so will give rise to a cause of action commonly known as “Insurance Bad Faith”. Insurance companies have a duty to pay their policyholders’ claims fully and in a timely manner. Even if the insurance provider is not engaging in fraudulent activity, certain actions by the insurer may still be evidence of bad faith on the part of the insurer.

Among the numerous examples of how an insurer can commit bad faith and deny your claim are:

* Failure to investigate a claim in a timely manner
* Unnecessary delay in payment of benefits
* Offering inadequate, unfair value for losses suffered
* Unfair interpretation of the insured’s policy
* Refusal to reach a settlement in the case
* Refusal to reimburse you for the entirety of your loss.

When an Insurance Company violates its duty of good faith and fair dealing, or otherwise violates the Texas Insurance Code it may give rise to a lawsuit on behalf of the insured. In the lawsuit, the insured may be entitled to statutory penalties, treble damages and attorney fees.

Administrator Consumer Law, Insurance Bad Faith Insurance Bad Faith