Northern District of Texas Judge Rules against Unfair Collection Practices of Ally Financial

U.S. Bankruptcy Judge Stacey G.C. Jernigan issued a recent opinion finding that automobile lender Ally Financial Inc. violated federal bankruptcy law collecting on discharged debts. Ally was sending letters to their debtors trying to get them to pay off debt that they no longer owe. Ally routinely sent letters to confuse debtors into making payments and in so doing collected extra monies from the Debtors.

After finding that these letters were improper the court ruled that Ally was prohibited from sending out this letters to anyone in the Northern District of Texas’ jurisdiction and that Ally was required to pay back $11,000 from their proceeds. Aside from paying damages, Ally was ordered by the judge to pay legal fees to the winning lawyer, John J. Grieger Jr. of Legal Aid of NorthWest Texas in Dallas.

The Judge’s ruling is good news for Debtors in the North Texas area, especially those who have come under prey by unscrupulous lenders. For more information about bankruptcy, or for a free consultation, contact the experienced attorney’s at Fears and Nachawati 1.866.705.7584. 

 

Tell Your Lawyer About All Lawsuits

All bankruptcy debtors will tell their bankruptcy attorneys about cases in which they are defendants. Debtors are always anxious to stop a lawsuit and rid themselves of any dischargeable obligations.

The problem with lawsuits usually arises when the debtor is the plaintiff, or has a claim that has not yet been filed. For instance, suffering a personal injury caused by someone else and then filing bankruptcy to get rid of the medical bills.

Both a plaintiff’s lawsuit and a potential lawsuit are assets of the bankruptcy estate.

What happens to the plaintiff’s claim during bankruptcy can depend on a number of circumstances.

 

In some cases the bankruptcy attorney can exempt a portion or even all of the money received from winning or settling the lawsuit. In other cases the bankruptcy trustee may consider the lawsuit or potential lawsuit of little potential value to the bankruptcy estate (and your creditors), and may abandon the estate’s interest in the suit or claim.

The Bankruptcy Code requires the debtor to disclose all pending lawsuits and claims, whether as a plaintiff or a defendant. Failing to disclose a claim can cause serious headaches for both the bankruptcy attorney and the plaintiff attorney. Whether the failure to list the claim was intentional or an unintentional error, omitting a pending or potential lawsuit is the same as representing to the bankruptcy court that the debtor does not own the asset or have the right to sue. One appellate court said, that “a debtor in bankruptcy who denies owning an asset, including a chose in action or other legal claim, cannot realize on that concealed asset after the bankruptcy ends.” The legal term for this situation is “judicial estoppel,” and it can terminate your right to sue.

If you have a pending or potential lawsuit, discuss your situation with your bankruptcy attorney. Your attorney can advise you on your legal options for discharging your debts and keeping your lawsuit proceeds. Pending lawsuits is actually common, and an experienced bankruptcy attorney can guide you through the legal maze without terminating your rights.

Top Five Reasons People File For Bankruptcy

When you are experiencing a financial crisis you may feel like you are the only one in that situation. The reality is that many people are feeling the current financial crunch for one reason or another. So whether you live in Dallas or any other part of the country, you are not alone!

The following top five reasons seem to be the most common reasons why many people are filing for bankruptcy:

1. Wiping the slate clean. The goal of a discharge is to reduce debt to give you a fresh start.

2. Stop foreclosure or sale of your home.  If your home is in foreclosure a Chapter 13 bankruptcy will stop the foreclosure any time prior to the sale.

3. Prevent repossession of your car or other property. If the bankruptcy is filed quickly enough it can effectively force the creditor to return your car or other personal property.

4. Stop aggressive collection efforts by creditors. Often, creditors will call the home of a debtor at all hours and behave in an abusive manner. Bankruptcy will help stop the harassing phone calls and other aggressive behavior by creditors.

5. Restore or prevent your utilities from being shut off. Filing bankruptcy can prevent the utility company from pulling the plug on you.

 

If you are experiencing a financial crisis, contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or info@fnlawfirm.com for a free bankruptcy consultation.

 

What I Should Know About Bankruptcy

What bankruptcy can do for you

When filing for a Chapter 7 or Chapter 13 bankruptcy you get immediate protection from creditors against collection efforts against liens on your assets or paycheck. A creditor is considered anyone you owe money to whether it be a credit card debt or a judgment from a civil law suit.

If you file for a Chapter 7 your debts are discharged and you are no longer obligated to pay the debts. In a Chapter 13 case you will have the opportunity to set up a payment plan that can last 3-5 years. Debtors who want to save their home or have IRS debts typically file for a Chapter 13 bankruptcy. This type of bankruptcy will freeze a foreclosure and relieve an individual of liens on their paycheck or bank account.

What bankruptcy can do for you

Unfortunately, even bankruptcy cannot absolve you of the following debts:

  • Child support
  • Spousal support/alimony
  • Fines resulting from criminal cases

Student loans and IRS debts are usually not discharged but can be under specific and limited circumstances.

For a free bankruptcy consultation and to receive information on what bankruptcy can do for you, contact bankruptcy law firm, Fears | Nachawati, by calling our toll free hotline at 1.866.705.7584 or by e-mailing us at info@fnlawfirm.com.

Can I File Bankruptcy To Discharge A Lawsuit?

One of the reasons many people rush to filing bankruptcy is to discharge a lawsuit. While this may be a good way to avoid a garnishment from a judgment, it can be a complicated process that should be handled by an experienced bankruptcy attorney. You may have questions such as:

 

Do I have to file bankruptcy before my creditor gets a judgment?  

In general a debt represented by a judgment is just as dischargeable as the same debt prior to entry of judgment.  Note, however that there are some exceptions dependent on the type of bankruptcy that you file.

 

Will bankruptcy stop garnishment on a judgment against me?  

Bankruptcy will terminate garnishments as to wages earned after the filing of the bankruptcy.  Wages earned before the filing may be recoverable from the sheriff or the creditor if those wages would otherwise have been exempt. 

 

The only possible exception concerns child support collections. In such cases it depends on what chapter bankruptcy case is selected and whether the support first came due before the commencement of the case, etc.

 

A consultation with a Dallas & Ft. Worth area attorney can help answer these and many other questions in more detail. For a free bankruptcy consultation to learn more about discharging debts through bankruptcy contact Fears | Nachawati Law Firm, (866) 705-7584.