Debt Collection Archives - Page 2 of 3 - Wetherington Hamilton, P.A.

When is Someone Entitled to Florida’s Head of Household Exemption?

May 15, 2017/in Articles, Debt Collection/by Ted Hamilton

Once a creditor obtains judgment against a debtor and collection efforts begin, there are several options for collection. One of the most effective options for collection of a judgment can be garnishment of wages or bank accounts. Garnishment statutes require strict compliance; all “I”s must be dotted and all “T”s must be crossed.

While there are several exemptions, head of household is a common exemption claimed by debtors. So how does one qualify as head of household and why is this important?

Florida statute section 222.11(c ) defines “head of family” to include “…any natural person who is providing more than one-half of the support for a child or other dependent.” When a judgment debtor claims head of household or head of family, if that person does not qualify for the exemption, then his or her disposable earnings may be subject to garnishment. However, if it is determined that the person claiming the exemption is actually head of household, then his or her wages would not be subject to garnishment.

Let’s break down the definition of head of household a bit. If a single person is supporting only himself or herself, he or she would not qualify for the exemption as there is no child or other dependent involved. Sometimes the question of whether or not an individual is head of household is clear. For example, a single parent, receiving no child support or assistance from the other parent, might easily qualify for the head of household exemption. On the other hand, a single parent with shared custody of two children, may or may not qualify as head of household, depending on the specific facts of the case. Or what if a debtor is caring for and supporting a special needs or elderly adult? These questions can become more involved. The attorneys at Wetherington Hamilton, P.A. are experienced in handling this type of debt collection and related matters. Call us today at (813) 676-9082 to schedule your consultation.

Joan Wadler, Esq.

What is a Fraudulent Transfer?

March 6, 2017/in Articles, Debt Collection/by Ted Hamilton

Several years ago while looking for assets owned by a judgment debtor I discovered that he had recently transferred title to his Corvette to his daughter. It is unusual to find such an obvious example of a fraudulent transfer, but it was not difficult to recover the vehicle and apply it to the amount owed to my client.

Traditionally, a transfer of an asset is considered fraudulent if it is made to an “insider”, such as family member; for less than fair value; when the debtor had been sued or was threatened to be sued.

The law has also established other indicators that a transfer is fraudulent. These are known as “badges of fraud”. Some examples are: the debtor maintained possession or control of the asset; the transfer was concealed; or the transfer was of all of the debtor’s assets. Another example would be that a lien is created on property of the debtor, simply to keep it from being seized.

For corporate debts an officer who is in charge of a business may be held personally responsible if he pays himself before providing for payment to creditors. The officer is considered to hold property of the corporation “in trust” for payment to creditors of the corporation. If he pays himself and the corporation becomes insolvent, a creditor may try and recover against the officer personally. You often see it where it is clear that a business is about to go under and a person in charge of the business starts draining the assets, leaving the creditors out to dry.

Thomas K. Sciarrino Jr., Esq.

Servicemembers Civil Relief Act (SCRA) – Protections and Ramifications

February 20, 2017/in Articles, Debt Collection/by Ted Hamilton

The Servicemembers Civil Relief Act (SCRA), formally known as the Soldiers’ and Sailors’ Civil Relief Act, is a federal law affording certain protections to military members in civil actions under 50 U.S.C., and it’s extremely important to consider the protections this law provides and the ramifications it may have on civil actions and proceedings.

This federal law applies to members of the uniformed services such as the Army, Navy, Air Force, Marine Corps, or Coast Guard. The purpose of the Act is to provide certain protections to military members who have obligations that are affected by their active military service. The protections provided under the law may affect a number of actions such as entry of default judgments, mortgage obligations, eviction processes, collections practices, and other debts or obligations that were entered into by a military member.

The protections cover individuals during their time in service and for a period of time after completing service. As such, it is crucial to determine the military status of a defendant before proceeding with a civil action that may be covered under SCRA. In bringing forth an action, the Plaintiff must verify whether the defendant is on active military duty and provide the court with an affidavit setting forth the defendant’s military status or stating that military status is unable to be determined. The affidavit must be filed before the court can enter a default judgment and in some instances, a court appointed guardian must represent the interests of the defendant in order to proceed with the action unless the defendant waives their rights under the act in writing.

A service member may request a stay of the legal proceedings if the member’s current military duty requirements materially affect the member’s ability to appear and if military leave is not authorized by a commanding officer. In debt collection practices, a court order staying the action could prevent the entry of a judgment or the attachment of a garnishment. In a foreclosure action, the lender must get a court order to foreclose on a service member if the action is brought during the debtor’s active military service. Service members may also be afforded protections during an eviction process or if they are terminating an apartment or vehicle lease, however most of these protections apply to those debts or obligations that were entered into prior to active military service.

The Servicemembers Civil Relief Act can pose a number of issues and restrictions on civil proceedings, therefore it is important to be familiar with the Act and to be in compliance with all of the applicable requirements.

Ashley Simon, Esq.

Debt Collection and Judgment Collection – Hiring an Experienced Attorney Counts

January 30, 2017/in Articles, Debt Collection/by Ted Hamilton

After having practiced law for over 25 years, you would think I would have seen everything. Yet, every day presents a new type of matter with slightly different facts from the others that have come across my desk. From the debtor who paid his $850 dollar debt with a box of quarters, to the interesting friend who paid the debt of his other friend after having been served at the nudist resort, each case is interesting in its own way. Each matter teaches us something new: A new way to deal with litigation, a new way that an individual or entity can try to hide assets, a new way to collect on a judgment. This experience helps us collect a judgment or collect a debt where other attorneys might find the judgment uncollectable.

Our experience lends itself to Judgment enforcement and debt collection when all seems lost. For example, one of our clients sold his business to someone who failed to pay the remaining amount due on a note for the sale of the business. After lengthy litigation in another state, a judgment entered in the case for over $200,000.00. The attorney in the other state called us to assist in collection of the judgment. The debtor had moved to Florida. (This often happens due to Florida’s unlimited homestead exemption). We immediately filed paperwork to localize the foreign judgment in Florida. (This made the Foreign Judgment a valid Florida Judgment). After taking the deposition of the debtor, we found that the debtor had supported his wife and paid his son extensive amounts over the years prior to entry of the judgment. All of his money had gone into his wife’s account or into a joint account. At this point, we sued the wife and son on a fraudulent transfer theory. After setting the wife and son for deposition and moving for a trial, we settled the case for a substantial amount.

Example after example exists where our experience has proven extremely valuable in judgment collection and judgment enforcement. Our firm handles debt collection, Judgment collection and other commercial litigation on a contingency or hourly basis depending on what works best for the client. If you have a debt that is due to you or a judgment that has gone uncollected, let us know. We can help! Please call Ted Hamilton, Kalei Blair or Thomas Sciarrino in our office or email info@whhlaw.com for more information.

Theodore J. Hamilton, Esq.

The Case of the Secret Lover – Buying Jewelry and Bad Credit

January 9, 2017/in Articles, Debt Collection/by Ted Hamilton

Many years ago I represented a local jewelry store. I sued a customer who owed them a substantial debt for jewelry purchases on credit. I sued the customer and obtained a judgment. I was unable to get the customer to respond but soon discovered he owned a new Lincoln Continental free and clear. I levied on the vehicle for my client and the sheriff took it from him. Shortly afterward I received a call from the customer’s son wondering why the jewelry store was taking his father’s car. I explained that he purchased jewelry on an application for credit. A short time later the son called me back and told me his father had a girlfriend on the side for many years and the jewelry was purchased for her. The father did not want anyone to know about this for obvious reasons and he used his girlfriend’s address on his credit application. Service of the lawsuit was made on him at the girlfriend’s address. In the state I was in at the time, a lawsuit could be served by regular mail, provided the mail was not returned by the post office. Apparently, by the time I filed suit the relationship with the girlfriend had gone sour and she accepted the mail but did not tell him about it. The family hired a lawyer who attempted to quash the service but the court ruled the service was good according to the state’s law.

The car was purchased with retirement benefits. His sons told me they could help him out to pay off the debt to my client, but they refused because he was “already in enough trouble”. The car was eventually sold by the sheriff with the proceeds going to pay my client’s debt. The father told me he “really loved that car”. So he not only lost his retirement benefits and the car he loved but he was now also in big trouble with his wife and family. I will let the reader think of the morale to this story as they are too numerous to list.

Thomas K. Sciarrino Jr., Esq.

The Consumer Financial Protection Bureau Found Unconstitutional

November 11, 2016/in Articles, Debt Collection, General/by Ted Hamilton

For anyone involved in the financial services industry over the last four years, the CFPB or Consumer Financial Protection Bureau has become a four letter word. This entity created by Congress as part of the Dodd Frank act passed after the financial collapse in 2008, was given broad jurisdiction to regulate all types of financial services, from banks to title companies to insurance agencies. However, in a ruling on October 11, 2016, the U.S. Court of Appeals for the District of Columbia Circuit found the structure of the CFPB unconstitutional because of the “concentration of enormous executive power in a single, unaccountable, unchecked Director who wields vast power over the U.S. economy.” The case (PHH Corporation, et.al. v. Consumer Financial Protection Bureau) can be found here. As it stands, the director of the CFPB is appointed by the President. This director can only be removed for cause, such as “inefficiency, neglect of duty or malfeasance.” This structure, with the President having no discretion for removal, was found unconstitutional in the PHH case.

The PHH case also vacated a $109 million penalty imposed by the CFPB finding the agency misinterpreted the applicable statute and then violated Federal Law. The issue in the PHH case was RESPA. This act protects consumers from undisclosed arrangements in real estate closings. The court found that RESPA was not violated by PHH mortgage and vacated the penalty. RESPA governs every residential real estate closing. For those who have purchased residential real estate, you may have noticed confusing changes to your closing statements. The CFPB has mandated these changes and others in its attempt to make closings more clear.

Further changes are in the wind as imposed by the CFPB that will cause many small businesses to close. The changes to RESPA have caused tremendous consolidation in the real estate industry and have made the barriers to entry extremely expensive. Similar changes in the banking industry caused by CFPB regulation have made community banks merge or close. These regulations can only lead to higher costs for all of us.

If you are involved in any financial service industry, feel free to call us about upcoming cases or regulations involving your industry. In addition, if you are facing a claim involving regulations adopted by the CFPB, let us know and if we can’t help we can point you in the right direction.

Theodore J. Hamilton, Esq.

Enforcing Your Out of State Judgment in Florida

September 9, 2016/in Articles, Debt Collection/by Ted Hamilton

Problems with Enforcing Your Out of State Judgment in Florida:

The firm of Wetherington Hamilton, P.A. regularly enforces out of state judgments in the State of Florida. These types of cases are handled through the use of the Florida Act that allows the enforcement of foreign judgments in the state of Florida. Once the judgment is recognized in Florida, the attorneys of the firm are used to using process such as garnishment, execution and levy to collect on a judgment.

Theodore J. Hamilton, Esq.

Having a Good Credit Application

August 19, 2016/in Articles, Debt Collection/by Ted Hamilton

business credit application If your business involves granting credit, it is important to have a good credit application. Most creditors are aware of the need to include material about basic information such as ability to pay, shown by income and obligation, and past credit history. Businesses need to be viewed in terms of profitability and stability through determining years in business as well as bank balance and financial statements.

Some items that are also important are often left out of a credit application and should be considered. There should be an attorneys fee provision for defaults in payment as this is required to be in writing in many states to recover the fees changes by an attorney for suit. A waiver of jury trial should be included to avoid additional cost, delays and other difficulties that might be encountered should a suit be decided by a jury. A venue provision should be included so that you have the choice of deciding the best place to file the suit. It should also be clear as to the identity of the person or business who is being granted credit. Another consideration is including a personal guaranty.

These are some of the items to be considered in a good credit application. If you are not certain what you should include or if your application has these provisions, you should consult with an attorney. The lawyers at Wetherington Hamilton are experienced in individual and business credit applications and transactions. If you have questions about a credit application please give us a call at 813-676-9082 or email the author at Info@WhhLaw.com.

Thomas K. Sciarrino Jr., Esq.

What Happens When Someone Attempts to Avoid Being Served?

July 15, 2016/in Articles, Debt Collection, General/by Ted Hamilton

When filing a civil lawsuit in the state of Florida, initial service of process on the defendants named in the lawsuit is critical in order to confer jurisdiction on the courts. The Florida Rules of Civil Procedure and Florida Statutes govern who may serve process upon whom and how service of process may be perfected. See Rule 1.791, Fla. R. of Civ. P. and Chapters 48 and 49 of the Florida Statutes. Without perfecting service of process on the parties, the court lacks personal jurisdiction or authority over the parties and therefore lacks the authority to enter judgment. There are various forms of service, including personal or individual service, substitute service, and constructive service. Personal and substitute service give the Court personal jurisdiction over the parties who have been served, while constructive service gives the court in rem jurisdiction, over something such as property, rather than someone.

So what happens when a person attempts to avoid service of process? Can the court obtain jurisdiction over that person? As one might expect, the answer is, it depends. The statutes and rules regarding service of process must be strictly adhered to in order to perfect service on an individual. Florida Statute 48.031 (1) (a) states as follows:

Service of original process is made by delivering a copy of it to the person to be served with a copy of the complaint, petition, or other initial pleading or paper or by leaving the copies at his or her usual place of abode with any person residing therein who is 15 years of age or older and informing the person of their contents. Minors who are or have been married shall be served as provided in this section.

Interesting situations and questions of law can arise when individuals attempt to avoid being served. If a deputy or process server finds a defendant to be at home, but that person refuses to answer the door or attempts to hide, then at least one court has held that service of process was sufficient when the deputy “…read the summons in a loud voice and announced that he was leaving a copy of the summons and complaint on the doorstep for Mr. Haney and another copy with Mr. Haney as service on his wife.” Olin Corp. v Haney, 245 So.2d 669 (Fla. 4^th DCA 1971). In that case, the deputy attempting to serve the defendants had observed Mrs. Haney leave the house and Mr. Haney remained in the doorway. When the deputy identified himself, Mrs. Haney ran into the house in an apparent attempt to avoid service.

The point is that in order for the court to have the authority to proceed with a civil case in Florida, service of process must be perfected. The experienced collections attorneys at Wetherington Hamilton know how to handle this issue, even when a defendant is attempting to avoid service.

Joan W. Wadler, Esq.

The Doctrine of Accord and Satisfaction

May 9, 2016/in Articles, Debt Collection/by Ted Hamilton

Should you or should you not accept a payment for less that the full amount owed when it is indicated to be for full payment? It is always best to not accept a check for less that the full amount owed if there is any chance that it can be interpreted as being accepted as settlement in full. However, if you do, it may not mean that the debt is indeed settled in full by acceptance of the check.

The doctrine of accord and satisfaction is, “the substitution of a new agreement between the parties in satisfaction of a former one.” Such a compromise will effectively relieve a debtor from the remaining obligation only if a separate agreement has been established between the two parties to the effect that the payment of less than the full amount of the original debt satisfies the obligation.

Although the doctrine of accord and satisfaction is a common law doctrine of contract law, it has been statutorily codified in Florida. Two separate statutes govern the application of this doctrine, depending on whether the debt in question is either disputed and unliquidated (an unknown amount) or undisputed and liquidated (a known amount).

One statute deals with accord and satisfaction by use of an instrument (a check) when a debt is either unliquidated or disputed as to the amount or existence of a debt. The statute sets forth that, “the claim is discharged if the person against whom the claim is asserted (the debtor) proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.” F.S.A. § 673.3111(2). In contrast, the other statute deals with accord and satisfaction in the context of liquidated claims or claims that were not disputed by the parties. The statute provides that, “when the amount of any debt or obligation is liquidated (known), the parties may satisfy the debt by written instrument other than by endorsement on a check for less than the full amount due.” F.S.A. § 725.05. The plain language of the statute appears to prevent the satisfaction (full payment) of an undisputed debt by less than the amount due through a notation on an endorsed check stating that, “the check is payment in full.”

The key to determining whether partial payment of a debt acts as a satisfaction of the debt, is whether the tender of partial payment of the debt constitutes a binding contract that effectively supersedes the original debt obligation. The new contract can either be express or implied from the surrounding circumstances. With undisputed claims, a creditor’s act of depositing a check for less than the amount owed will not constitute an implied satisfaction of the original debt, even if, the check had been enclosed in a letter stating that it was tendered in full satisfaction of the debt, else to be returned, or if words of similar import had been written on the check. It has also been held that an endorsed check for less than the amount owed on the debt does not satisfy the obligation regardless of whether the endorsed check includes the condition that the amount, is a full and complete settlement, of the debt.

While there are protections in place for a creditor who accepts a check for less than the full amount without the intention that it is for settlement in full; it is risky as there may be an issue as to whether the debt is actually disputed or liquidated. Whenever you accept payment when it is indicated that it is for settlement or payment in full, you may have precluded your ability to recover the full amount owed. The attorneys at Wetherington Hamilton have experience representing creditors in many different situations. Please contact the author for more information.

Thomas K. Sciarrino, Esq.