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

What is Statute of Limitations and Why is it Important?

April 1, 2016/in Articles, Debt Collection/by Ted Hamilton

Black’s Law Dictionary defines statute of limitations as follows: “Statutes of the federal government and various states setting maximum time periods during which certain actions can be brought or rights enforced. After the time period set out in the applicable statute of limitations has run, no legal action can be brought regardless of whether any cause of action ever existed.” Sounds like a lot of legal jargon.

So what does this mean in Florida for civil actions? Florida Statute 95.11 governs the statute of limitations for actions other than for the recovery of real property. For example, the statute of limitations for an action on a Florida Judgment is twenty years (20). It is five (5) years for an action to foreclose a mortgage, or on a written contract, and the statute of limitations is four (4) years for an action on an obligation not founded on a written instrument, including an action for the sale and delivery of goods and on store accounts pursuant to Florida Statute 95.11 (3) (k). If one is pursuing a deficiency on a note secured by a mortgage, the statute is only one year from the day after the clerk of court issues the certificate or the day after the mortgagee accepts a deed in lieu of foreclosure. These are just a few examples of statutes of limitation in Florida, and the legal analysis can be complicated, depending on the facts of the case when applied to the existing law.

Why does the statute of limitations matter? Quite simply, if a law suit is not initiated prior to the running of the statute of limitations for a particular case, and if the defendant raises the statute of limitations as a defense, the case may be time-barred. While there may be events that toll the statute, the rationale behind it is to encourage litigation while witnesses and records are still available, and memories are “fresh”. As indicated, the statute of limitations differs depending on the type of case. The idea is to not wait too long before taking appropriate legal action.

Dealing with a case involving the statute of limitations can be a complicated process and is best done with the consultation of an experienced attorney. If you are considering filing suit and have questions about a particular case or are concerned that the statute of limitations may have run, contact the reputable attorneys at Wetherington Hamilton today and schedule your consultation.

Joan W. Wadler, Esq.

Suing for Payment in Florida

March 25, 2016/in Articles, Debt Collection, General/by Ted Hamilton

In the state courts of Florida, suing for payment can be done in three different jurisdictions – Small Claims, County Court, and Circuit Court.

The jurisdiction for Small Claims is now for amounts not exceeding $5,000.00 for the principal balance claimed. (Note: This does not include interest, costs, and attorney’s fees.) It is also important to note that there are separate Rules of Summary Procedure for Small Claims Court. County Court is for matters involving $5,0001.00 or not exceeding $15,000.00. The County Court judges are the same as the Small Claims judges; however, the procedures are different, as one follows the Rules of Civil Procedure. The jurisdiction for Circuit Court is for amounts exceeding $15,000.00.

Although the Florida Rules of Civil Procedure have several forms which may be simply used for suits for accounts stated, suits for open accounts, and suits on promissory notes, it is very simple to plead a cause of action in Florida.

“A cause of action and shall contain (1) a short and plain statement of the grounds upon which the court’s jurisdiction depends …. (2) a short and plain statement of ultimate facts showing the pleader is entitled to relief, and (3) a demand for judgment for the relief to which the pleader deems him or herself entitled.”

You do not have to anticipate the defendant’s defenses in pleading a Complaint; however, you should act to avoid their defenses by giving sufficient notice of facts and attach all pertinent exhibits and reference the exhibits within the Complaint.

In the Small Claims Court, a Pretrial Summons is necessary to apprise the defendants of a date certain in which they shall appear for pretrial to answer the allegations of the Complaint. There is not the opportunity to file a response unless leave of court is given, and the defendant must simply appear to answer the claims made by the plaintiff. If the defendant is served and fails to appear, a default and judgment may be submitted against them without further notice.

In Florida, the County and Circuit Court summonses are the same among the counties. When a civil action begins, the summons is issued by the Clerk and delivered then to a process server or sheriff, of Plaintiff’s choosing. Service of process may be effectuated by an officer authorized by law to serve process, or as court-appointed “competent person” not interested in the action. Service of process must be made on a defendant within 120 days after an initial pleading is filed, unless good cause for failure to serve is established.

A Complaint has several important sections which put the defendant on “notice” of the claims made against him or her.

As an initial matter, the Complaint must disclose the correct name of the plaintiff. With respect to the naming of the defendant, the defendant should be properly named as either a corporation, partnership, sole proprietorship, or individual.

It is important to note that there are only certain places where you can file a lawsuit. The Florida Statutes outline that a defendant may be sued where the contract was signed, payment was made, or the defendant resides (or does business).

After suit is filed an service is obtained the case can be concluded in several ways. If the defendant fails to respond a default and default judgment can be obtained. If defendant responds but does not plead any defenses, a summary judgment may be obtained. If there a real defenses raised which present issues of fact or law, the case would proceed to trial and the court would rule in favor of one side or the other.

Thomas K. Sciarrino, Jr., Esq.

Perfecting a Judgment Lien

January 29, 2016/in Articles, Debt Collection/by Ted Hamilton

A judgment obtained by a Florida court becomes a lien on the judgment debtor’s real property when it is properly recorded. The creditor’s primary interests in perfecting the judgment as a lien on a debtor’s property are two-fold: (1) first and foremost, strict technical compliance with applicable rules and statutes; (2) to move as quickly as possible to perfect the lien after obtaining a judgment. Failure to adhere to technical requirements may result in loss of priority as against later judgment creditors or transfers of property by the debtor, unaffected by a creditor’s judgment lien. Prompt action to perfect the judgement lien is necessary to establish priority against other creditors, and to obtain execution before the debtor has sufficient opportunity to transfer or assign his/her assets.

Immediately upon obtaining a final judgment, the creditor must obtain certified copies of the judgment and record a certified copy in any and all counties where the judgment debtor owns real property. Recordation of a certified copy creates a lien on the judgment debtor’s real property in that county. Creditors need to be cautious and make sure a certified copy (obtained from the clerk where the judgment has been entered) has been recorded. Many courts will record a copy of the judgment after entry, but this does not create a judgement lien. A certified copy must be recorded to be in compliance with Florida law.

It also must be noted that there is no lien if the address of the judgment creditor is not included. A judgment does not become a lien on real property unless the address of the person who has a lien as a result of such judgment is contained in the judgment or an affidavit with such address is simultaneously recorded with the judgment, order, or decree.

Thomas K. Sciarrino, Esq.

Enforcing a Judgment Through Garnishment

September 11, 2015/in Articles, Debt Collection/by Ted Hamilton

Florida’s garnishment law contains detailed procedural requirements and specific deadlines within which a creditor, debtor and garnishee must file and serve specific pleadings and other documents. A judgment creditor must be aware and alert to these procedures in order to ensure that the creditor does not lose substantive rights, and in order to take prompt advantage of inaction by the debtor and/or garnishee.

A judgment creditor has a right to a writ of garnishment as to any debt due to the judgment debtor from a third person; and any of the debtor’s tangible or intangible personal property in the possession of a third person. In order to be subject to garnishment, a debt owed by a third person to the judgment debtor must be absolute and without contingency. A judgment creditor may successfully garnish a joint bank account to the extent of the judgment debtor’s interest in same, but may not garnish an account held by the debtor and his/her spouse as tenants by the entireties (unless the creditor has a judgment against both spouses).

Prior to October 1, 1993, the State, its agencies and subdivisions were immune from garnishment. Beginning October 1, 1993, however, a debtor’s status as an employee of the State or its agencies or political subdivisions does not preclude a judgment creditor’s right to garnish the debtor’s wages. The garnishment must arise, however, as a result of a contract, a loan, a transaction, a purchase, a sale, a transfer, or a conversion occurring on or after October 1, 1998.

A judgment creditor may obtain a continuing writ of garnishment as to a judgment debtor’s employer, providing for periodic payment to the creditor of a permissible portion of the debtor’s salary or wages as they become due.

The garnishee becomes liable to the judgment creditor for all debts due to the garnishee and any property of the debtor in the garnishee’s control from the time the writ is served to the time the garnishee serves its answer. The garnishee must report any such debt or property in its answer and must retain any deposit, account, or tangible or intangible personal property of the debtor. (Limitation: the garnishee cannot retain assets equal in value to more than twice the judgment amount and/or the amount stated in the judgment creditor’s writ of garnishment). Once a bank account has been garnished the bank must retain the depositor’s funds in compliance with the writ. The bank may not pay certain checks out of the garnished account, regardless of whether the checks predate the service of the writ of garnishment.

Dealing with a judgment and attempting to enforce it through garnishment is a complicated process that is best done with the consultation of an experienced attorney. Call Wetherington Hamilton today to schedule your consultation.

Thomas K. Sciarrino, Jr., Esq.

Florida Consumer Collections Practices Act

June 19, 2015/in Articles, Debt Collection/by Ted Hamilton

Many creditors collecting consumer debts have heard of the Federal Law known as Fair Debt Collection Practices Act. They may be aware that its provisions do not apply to them, but to third party collectors who collect consumer debts. However, Florida has its own version of the law governing collection of consumer debts found in Florida Statute. §559.72 called the Florida Consumer Collections Practices Act. Its provisions apply to anyone collecting a consumer debt, which are defined as any debt for personal, family or household purposes.

There are seventeen prohibitions on persons collecting consumer debts under thee Florida Consumer Collections Practice Act. They are:

One may not “simulate in any manner a law enforcement officer” or any other governmental agent.
One may not “use or threaten force or violence.”
One may not “tell a debtor who disputes a consumer claim” that “information affecting the debtor’s reputation for credit worthiness” will be disclosed to third parties, unless one tells the debtor that such disclosure will be supplemented with the fact that the claim is in dispute.
One may not “communicate or threaten to communication with a debtor’s employer prior to obtaining final judgment against the debtor.”
However, one may make this type of communication if “the debtor gives his permission in writing . . . or acknowledges in writing the existence of the debt after the debt has been placed for collection.”
Also, one may tell the debtor that “his employer will be contacted if a final judgment is obtained.”
One may not disclose to an unrelated third party “information affecting the debtor’s reputation . . . with knowledge or reason to know that the other person does not have a legitimate business need for the information or that the information is false.”
One may not “disclose information concerning the existence of a debt known to be reasonably disputed by the debtor without disclosing that fact.”
What if one discloses information concerning the existence of a debt before the debtor reasonably disputes the debt in writing? Then “the person who made the original disclosure shall reveal upon the request of the debtor within 30 days the details of the dispute to each person to whom initial disclosure . . . was made.”
One may not “willfully communicate with the debtor or any member of his family with such frequency as can reasonably be expected to harass . . . or willfully engage in other conduct which can reasonably be expected to abuse or harass . . .”
One may not “claim, attempt, or threaten to enforce a debt when such person knows that the debt is not legitimate or assert the existence of some other legal right when such person knows that the right does not exist.”
One may not “use profane, obscene, vulgar, or willfully abusive language in communicating with the debtor or any member of his family.”
One may not “use a communication which simulates . . . legal or judicial process or which gives the appearance of being authorized . . . by a governmental body, or an attorney-at-law, when it is not.
One may not “communicate with a debtor under the guise of an attorney by using the stationery of an attorney or forms or instruments which only attorneys are authorized to prepare.”
One may not “orally communicate with a debtor in such a manner as to give the false impression or appearance that such person is or is associated with an attorney.”
One may not “advertise or threaten to advertise for sale any debt as a means to enforce payment,” except through a court order or assignment for benefit of creditors.
One may not actually, threaten to, or cause a publication or posting of “individual names or any list of names of debtors, commonly known as a deadbeat list, for the purpose of . . . collection.”
One may not “refuse to provide adequate identification . . . when requested to do so by a debtor from whom he is collecting or attempting to collect a consumer debt.”
One may not write words on the outside of an envelope or a postcard that are “calculated to embarrass the debtor.”
One may not “communicate with the debtor between the hours of 9:00 p.m. and 8:00 a.m. in the debtor’s time zone,” without the prior written consent of the debtor.

The penalties for violations can be costly. If a creditor has repeatedly “harassed” a consumer, but has not engaged in a clear pattern of abuse, an administrative fine up to $1,000 may be imposed. A debtor who has been “harassed” may bring a civil action. A successful debtor will be entitled to recover the greater of $500 or his/her “actual damages” from the violator. In addition, the debtor shall recover “court costs and reasonable attorney’s fees.”. It is within the Court’s discretion to award punitive damages to a successful debtor. The Court may also “provide such equitable relief as it deems necessary or proper, including enjoining the creditor from further violations.”

The area where some creditors can get tripped up is communicating with a debtor when you know the debtor is represented by an attorney. The civil penalties can add up if the violations are severe of if you have to pay the debtor’s attorney’s fees.

Thomas K. Sciarrino, Esq.

SHOW ME THE MONEY – The Cost of Fraudulent Transfers

May 8, 2015/in Articles, Debt Collection/by Ted Hamilton

Should I accept a payment or check from someone other than the individual or entity who owes the money?

Picture this scenario, it has likely happened to most of us. Someone owes you money for some reason, be it rent, paying a bill, paying back a note or any number of other reasons. When you get the payment, however, the person or company writing the check is unfamiliar to you. Someone else or another company, for whatever reason, is paying and you have no idea why. Most people don’t really care where the money comes from, you are just getting paid, that is what is important. In reality, however, under Florida law you may be subjecting yourself to an unwanted lawsuit by accepting these funds.

The Florida Uniform Fraudulent Transfers Statute make you potentially liable to creditors of a corporation or individual from whom you accept payment for amounts due to you from another person. For example, a contractor does work on a home owned by the president of a company, and then the company pays the contractor for this work. In this case, the contractor could be forced to turn this money over to creditors of the company if the company is having financial troubles at the time. In other words, the contractor could at some point, even up to four years later, be forced to pay back this money to the Company and its creditors.

In the example above, if the purpose of the payment was to hinder, delay, or defraud a creditor or if the Company didn’t get some type of value for the payment to you and the Company is on its last leg financially, the transfer could be fraudulent. This law applies regardless of whether you knew about the financial condition of the Company or not. If a creditor of the Company finds out about this payment to the Contractor, they might have to pay the money back or at the very least defend an expensive lawsuit.

The best course of action is not to accept payments on money due to you from anyone except the person who owes it to you. Checks from those who are not your client or who don’t owe the money should cause you to raise a red flag. If it happens all the time, you need to ensure you ask why these payments are coming from a different person or company. Due diligence in such a case will save you grief and an expensive attorney’s fee bill in the long run.

Ted Hamilton, Esq.

Collection of Fraudulent Transfers Made to a Spouse in the State of Florida

January 13, 2015/in Articles, Debt Collection/by Ted Hamilton

Often a creditor, in the attempt to collect on a judgment will find the judgment debtor has placed some or all assets into a joint bank account held with the judgment debtor’s spouse or the assets have been transferred in some way to a spouse. This may seem like a lost cause, but our recent experience has proven otherwise.

In Florida, under the Uniform Fraudulent Transfer Statute, transfers made to a spouse within 4 years of the transfer may result in a judgment against the judgment debtor’s spouse for the amounts transferred. To pursue the claim against the Spouse, the judgment creditor may either bring a separate action against the spouse who received the Fraudulent Transfer of assets or may use the Proceedings Supplementary Statute at 56.29 Florida statutes to execute on the existing Judgment.

The Florida Uniform Fraudulent Transfer Statutes at Chapter 726 defines a transfer as “every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and included payment of money, release, lease, and creation of a lien or other encumbrance.” This broad definition gives creditors extreme latitude in discovering and suing for transfers to a spouse. The definition would likely include, movement of assets into a bank account solely held by the spouse, paying for “stuff” which the debtor states is exclusively owned by the spouse, paying the spouse a salary for work not performed, and giving the spouse property of any kind which the spouse did not earn in any way. These fraudulent transfers will also occur if the judgment debtor transfers individual assets into jointly held property.

Debtors are clever in disguising their transfers. Other clever means of moving assets to the spouse include having the spouse own the shares of the company run, managed and controlled by the judgment debtor. The Spouse may receive a large salary for doing clerical work for the company along with stock payment distributions. This type of arrangement is difficult to spot due to the fact that judgment debtor will defend the quality and quantity of work of the spouse. What gives the judgment debtor away in this instance is the small salary paid to the judgment debtor for doing most if not all work for the company. Such an arrangement is actionable as a fraudulent transfer and can be pursued against the spouse.

Once the transfer exists, the determination as to whether it is fraudulent is defined by Florida Statutes Chapter 726. These sections make fraudulent transfers fairly easy to prove when they are made by the Judgment Debtor to the spouse after the Debtor knows there is a pending collections claim.

The creativity in disguising fraudulent transfers never ceases to amaze the attorneys at Wetherington Hamilton, P.A. With technology making transfers of money easier every day, the type fraudulent transfer will also expand. Our hope is that you will decide to pursue these claims to ensure that this type of activity is limited in the future.

Theodore J Hamilton, Esq.

Wage Garnishment – Good & Bad News

June 13, 2014/in Articles, Debt Collection/by Ted Hamilton

THE GOOD NEWS AND BAD NEWS FOR CREDITORS DOING A WAGE GARNISHMENT IN FLORIDA

Creditors enforcing payment of a judgment through a wage garnishment in Florida have some good news and some bad news. First the good. A judgment creditor can obtain a garnishment of a debtor s wages of up the 25% of the disposable income. It is also good news that the garnishment is continuing in nature and the deduction from wages continues from each paycheck until the judgment is paid. Garnishment is accomplished without advanced notice to the debtor.

Now for the bad news. Florida allows a head of household exemption from wage garnishment. A head of household is a debtor who provides more than one-half of the support of a dependent or other family member. Family members can include parents or grown children. The burden is on the debtor to prove head of household status. This is accomplished by filing a claim of exemption asserting the reason for the exemption. If the creditor objects, a hearing is held where the debtor testifies and can be cross-examined by the creditor about the entitlement to the exemption.

If an exemption is granted, the garnishment ends. If denied, the garnishment proceeds and funds are deducted from pay until the judgment is paid.

Unfortunately, there is more bad news. Florida considers wage of a head of household deposited in a bank account as also exempt. The funds do not lose their character as wages when deposited. Unless the debtor has other funds in the account that are not wages, the bank account will be exempt, if the debtor asserts and proves the exemption claim.

We can end this on some other good news for creditors. There can only be one head of household. If a creditor has a judgment against a husband and wife, and they are both working, the one making the least money can have wages garnished. Also, debtors often claim a right to exemption, but do not always prove their entitlement to it.

By: Attorney Thomas Sciarrino