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We hope the articles below help you understand your rights as a consumer. You can scroll through the titles, or sort by Practice Area or Topic. You can also use the search feature to locate information by keyword.

Flitter Milz represents people with a variety of problems involving consumer credit and collections. If you have a particular question or believe your consumer rights have been violated, Contact Us for a no cost consultation.

Author: Consumers Law

What Happens if I Default on my Car Loan?

An unexpected occurrence like illness or loss of employment can leave you struggling to pay bills on time. If you are unable to pay your car loan on time, the lender may choose to repossess your vehicle. However, the lender must handle the repossession properly – whether you have fallen behind or not.   

1) Seek a Deferment Before Default 

Contact your lender before you default to see if a deferment is possible. A deferment will postpone your payments while you catch up with finances. These postponed payments are then applied to the end of the loan.

It is important to receive written confirmation from the lender showing this change to the original loan agreement. Since the terms of the loan have, in effect, been extended, the consumer needs to see how the lender has calculated any additional money to be paid at the end to satisfy the loan.

A deferment will likely still appear on your credit report, but the effect on your credit will not be as negative as a default.

2) Prepare for Repossession

If your loan is in default, understand that the lender has the right to repossess your vehicle. If you think a repossession is coming:

  • Remove all important car vehicle purchase and loan documents from your vehicle
  • Remove all personal items.
  • Note the current odometer reading 
  • Take photographs of the vehicle – interior and exterior.
  • Request that the lender provide you with a written loan payment history and a payoff figure.

3) Evaluate how to Get Your Vehicle Back

The loan agreement that you sign at the time of purchase details your rights if the vehicle is repossessed. If you financed through the dealership, this document is called the Retail Installment Sales Contract or RISC. It will state whether you must pay off the full balance of the loan, pay only past due payments, and pay for towing and storage fees.

After the repossession, you are entitled to receive a notice that details the terms for you to get your car back. This notice may be called a Notice of Intent to Sell Property. You should receive this notice before the vehicle is sold.  Once the vehicle is sold, the lender is to send a Deficiency Letter which confirms the selling price of the vehicle and any remaining balance owed on the loan.

Seek Legal Assistance

If your vehicle has been repossessed within the past six years, whether you fell behind on payments or not, you may have a case to pursue against the lender for wrongfully repossessing your car, truck, boat, motorcycle or RV. Contact Flitter Milz for a no-cost consultation.

Any Change to the Terms of your Auto Loan must be in writing

Many times a job loss, illness, death in the family or divorce cause a hardship making it difficult to keep up with financial obligations. When a borrower defaults on auto loan terms, such as late or partial payments, a lapse in insurance coverage, or death of borrower, the lender may choose to repossess the vehicle.

The loan agreement signed at the time of purchase, or Retail Installment Sales Contract, details the lender’s rights if you default on the terms of the loan, and your rights if the vehicle is repossessed.

Lending money for an auto loan gives the bank or credit union a security interest in the vehicle.  If the loan terms are not met, the vehicle can be repossessed from the borrower.  The lender may demand full payment of the loan, payment of only past due payments, and payment of repossession charges and storage fees.

The lender and borrower may discuss alternative payment options, such as deferred payments. If any changes are made to the terms of a signed loan agreement, the borrower must get those terms in writing from the lender.  For example, if payments have been added to the end of the loan, the lender must show the calculation of any additional funds required to satisfy the loan.

Never rely on a verbal agreement. Any changes to the original terms of an agreement should be in writing.  

Seek Legal Assistance

Whether you have fallen behind on your auto loan payments or not, if your vehicle has been repossessed in the past six years, Flitter Milz will evaluate the repossession for potential violation of your consumer rights. Contact Us for a no cost legal evaluation.

Can I be sent to jail if I owe money?

Debt Collection Harassment

Debt collection contact can be stressful and intimidating, especially iwhen you feel threatened. Debt collectors sometimes use abusive tactics, like threatening a lawsuit when none is intended, or threatening IRS reporting or tax consequences.

Collectors may also tell you that you can go to jail for owing money. This is a tactic that is used to intimidate, and has no legal standing. You can’t go to jail for owing money.

The Law is on your side

The Fair Debt Collection Practices Act (FDCPA) is the main federal law that governs debt collection practices. It prohibits debt collection companies, or law firm collectors, from using abusive, harassing, unfair, or deceptive practices to collect debt from consumers. Whether you owe the debt or not, collectors are never allowed to intimidate, harass, threaten, or abuse you.

Cease & Desist Collection

If abusive collectors continue to contact you, send a Cease and Desist letter and request that collection calls and letters stop.  The collector is not permitted to contact you after receipt of this letter.  However, this does not mean the debt goes away.  Typically, the debt is assigned to a new collection agency, or possibly a law firm collector, to begin a new collection effort.

Attorney Representation

If you are represented by an attorney that is handling your debts, the collector is not permitted to contact you. You must notify the collector of your attorney’s name and contact information and request that any contact about your debt be made directly with your attorney.

Third Party Contact

Collectors may not contact anyone but you about your debt.  If family member, co-workers, neighbors or friends are contacted by a collector about your debt, your consumer rights may have been violated.

Seek Free Legal Help

Flitter Milz is a nationally recognized consumer protection law firm that represents victims of abusive collection tactics.  Contact Us for a free evaluation of contact from debt collectors.

 

8 Steps to Better Credit

Your credit report isn’t just for loans anymore! Job offers, promotions, security clearances, and insurance quotes are now routinely affected by your credit report or other types of consumer reports.

Follow these steps to rebuild and improve your credit.

Request Current Credit Reports

You’re entitled to a free credit report from each of the three credit bureaus, Experian, Equifax, and TransUnion, every twelve months under the Fair Credit Reporting Act (FCRA), and more often if you are the victim of identity theft or on public assistance. Request your credit report regularly and check that all information is accurate.

Address Any Credit Inaccuracies

Credit report errors are fairly common. If there is inaccurate information on your credit report, it’s important that you address it. Write and dispute directly with the bureaus. Include a current copy of the report with your dispute. It will be helpful to highlight the disputed item. Your dispute letter should briefly state why this item is listed incorrectly. Attach any supporting documentation that illustrates your claim. Send your letter to the credit bureau by Certified Mail, Return Receipt.  The bureaus have 30 days to respond to your dispute. If the bureaus don’t correct the error, you may need to send a second dispute.  Be sure to keep copies of all dispute correspondence.

Pay Bills in Full and on Time

Falling behind on payments will have a negative impact on your credit history. Always pay your bills in full and by the date listed on the statement or invoice.

Review Current Accounts

Pay down balances on existing credit cards or loans and pay off delinquent accounts. Be strategic about closing cards; consider keeping cards that you’ve had for a long time that show a consistent payment history and consider closing those with high interest. You should only maintain credit accounts that you can afford.

Maintain Stable Employment

A lapse in employment history can harm your credit. A high debt to income ratio will also negatively impact your credit history.

Do Not Max-out Credit Cards

Part of your credit score is based on your credit utilization, or the percentage of your available credit you use. Never use the maximum amount of available credit. Doing so will hurt your credit score. It’s best to not exceed fifty percent of your available credit.

Do Not Co-sign Loans

When you agree to cosign on a loan, you are liable for payment of the loan, despite any side agreement you may have with the other borrower. If the borrower defaults, you will be responsible for making payments. Co-signing brings a significant risk that you likely don’t want to take on as you rebuild your credit.

Building Credit Takes Time and Discipline

Remember that you must be responsible with credit. Always pay on time and maintain the terms of the credit agreement.

Seek Legal Help

Flitter Milz is a consumer protection law firm that represents victims with credit reporting problems, harassment from debt collectors, and wrongful vehicle repossessions.  Whether you fell behind on payments or not, the credit bureau, debt collector and lender must follow the law.  Contact us for a free legal review to determine whether your consumer rights have been violated.

Is Your Vehicle at Risk of Repossession?

Any number of life situations may impact your ability to keep up with car payments.  Hours may have been reduced at work.  A family member may be seriously ill.  You may be going through a divorce.  If you believe your vehicle may be at risk of repossession, follow these six simple steps.

1) Gather Important Documents

Remove all car purchase and loan documents from your vehicle immediately. Keep these documents in a safe place in your home, not in your car. In most cases, auto lenders are not required to contact you in advance of a repossession. If your car is repossessed, gather all car purchase and finance documents for a qualified consumer protection attorney to review.

2) Request a Loan Payment History from the Lender

Contact the lender for a complete Loan Payment History which reflects all payments from the date the vehicle was purchased to the present.

If the payment history does not agree with your records, you may dispute the errors with the lender. If you defaulted on your payments, the payment history will show late fees, interest, or other charges added to your account. Be sure that the lender’s calculations are correct.  If any payments were not recorded properly or were misapplied, send a written dispute to the lender with documents that support your dispute.

3) Photograph the Condition of Your Car

Take photos that show the current condition of your vehicle, including the interior, exterior and odometer reading.

4) Do Not Hide Your Vehicle

It is illegal to hide your vehicle if the lender is attempting repossession. Review your signed loan agreement for the terms of your loan.

5) Secure Any Agreement to Defer or Avoid Repossession In Writing

If you have an understanding with the lender to permit you to catch up on payments or defer a repossession, be sure to get that agreement in writing. Whether you get a letter from the lender, have an exchange of emails, or send your own letter detailing the terms, it is important to create a document which confirms the agreement.

6) Seek Legal Help

Contact Flitter Milz for a free evaluation of your case.  Whether you have fallen behind on payments or not, the lender must follow the law.

 

How do I know if the Debt Collector is Legitimate?

Calls from debt collectors are worrisome, especially if the collection agency or law firm collector name is unfamiliar to you. You may be told misleading or false information about a debt they claim you owe.  Or, you may be threatened with an action if you don’t pay. Here are a few signs that may indicate that the collector isn’t legitimate.

You Don’t Recognize the Debt

If the debt in question is completely unfamiliar to you, it could be a scam. Ask that the collector provide a validation of the debt and a detailed itemization of any amount they claim is owed.

If you don’t recognize the collection firm, keep in mind that creditors will often assign past due balances to a collection agency or law firm collector. You may begin to receive collection calls or letters demanding payment from this third party collector years after defaulting on credit cards, loans, medical bills, etc.

You are not provided with details

If you are unfamiliar with the collection agency, ask the collector for the name of the firm, where it’s located – address and phone – and the collection agent’s name.   Also, ask the name of the underlying creditor, account number and balance claimed.  A collector who won’t provide any of this information is worthy of suspicion.

You are asked to provide personal
identifying information

Never provide or confirm personal identifying information, such as social security number, birth date or bank account numbers, over the phone. Request that the collector send you a letter detailing the name of the creditor, account number and amount owed.

If you do not like the way you’ve been treated by the collector, you may write and request they Cease & Desist all contact with you.

You are Threatened by the Collector

Under the federal Fair Debt Collection Practices Act (FDCPA), debt collectors can’t threaten to take an action they don’t intend to take.  For example, they can’t say, “We’ll sue you if you don’t pay,” when they have no intention of filing a lawsuit.  If you are threatened with a lawsuit or possibly arrest, your consumer rights may have been violated.

Seek Free Legal Help

Flitter Milz is a nationally recognized consumer protection law firm that represents  victims of abusive collection tactics.  Contact us for a free legal evaluation for violation of your consumer rights – whether you owe the debt or not!

Does Divorce Hurt Your Credit?

Getting divorced can come with plenty of heartache, paperwork, and even financial burden. But one of those struggles does not have to include a dip in your credit score just because you signed divorce papers. 

Be proactive.  Take the following steps to evaluate your personal credit and those accounts that are shared jointly with your ex-husband or wife.  If there are errors on your report, dispute them by sending a letter to the credit bureau(s).  It is important to maintain a report with accurate information. 

Obtain current credit reports

Write to Transunion, Experian and Equifax for a current copy of your credit files.  You are entitled to one free copy every twelve months.  You may have to pay a fee if you want to receive a copy more frequently.

Review your credit reports

Although the credit bureaus share information about your credit history, the actual information reported from one bureau may differ from another.  Obtain a copy from each bureau and review the listings.

 Dispute Errors on your report

Send a written dispute to the bureau(s) that list inaccurate information on your credit file. Be sure to enclose documents that support your claim of an error on the report.  The credit bureaus have 30 days to respond to your dispute.  If the information is not corrected, you may need to send a second, or sometimes third, dispute to the credit bureau.

Get Legal Help

Flitter Milz is a consumer protection law firm that represents victims of inaccurate credit reporting.  Contact us for a free evaluation of your reports and correspondence you’ve had with the credit bureaus.  If your consumer rights have been violated, you may have a lawsuit to bring against the credit reporting agency.

 

Co-signing a Loan: All Risk, Little Reward

Co-signers lend their names and good credit histories to the primary borrower, usually when the other borrower cannot obtain credit on his or her own.  For example, a parent may co-sign for a child who does not yet have a credit history. Or, someone may be asked to co-sign by a friend or relative whose credit is tarnished, has negative marks in their credit history, or a low credit score.

Co-signing a loan does not mean that you are serving as a character reference for someone else. Here’s what you should know before you co-sign a loan.

Five Dangers of Co-Signing a Loan

1) You’re Liable

When you agree to co-sign on a loan, you are liable for payment of the loan. You risk having to repay any missed payments immediately, or having to pay the full loan balance if your co-borrower defaults.

If the co-borrower defaults on the loan, the lender can use the same collection methods against the co-signer, such as demanding repayment of the entire loan, filing a lawsuit, and garnishing bank accounts after a judgment.

Credit scores may be impacted negatively by any late payments or defaults by either co-borrower. If the primary borrower dies, loses a job, goes through divorce, files bankruptcy, or otherwise fails to make payments, all responsibility for meeting the terms of the account generally transfers to the co-signer.

In some cases, the person who thought they were merely a co-borrower or guarantor was really listed in auto finance documents as the primary borrower. Be aware that if your co-borrower is primarily irresponsible for timely monthly payments, your credit score could suffer if he or she pays late, even if the lender did not give you a timely notification of the missed payment.

2) You Could Be Sued if Payments Aren’t Made

Failure to pay on the loan (or another breach of the loan agreement, like not keeping up the car insurance) means the lender can come after you for the entire balance. The co-signer often gets sued first because their credit is stronger and the bank believes they’re more likely to repay the debt.

3) It’s Difficult to Remove Your Name from the Loan

Once the account is opened, it’s very tough to remove a co-signer from the loan. We often hear stories of car buyers being told by the salesman to return after four to six months, at which time the dealer will supposedly remove one of the borrowers from the paperwork. This is not true, but rather a tactic to sell cars. Both the primary borrower and co-signer need to satisfy the loan in order to terminate the loan agreement, or obtain the lender’s express permission to remove one of two co-borrowers.

4) Tax Consequences of Settled or Unpaid Debt

The lender might not want to go through the trouble of suing you, so they agree to settle a post-repo deficiency balance for less than the balance owed. This means that you could have tax liability for the difference.

For example, if you owe $10,000 and settle for $4,000, you may have to report the remaining $6,000 as “debt forgiveness income” on your tax returns and pay tax on it. Settling on the account for less than the full sum may also leave a negative mark on your credit report. You may need to seek professional tax advice on this.

5) Difficulty getting approved for a loan

Before you co-sign for someone, think about whether or not you’ll need to use your credit for your own needs. A lender may deny a credit application if there is too much credit in your name or the balances are too high relative to your income.

Seek Legal Advice

Flitter Milz is a nationally recognized consumer protection law firm representing people in matters against lenders, debt collectors and the credit bureaus.  Whether you or the co-borrower has fallen behind on payments or not, Contact Us for a FREE evaluation of whether your consumer rights have been violated.

Why was my Credit Application Denied?

Applications for new credit go through an approval process. The prospective lender has criteria that is considered when reviewing a credit application.  Factors such as the items listed below may have been examined:

–   Your credit and payment history
–   Your income
–   Your total debt to income ratio
–   Multiple applications for credit within a short period
–   Had you filed for bankruptcy
–   Your age
–   Do you need a co-signer

While specific qualification criteria may vary from one creditor to another, a determination is made whether to extend or deny the application. When a credit application is denied, the applicant will receive a letter from the creditor with an explanation of why the credit was declined. Here are some possible reasons behind your credit denial:

Errors on your Loan Application
Your application had errors.  Review your loan application to see whether information was incomplete or misspelled.  Check your identifying information closely for your full name, address, social security number, and birth date. Remember that multiple applications in a short amount of time could also hurt your ability to be approved.

Errors on your Credit Report
Within 60 days of a credit application denial, you may request a free credit report from each of the credit bureaus  —  Transunion, Experian and Equifax. Write to the bureaus for a new report.  Review them for listings that may be inaccurate.  If you see errors, such as duplicate negative listings, accounts that you do not recognize, or incorrect reporting, you must send written disputes to the credit bureaus.  Your dispute letter should include documents that illustrate why the error should be corrected.  Send your letter by Certified Mail, Return Receipt to the credit bureau.  They have 30 days to respond to your dispute.  If the bureaus continue to list the error, you may need to send a second dispute.

Employment History
Review your employment information. Make sure the listings for your employer(s) are accurate.  If there has been a lapse in employment, it could be a factor that was considered for the credit denial.

Credit Payment History
Erratic payment history can also lead to credit denial. Late or missed payments and charged off accounts reflect negatively on your payment history. High balances, collection accounts, and repossessions could also lead to denial.  Also, no credit history could be reason for denial. Creditors may be unwilling to offer credit if you don’t have a well-established credit score.

Public Records
Review your report to see if there are public records listed for bankruptcy, judgments, or tax (or other) liens.  If any of these items have been satisfied, you will need to dispute the listing with the credit bureau and provide documentation showing the obligation has been paid.

Financial Problems
Financial struggles can also be the root of credit denial. Collection accounts and a high debt to income ratio will reflect negatively on your credit history. A high number of credit inquiries are another negative.

Seek Legal Help

Flitter Milz is a nationally recognized consumer protection law firm representing victims of credit reporting privacy and accuracy issues, abusive debt collection contact and wrongful repossessions.  Contact Us to discuss your consumer credit concern.

Why is the Same Debt Listed Multiple Times on My Credit Report?

If a creditor assigns or sells your account to a collection agency, it is possible that the creditor and collection agency will list the same debt on your credit report. Multiple negative listings for the same obligation can lower credit scores and make it more difficult to get approved for a personal loan, buy a car, or refinance a home. These duplicates are not legal. What should you do?

Correct Your Credit Report

Even if you pay the debt, the duplicates could still appear on your credit report. If you spot a duplicate entry, write and dispute the inaccurate listing on your credit report directly with the credit bureau.

Your dispute letter should include a copy of the report with the disputed item highlighted. Briefly state why this item is listed incorrectly. Attach any supporting documentation that will verify your claim. Send your letter to the credit bureau by certified mail with a return receipt so that you have proof your dispute was received. The bureaus have 30 days to respond to your dispute.

Take Action and Get Results

If you are struggling to correct errors on your credit report, seek the guidance of a qualified credit report law firm. Obtaining good advice to resolve credit reporting errors may help in reaching future financial goals.

Seek Legal Help

Flitter Milz is a nationally recognized consumer protection law firm that represents victims with credit reporting accuracy and privacy problems.  Contact Us for a free consultation to determine whether your consumer rights have been violated.