Debt Collection A to Z: S is for Security Agreement

Myth:  Anytime one purchases or leases a vehicle there is an automatic right of repossession for the seller or lessor.

Fact:  Anytime a seller or lessor wishes to have the right of repossession there must be a written agreement signed by the purchaser or lessee.

A security agreement is what is used to create the right of repossession.  The agreement secures the collateral (i.e. the vehicle or good being transferred) and typically provides the seller/creditor/lessor with several legal options regarding recovery of the collateral.

One for your briefcaseA security agreement need not be a fancy document but in order to create a security interest enforceable against the debtor, there  are three requirements set forth in UCC 9-203(b):

  1. The secured party must give value;
  2. The debtor must have rights in the collateral; and
  3. The debtor has authenticated (e.g., signed) a security agreement.

OK, so how does this happen in real life?  Usually the seller/lessor/creditor will have a document that specifically identifies the item being transferred and states the buyer/lessee/debtor agrees that in the event of a default the seller/lessor/creditor has the right to collect on collateral, the right to repossess collateral, the right to sell or dispose of collateral, and the right to retain the collateral in full or partial satisfaction of the debt with the borrower’s consent.  A Bill of Sale, finance contract, retail installment sales contract, and other items typically seen in consumer transactions may create the security agreement BUT the key is not the name of the document but the substance of the document.  If certain items are missing there is no right to repossess or otherwise regain the collateral.

If you are a consumer whose collateral has been taken or is subject to being taken you should consult an experienced consumer law attorney for a review of your rights and the other party’s remedies.  Burying your head in the sand can be a huge problem.  What you do not know can sink you in the quicksand.


Taking the Chill Out of Winter Weather Vehicle Repairs

The maxim of “be careful what you ask for as you just might get it” rings quite true for me.  Many of you know I spend my formative years (age 1 to 13) in New York and obviously living in the Big Apple I saw my share of snow and ice and other winter precip. I am a Southerner now and have no plans or desire to move back to New York but I will admit one of the things I miss about winter in the world’s biggest city is the opportunity for several rounds of snow. Here in North Carolina the past few years have featured some measurable snowfall and winter weather and right now we are in the midst of a winter precip cycle.  Snow and ice last week, snow today across the state, and more headed our way today and Thursday.

Unfortunately with the winter weather come incidents and accidents. If your vehicle is damaged in a wreck suddenly you may be in the market for vehicle repair. When handling your vehicle repairs educate yourself.  North Carolina has a Motor Vehicle Repair Act which provides rights to consumers and imposes certain obligations on repair facilities. Here are a few of your valuable rights:

  • to receive a written repair estimate for estimates of repair over $350.00
  • to inspect and retain any parts removed from your vehicle [provided you make the request at the time you authorize repairs]
  • to receive an itemized written invoice for parts and labor provided to repair/service your vehicle

And note your rights as a consumer apply all year round; long after winter is gone or before it arrives. Take some time to learn a bit more about your rights when your vehicle is in need of repair.  If you have significant problems in obtaining the needed repairs and are in need of assistance you should contact an attorney for a consultation. In the end, be smart, be well, be safe, and enjoy the snow while you can.  Spring is not too far away….


Debt Collection A to Z: R is for Repossession

I know this one is listed under “Car Law A to Z” but it applies also to the world of debt collection.  Read this “Repo Review” and be sure to share with your family, friends, and contacts.

Flashing Lights to Avoid Blue Lights

Ever been driving down the road, street, or highway and see an oncoming vehicle flash headlights at you?  No this is not a Herbie the Love Bug story.  Instead, the flashing headlights are typically a “heads up” of law enforcement ahead.  Undoubtedly this friendly advice Highlights re flashing lightshas saved many a motorist from a traffic ticket and made things on the roadways a bit safer.  Well, it seems some law enforcement agencies didn’t like this tactic and decided to charge motorists who flashed headlights at oncoming motorists.  It now appears that several courts have decided that a motorist’s flashing of headlights, in most circumstances, is protected as free speech under the First Amendment.

If you find yourself snagged with a speeding ticket or other traffic citation DO NOT try to handle it yourself unless you understand the circumstances and potential consequencesConsult a traffic attorney to discuss your situation.  Happy and safe motoring!

Bad Car from Dealer + Refund to Consumer= Justice? Maybe Not

Here is a funny yet thought-provoking blog post from a consumer law attorney in Ohio who takes on car dealers.  After reading it if you believe you have a dead donkey or an ailing donkey you purchased from a vehicle dealer in North Carolina feel free to get in contact with me.

Winter Weather Wisdom: Help Yourself

With the winter weather we are seeing across North Carolina today there are bound to be accidents and incidents.  Here is hoping that you are not somehow negatively impacted by the storm or any remnants thereof. If, however, you find yourself injured as a result of  winter weather click here for information on the relevant rules that apply.

If you must be on the roads and highways the next few days please be careful.  Drive slow, keep that phone charged, and use as much caution as possible.  Hopefully you do not lose power, do not sustain any injury or damage to your property, and do have a chance to see some picturesque winter weather.

Flashback Post: Keeping it in Gear for the New Year

2015 is now into the second month.  The crowd at my gym is quite large and a bit larger than it was last year. I will admit that I love to see folks taking care of themselves via nutrition and exercise.  I only wish more folks did so.  But I digress…

In the vein of taking charge of one’s life and one’s health it is often necessary to step back and reevaluate things.  From a nutrition standpoint this includes doing a purge.  To learn more about a P-U-R-G-E you may find helpful click here.  Happy reading and feel free to share with your family, friends, and contacts.  Wishing you a great 2015 and beyond.

The Feds are Coming! The Feds are Coming (for Payday Lending)!

The Consumer Financial Protection Bureau is in the rulemaking process as the payday lending industry continues to rake in scores and scores of dollars in fees and interest at the expense of consumers.  Payday lending has managed to escape the grasp of the law inBrief news for consumers several states and the time has come to level the playing field.  While there is a business purpose and semblance of necessity for short-term loans surely there should be (more…)

Debt Collection A to Z: Q is for Questions

Questions can be good things.  Sometimes folks do not ask enough of them.  Other times people forget to ask the correct questions.  And as we all have heard at some point in our lives the only dumb questions are the ones you do not ask.  Is this really true?  Hmm…that’s a question for another day.  Moving on… (more…)

Debt Collection A to Z: P is for Publication

Hear ye!  Hear ye!  Now hear this….be careful what you publish and how you publish.  This maxim definitely applies to debt collectors.

Under the Fair Debt Collection Practices Act (applies only to debt collectors; not original creditors) and the North Carolina Debt Collection Act (applies to ALL species of debt collectors including individuals collecting on their own debt) when you are making  Thumbs down for publishingphone calls, sending letters, posting notices, and otherwise engaging in debt collection be conscious of how you do it.  One illegal tactic used by some collectors is the “deadbeat list” in which the names of debtors and the amounts owed (and often other information) is posted in a place for third parties to see. Presumably the goal of the deadbeat list is to shame the debtor into making arrangements to pay the debt.  While it may be effective it is illegal.

Homeowners associations, condo associations, and similar entities often employ deadbeat lists.  In one case I worked on a community in the Triad area posted a deadbeat list of the names, unit numbers, and monetary amounts owed by homeowners who allegedly owed for homeowner dues, assessments, and other monetary amounts.  Now read the North Carolina law on publication of debts and see if you see any problems (see the red font below):

§ 75‑53. Unreasonable publication.

No debt collector shall unreasonably publicize information regarding a consumer’s debt. Such unreasonable publication includes, but is not limited to, the following:

(1) Any communication with any person other than the debtor or his attorney, except:

  1. With the written permission of the debtor or his attorney given after default;
  2. To persons employed by the debt collector, to a credit reporting agency, to a person or business employed to collect the debt on behalf of the creditor, or to a person who makes a legitimate request for the information;
  3. To the spouse (or one who stands in place of the spouse) of the debtor, or to the parent or guardian of the debtor if the debtor is a minor and lives in the same household with such parent;
  4. For the sole purpose of locating the debtor, if no indication of indebtedness is made;
  5. Through legal process.

(2) Using any form of communication which ordinarily would be seen or heard by any person other than the consumer that displays or conveys any information about the alleged debt other than the name, address and phone number of the debt collector except as otherwise provided in this Article.

(3) Disclosing any information relating to a consumer’s debt by publishing or posting any list of consumers, except for credit reporting purposes and the publication and distribution of otherwise permissible “stop lists” to the point‑of‑sale locations where credit is extended, or by advertising for sale any claim to enforce payment thereof or in any other manner other than through legal process. (1977, c. 747, s. 4; 1979, c. 910.)

Suffice it to say that publication of a debt may not be a good strategy for the debt collector.  In some cases it could wind up making the debt collector the debtor when the actual debtor has counterclaims and significant monetary damages from the nature and/or quantity of the publication.  Feel free to publish this blog post to your social media, links, favorites, family, and friends.  If you believe your debt has been illegally published contact an experienced attorney for a consultation.