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Expert: Creditwrench - 2/1/2010


Question
Hello, I am on the BOD of a large community.  Some of the BOD members are wanting to set a collection procedure in place where all of the delinquent owners are sent to the attorney for collection - even those who have contacted us regarding payment arrangements over time and/or making payment less than 30 days late because of unforeseen financial issues.  I DO NOT agree with this, as do a few others - unfortunately we are in the minority.  Our only option is to present a legal reason not do, such as violating FDCPA or perhaps the possibility of ending up having to pay the attorney fees should a case end up going to court. Can you please given an opinion?  Thanks.

Answer

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Your fears are very real indeed. Your HOA may or may not be liable under FDCPA or FCRA or other laws but as soon as you hire a collection agency or an attorney they become liable and the HOA will end up paying the costs of litigation to get the debt collectors out of trouble they themselves were responsible for and it isn't likely to be cheap.

Although it wasn't a HOA situation, a friend of mine was taken to court by an apartment complex. They wanted $1700 and they ended up with an judgment for $80. Their lawyer spent about 3 days in court trying to win the case and it ended up with my friend getting a judgment against him for $80.00 and the lawyer got 10 percent of that. $8.00 for more than 3 days work. Then we took the lawyer and their debt collector to federal court where my friend was awarded $3800 plus $350 court costs plus $1100.00 attorney fees, got the $80 local court judgment vacated and made the apartment complex remove all entries from his credit reports.

Your HOA can get hit with that kind of costs or more. If they commit violations of Fair Credit Reporting Act (FCRA) they can be hit with unlimited damages, actual damages and punitive damages as well. If that happens it can amount to an almost unimaginable amount of money.

If you have any doubts about the truth of what I am saying just go out and find a HOA member who has been mistreated by the HOA and is willing to fight all the way to federal court and I'll prove it to you.

Any HOA foreclosures will work too. A foreclosure can turn really, really nasty, especially with the new laws that have been put in place over the last year or so.  

Creditwrench

Expertise

Debt Collections law, Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), federal law, how to properly answer court summons for collection cases, how to prepare federal cases against debt collectors, how to deal with debt collection phone calls.

Experience

I've been an active consumer advocate for more than 40 years and have helped hundreds of people win cases against debt collectors as well as helping them defeat demands for summary judgment lodged against them by banks, debt collectors and defeat mortgage foreclosures and keep their homes.

Education/Credentials
Paralegal courses for the most part.
I have been teaching people how to deal with judgments, mortgage foreclosures and other such problems both on and off the internet for many, many years. I am a Richard Cornforth information provider ever since 2000 and worked with many other organizations and causes since 1980. I was Oklahoma State Chairman for the nationwide drive to defeat the Constitutional Convention which was proposed by various factions within our federal government such as the Council of State Governments and the National Organization of State Governors who were working hard to organize a Constitutional Convention to be held in 1995 for the purpose of rewriting our American Constitution to be more acceptable to the United Nations. I worked with Senator Charles Duke of Colorado and Senator Don Rogers of California and many others across the nation to keep them from getting the number of delegate states required to lawfully hold a Con-Con and we were successful. I have worked with many other legislative issues in Oklahoma and have always been very successful.

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