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After Bankruptcy

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14

Apr 2012

After Bankruptcy: Suing Navy Federal

Posted by / in After Bankruptcy / 18 comments

We sue debt collectors and creditors a dozen times a month for doing illegal things to our clients–before bankruptcy or after bankruptcy.

We don’t make a lot of money doing that.  But I think big companies can act like small children–they do what they can get away with.   I don’t let them get away with much when it comes to my bankruptcy clients.  That’s part of my job as a lawyer.

Bankruptcy lawyer Mark Sullivan

Bankruptcy Lawyer Mark Sullivan beat Navy Federal in court, when Navy Fed claimed their collection calls were “merely administrative.”

Most times, once we sue them, they apologize, and send us a check; and we agree not to bad mouth them.  (I can’t write about those.)

Last year, March 2011, Navy Federal decided to fight us.  (Navy Federal is my least favorite financial institution; and I may be their least favorite bankruptcy lawyer.)

They had continued to call my client–Jennifer–after she filed bankruptcy the end of February, 2011.

Jennifer never actually talked to them.  They just left messages on her phone.  A total of 16 voice mails over the space of a couple weeks.

Making collection calls after the bankruptcy is filed, violates “the automatic stay.”  The stay tells the whole world to stop “any act…to collect” a debt from the person who just filed the bankruptcy.

I asked Mark Sullivan, the top lawyer in my Sterling office, to go after them.  And he did.

Navy Fed argued that they were not trying to “collect” a debt.  That the “purpose of the calls was merely administrative.”  (The person who claimed the calls were not collection calls was a collection manager at Navy Federal.   I thought that was pretty funny.)

Mark made short work of them at trial last fall.  Bankruptcy Judge Robert Mayer awarded $500 in damages to Jennifer.  (Different judges in different parts of the country would have gone higher.)

After a second fight, the Judge also awarded us $2585 in attorneys fees and costs.  That spilled over into January.

Just last month, Navy Fed wrote us a check.  The check cleared the bank.

The whole fight took 13 months.  It was worth it.

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Robert Weed has helped twelve thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

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18 comments
  • Amber

    May 22, 2012, pm31 4:46 PM
    01

    Navy Fed is a chronic offender in the Hampton Roads area as well. They like to claim that they did not get notice of bankruptcy whenever we have to call them, even though they voluntarily signed up with our court to receive email notifications, and we can look at PACER and see the court’s own certification that Navy Federal was emailed at their address of choice.

    Those could be human error… a suspicious lot of oversights… but I’m still angry at them about an incident in which one of our more impressionable clients was manipulated by a Navy Fed representative who certainly did know he was in bankruptcy into voluntarily repaying a debt he did not have to (and could not afford to), because she convinced him it would be a good idea.

    So yes, your story made my day.

  • G

    June 13, 2012, pm30 3:58 PM
    02

    Thank you for this story. I had been with Navy Federal for over 30 years. The day my bankruptcy hit the filing, they shut down electronic access to my account. I was told that electronic access was a privilege and that I would have to come in personally for any banking. A member organization? Not in my book!

  • ST

    July 3, 2012, pm31 2:53 PM
    03

    I am currently in Chap 13 through Illinois. I have lost two vehicles to insurance claims. What the trustee says I owe to what Navy Federal states I owe is significantly different. Right now I am waiting a 3k difference since Oct 2011 in my favor.

    I challenged the same issue in a previous insurance pay-off and was told they were right.

    What happens is Navy Federal likes to claim interest as if the loan was not paid off. If you do not challenge them they will keep the money. They are dragging their feet and if my lawyer doesn’t do something soon, I will be suing him as well.

    Just want to put out there to be very suspicious of Navy Federal Credit Union. I was a member for 9+ years as well.

    r/ ST

    • Robert Weed

      July 3, 2012, pm31 4:09 PM
      04

      ST

      Thanks for your comments. I often see Navy Federal push to the very edge of what the lay allows.

    • Linda

      August 12, 2014, pm31 5:04 PM
      05

      We have been stuck with NFCU for 25 yrs. All these stories ring true. We still receive calls now for arrears that were to be paid by my bankruptcy in 2008. Once again they have place a bldg. Into foreclosure for a debt paid in that old bankruptcy because they are missing money?? They have placed money into a suspense account, unapplied to our mortgage specifically to force this situation. They are intentionally malicious and deliberately violate privacy laws. This is where a real class action lies!

      • Robert Weed

        Robert Weed

        August 13, 2014, am31 10:29 AM
        06

        Linda:

        Thanks for sharing. I hate them, too.

  • Dan

    November 8, 2012, pm30 12:46 PM
    07

    I was a proud member of NFCU for over 25 years; until the day I needed them to work with me – I entered into Chapt 7, and they kicked me to the curb faster than a Seaman Recruit headed for liberty! It’s been almost three years since my Chapt 7 was finalized, I called them today to try and re-establish some kind of relationship. They said I was ineligible to be a member (but yet I still have a savings account there – go figure) since NFCU took a loss during my BK. I agree with “G”, they are NOT a member organization; they could care less about their members – they are just as greedy as the rest of the banks.

    • Robert Weed

      November 8, 2012, pm30 6:33 PM
      08

      Dan:

      Sorry you had that experience, but YEAH, that’s Navy Federal.

  • Taisha

    January 4, 2013, am31 8:23 AM
    09

    I am considering Chap 7 at this time. I have a credit card and a personal loan with Navy Federal both totaling 5200 I would like to add. I also have my home finance through Navy Federal. After reading reviews on Navy Federal and bankruptcy I am very nervous about this. Can they take my home if I file Chapter 7 on the credit card and personal loan?

    • Robert Weed

      January 4, 2013, pm31 3:25 PM
      10

      Taisha:

      No–being Navy Federal they would if they could but that’s illegal. They can’t tie in your other loans to your mortgage.

  • Taisha

    January 18, 2013, am31 7:17 AM
    11

    Hi Mr. Reed

    I talked to an attorney yesterday about filing Chapter 7. He said that Navy Federal has some kind of cross collateral clause, and because my home is financed through them that they may try to add the credit card and signature loan that I have with them to my mortgage pay off, is this true???? Can they do that???

    • Robert Weed

      January 18, 2013, pm31 3:30 PM
      12

      Taisha:

      Wrong. Navy Fed is allowed to tie your credit card and signature loan to a CAR loan, or something like that. But they can’t tie it to your mortgage.

  • Danielle

    September 4, 2013, pm30 11:48 PM
    13

    I also run into the cross collateral situation. I got divorced in 2008 and my ex-husband and I had to keep some loans in both of our names. With Navy Federal Credit Union…I have a car loan, credit card joint with my boyfriend and home equity loan and my ex-husband and I are on the car loan and home equity together, but he also has a separate credit card as well. He stopped paying on everything on his end even the home equity in which I am not paying for because I signed the home over to him and he was suppose to re-finance the home equity in his name solely, but I also run the risk of his other loans not being paid. Well the vehicle was given to me in the divorce, but now I need to file bankruptcy because of my ex-husband not paying the house loans again so I don’t want to be responsible for it since taking him to court would cost more than if I were to file a chapter 7 and start over. I want to keep the vehicle since the title is solely in my name only, but I run the risk of paying off the vehicle and not getting my title. Can they keep the title of the vehicle if I pay it off in my situation?

    I will be paying the credit card even after the bankruptcy because that is in my boyfriend’s name so it has to be paid anyway. Can I keep the vehicle and pay it off without worries of my ex-husbands side of the loans? I can with hold paying all my debt except the home equity because I am not paying for a house or loan for the home equity when I don’t live there and it was court ordered my ex-husband pay these things.

    • Robert Weed

      September 4, 2013, pm30 11:51 PM
      14

      Danielle:

      Obviously you are tangled with Navy Fed in a lot of ways, and I’m not sure I’ve got them all. But I think the key is this. Navy Fed cannot tie a mortgage loan to your car. They can tie a credit card to the car but not the mortgage loan.

      If that answers your question than I think you are ok to do what you are trying to do. If I missed something–we’ll you really need to spread it all out in front of your lawyer.

      • Danielle

        September 5, 2013, am30 12:10 AM
        15

        What if my name is the only one on the title of the vehicle, but the vehicle loan is in both my ex-husband and my name me as the co-signer he is the main one on the loan, but title is only my name. If my ex-husband is delinquent on his debts even a credit card can they still keep the title of the vehicle even though my name is the only one on the title as ownership?

  • Danielle

    September 5, 2013, am30 12:13 AM
    16

    Or also what if I refinance the vehicle elsewhere or sell it to a private party, does NFCU have to release the title to the new owner?

  • Amanda

    March 24, 2014, am31 12:01 AM
    17

    My husband and I only have one payment left on our chapter 13 plan. We had a credit card and personal loans with NFCU that were unsecured and therefore not included in the repayment plan. We did, however, have a used car loan for a car that is now 18 years old. With only one payment left on the plan, we now find out that NFCU never filed a claim against the vehicle. They have also never repossessed it. According to our atty we have two options: 1) File a claim on behalf of NFCU that will extend the payments on our plan, pay the debt for the car, and force NFCU to send the title to us after our case is discharged or 2. Finish out the plan as is, receive our discharge, and then attempt to negotiate a settlement with NFCU on our own to get the title to the vehicle. Any thoughts?

    • Robert Weed

      March 24, 2014, am31 10:07 AM
      18

      Amanda:

      Your lawyer certainly knows more about your local procedures than you or I do. And you know better than I do how important the 18 year old car is or isn’t to you. So you are seeing your choices real clearly. I can’t add much, except to say, good luck.

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