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Apr 2012After Bankruptcy: Suing Navy Federal
Posted by Robert Weed / in After Bankruptcy / 10 comments
We sue debt collectors and creditors a dozen times a month for doing illegal things to our clients–before bankruptcy or after the 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 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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Since 1993, the Bankruptcy Law Office of 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, RobertWeed has been interviewed on local and national TV and quoted in newspapers across the country.
Amber
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
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
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
ST
Thanks for your comments. I often see Navy Federal push to the very edge of what the lay allows.
Dan
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
Dan:
Sorry you had that experience, but YEAH, that’s Navy Federal.
Taisha
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
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
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
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.