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Credit Unions Š Copyright 2011 Thrasher & Heckman, P.A. All Rights Reserved


Firm Services The Firm provides a wide variety of legal services to our financial institution clients, including traditional litigation and collection services in State and Federal Bankruptcy Court as well as on-site legal audit services and on-site training to ensure our clients' procedural and documentary compliance with Federal and State laws governing its internal recovery and loss mitigation efforts. The Firm represents institutional clients of all sizes throughout Florida. We pride ourselves on personal and prompt service and offer all clients secure online access to all legal matters referred to the Firm via our secure internet site. This enables clients to keep abreast of all developments in their matters by viewing the status and history of all referred cases and associated document images in real time. There is no additional charge for this service. Lastly, the Firm does not charge its Credit Union clients for travel time to or from their corporate offices no matter where they are located in Florida.


Representative Clients The Firm serves as counsel to the following Credit Unions who are as diverse in asset size as they are geographically dispersed. Firm Credit Union clients range is size from our smallest at just $6 million in assets to our largest at roughly $3.9 billion in assets. American Eagle Credit Union (Tampa/Orlando/Jacksonville) American Airlines Federal Credit Union (Dallas/Miami) Credit Union of Texas (Dallas) FAIRWINDS Credit Union (Orlando) First Florida Credit Union (Jacksonville) FLAG Credit Union (Tallahassee) Florida State University Credit Union (Tallahassee) Florida Commerce Credit Union (Tallahassee) GTE Federal Credit Union (Tampa) Gulf Winds Federal Credit Union (Pensacola) Harvesters Federal Credit Union (Pensacola) Innovations Federal Credit Union (Panama City) Jefferson County Teachers Credit Union (Monticello) JM Associates Federal Credit Union (Jacksonville) Okaloosa County Teachers Federal Credit Union (Crestview) Pen Air Federal Credit Union (Pensacola) Tree Capital Credit Union (Perry) VyStar Credit Union (Jacksonville)


“Law school has been described as a place for the accumulation of knowledge..... First-year students bring some in and thirdyear students who depart take none away. Hence, it accumulates” –Unknown


Collection Strategies to Avoid Pitfalls & Get Better Results Ă‹ State Court Topics Ă‹ Federal Court Topics


State Court Topics Ë Repossession Notices Ë Voluntary Surrender Forms Ë Answers to Writs of Garnishment Ë Debtors Represented by Counsel


Federal Court Topics Ë Ë Ë Ë Ë Ë Ë

Reaffirmation Agreements Cross-Collateral Clauses Lien “Stripping” “Freezing” Accounts and Right to Offset Credit Reporting Requirements & the FCRA Adversary Proceedings Creditor Registration


Repossession Notices Before Sale Ë Content (See § 679.614, Florida Statutes) Ë Timing (See § 679.612, Florida Statutes) Ë Method of Delivery


The Deficiency/Surplus Notice Ë Content (See § 679.616, Florida Statutes) Ë Timing (See § 679.616, Florida Statutes) Ë Method of Delivery


“Computers have enabled people to make more mistakes faster than almost any invention in history, with the possible exception of tequila and hand guns” –Mitch Ratcliffe

Consequences of Mistakes In this Area: Ë Loss of Right to Deficiency Judgment Ë Loss of Credibility with the Court Ë Class Action Liability


“Voluntary Surrender” Forms Ë Waiver of Pre-Sale Notice and Waiting Period Ë Admission of Default Ë Waiver of Claims Against Credit Union Ë Disclaimer of Rights to Personal Property and “Accessions”


Answers to Writs of Garnishment Ë Importance of Timeliness of Answers Ë Placing Proper Holds on Accounts See § 77.19 Amount retained by garnishee.—No garnishee who is indebted to or has in his or her possion the money of a person whose money or credits may be garnisheed shall retain out of the money more than double the amount which the writ of garnishment specifies as the amount plaintiff expects to recover or more than double the amount of the judgment plaintiff has recovered.

Ë “Protected Amounts” under Federal Law Ë When to Release Holds Ë Attorneys’ Fees and Costs


Members “Represented” by Counsel When is a member “represented” by counsel? Ë § 559.72(18) Florida Statutes provides that it is an unlawful to : Communicate with a debtor if the person knows that the debtor is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless the debtor’s attorney fails to respond within 30 days to a communication from the person, unless the debtor’s attorney consents to a direct communication with the debtor, or unless the debtor initiates the communication. Ë § 559.72(18) Florida Statutes defines “communication” as the conveying of information regarding a debt directly or indirectly to any person through any medium.


Federal Court Topics ËReaffirmation Agreements ËCross-Collateral Clauses ËLien “Stripping” Ë“Freezing” Accounts and Right to Offset ËCredit Reporting Requirements & the FCRA ËAdversary Proceedings ËCreditor Registration


Reaffirmation Agreements “There is no exception to the rule that every rule has an exception” –James Thurber

Ë The “60 Day Rule” in Rule 4008, Federal Rules of Bankruptcy Procedure, and why it is meaningless Ë Motions to Extend the Time Period Ë Motions to Reopen Chapter 7 Cases


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“Cross-Collateral” Clauses

Ë What are they? Ë What are they good for? --In a Chapter 7 case --In a Chapter 13 case Ë “Blowback”--Redemption (Chapter 7) and Surrender (Chapters 7 and 13)


Lien “Stripping” and Why it is NOT Sexy Ë What does it mean? Ë The “$1.00 of Equity Rule” (11 U.S.C. § 506) Ë Why are First Mortgages Exempt? (11 U.S.C. § 1322) Ë How is the value determined? Ë Choosing an appraiser


Administrative Holds a/k/a Account “Freezes” Ë What do we mean? Ë Can an account be frozen pre-petition? Ë Can an account be frozen post-petition? Citizens Bank of Maryland vs. David Strumpf, 116 Sup. Ct. 286 (1995)

Ë How much can the Credit Union hold? Ë Automatic Stay considerations and the right to offset


Bankrupt Accounts and the Fair Credit Reporting Act Ë Should debts that have been discharged in bankruptcy be reported with a balance still owed and state nothing regarding the bankruptcy, or should they show a zero balance and note that the debt was discharged in bankruptcy? Ë 11 U.S.C. 524(a)(2) provides, in relevant part: “A discharge in a case under this title ... operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the Debtor.” Ë Does reporting a balance owed to a credit reporting agency on a discharged debt violate the discharge injunction?


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Adversary Proceedings

Ë Remember: debts incurred via fraud are NOT Dischargeable Ë Presumptions or “Badges” of Fraud: Ë Debt incurred for luxury goods of more than $550 incurred within 90 days of bankruptcy Ë Cash advances totaling more than $825 incurred within 70 days of bankruptcy Ë Using your VISA to pay your bankruptcy attorney


National Creditor Registration Service Ë What is it? Ë Why have I never heard of it? Ë Where can I get information about it? Web: (https://ncrs.uscourts.gov/) Phone: (877) 837-3424 (Note: not 1-800) Ë Why is it important?


The $1,000,000 Repossession Question You repossess a car and then they filed bankruptcy later the very same day. Do you have to give the car back? In Florida, the answer is ___ Yes ___No ___ Maybe See In re: Kalter, 292 F. 3d 1350 (11th Circuit 2002). In Georgia, the answer is ___ Yes ___No ___ Maybe ___ I’m tired of listening to you, please stop talking See In re: Rozier, 376 F.3d 1323 (11th Circuit 2004).


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