About ten years ago, AK incurred a debt of about $6,500.00 to a Credit Union. He subsequently defaulted on the debt, and the Credit Union farmed the collection of the debt out to a collection agency (“Agency”).
Early last year, Agency contacted AK and offered to settle the debt for $3,500.00, a bit over 50% of the original debt. AK agreed, paid the money, and was provided a letter by Agency stating that the debt to the Credit Union had been paid “in full” and that Agency would remove all derogatories from AK’s credit record.
Unfortunately, this wasn’t the happy ending that AK had hoped for.
Several months later, a law firm (“Collection Lawyers”) employed by the Credit Union suddenly grabbed over $16,000.00 from AK’s bank account using a bank levy.
We found out later that what happened was that the Credit Union, not long after assigning collection of the debt to Agency, had also employed Collection Lawyers to file a lawsuit against AK without informing Agency. Collection Lawyers got a default judgment against AK, who never had any idea he was being sued. Over the years, they kept piling interest and attorney’s fees onto the judgment until it exceeded $16,000.00, which was when they grabbed AK’s bank account.
AK tried to resolve the problem on his own, explaining over and over to Collection Lawyers that he had already settled the debt with Agency in good faith, but it finally dawned on him that Collection Lawyers were just stalling and were never going to deal with him fairly.
That’s when he called the Fullman Firm.
We promptly filed a motion to recall and quash the Writ of Execution that the Collection Lawyers had used to do their bank levy, and restore AK’s $16,000.00+ to him. They put up a fight, of course, and we had to subpoena the head of Agency to testify that Agency was employed by Credit Union to collect and settle debts, and that they had been acting in good faith when they settled with AK (as they were unaware of the judgment obtained against AK).
The judge agreed with us that AK had settled the debt in good faith and from that point on Credit Union was barred from doing further collection on the debt, and he ordered Credit Union to return the over $16,000.00 that they had taken from AK’s bank account. Another win for the good guys!