DEBT TRANSACTIONS: BAUER
Part 1 – Collection Remedies
Right to Cure
i. Under I.C. §537.5109 A default occurs when you fail to make a payment within 10 days of the time required by agreement or if there is a failure to observe any other covenant of the transaction which materially impairs the condition, value or protection of the creditor’s rights in any collateral securing the transaction, or materially impairs the consumer’s prospects to pay. The duty of establishing material impairment is on the creditor.
ii. Under I.C. §537.5110 theCreditor must give the consumer a written notice of default and give the consumer the chance to cure, if the consumer has that right.
iii. Under I.C. §537.5110 the notice must:
1. Be in writing
2. Info on creditor
3. Identify the credit transaction
4. Identify right to cure
5. Have a statement of the default
6. A statement of the total payment necessary to cure the default
7. Date by which the amount must be paid
8. See form in statute book
i. Steps to take in order to get a default judgment in a case where the creditor has filed a petition and the debtor has failed to respond.
1. Creditor must give notice to debtor at debtors last known address. The notice must be in writing and must be certified. This is known as the second warning requirement. IRCP 1.972.
2. Then creditor has to wait 10 days. IRCP 1.972. And complete the application for the default. IRCP 1.972.
3. Then creditor has to go see the clerk and have him enter the judgment. For uncertain judgments you might need the judge to enter the judgments. IRCP 1.973.
4. Creditor must also check to see if the debtor is participating in military service. If so, creditor must follow procedures laid out in 50 U.S.C. App. § 521.
5. Creditor must also file an “Affidavit of Identity.” IRCP 1.962 – This includes name, occupation, and residence the judgment debtor.
6. If it involves a “consumer credit transaction” the complaint has to be verified. I.C. § 537.5114.
i. When can the creditor get attorney’s fees? I.C. § 625.22
1. When the contract says the creditor gets attorney’s fees.
2. If the action was to recover payment on a dishonored check or draft.
3. If Debtor is successful and the action was frivolous, he too can receive attorney’s fees.
ii. Limitations on Attorney’s fees
1. If paid before the return day the amt will be ½ of the sum above provided. But if paid after the return day, but before judgment ¾ of the sum. But no fee shall be allowed if an action has not commenced. I.C. § 625.23
iii. Requirement of Affidavit
1. Attorney has to file an affidavit stating that there is not an agreement between him and the client for sharing of the fee. I.C. § 625.24
iv. When can’t you get attorney’s fees?
1. Where there is a consumer credit transaction. I.C. § 537.2507
a. A consumer credit transaction occurs when:
i. There is a consumer credit sale or consumer loan, or a refinancing or consolidation thereof, or a consumer lease, or a consumer rental purchase agreement. I.C. § 537.1301.
1. A consumer sale is when there is a sale of goods, services, or an interest in land in which all of the following are applicable:
a. Credit is granted either pursuant to a
iately prior to the date of the judgment plus two percent. I.C. § 668.13.
v. How will interest be calculated and computed (Federal)?
1. Interest calculated form date of entry of judgment. 28 U.S.C. § 1961
2. Interest allowed on all final judgments against the US at the rate provided in subsection. 28 U.S.C. § 1961
3. Such interest shall be calculated from the date of the entry of the judgment, at a rate l to the weekly average 1-year constant maturity treasury yield, for the calendar week preceding the date of judgment. 28 U.S.C. § 1961
vi. Brenton National Bank v. Ross
1. An award of prejudgment interest is inappropriate where there is a genuine dispute as to the amount of damage throughout the trial, unless there is a statute that says otherwise. In Iowa the statute says 5%. I.C. § 535.2(1)(b) (money after the same becomes due)
i. Full Faith and Credit
1. Full faith and credit shall be given in each State to the judicial proceedings of every other State. U.S. Const., Art. IV, § 1.
Acts of a legislature of a state shall be authenticated by affixing the seal of such state. The records and judicial proceeding of any court shall be proved in other courts with in the US by the attestation of the clerk and seal of the court together with a certificate of a judge of the court that the said