Oklahoma Law on Debt Collection

Oklahoma Debt Law

This will eventually be an article on small claims courts in Oklahoma.

Small claims courts are a frequent bane to debt defendants because they apply loose rules (of evidence and civil procedure) designed for pro se, unsophisticated parties disputing small amounts of money. Debt collectors, however, have discovered that these lax rules can make it easier for them to get even more default judgments and to win cases on obviously insufficient evidence. Oklahoma put a stop to that by enacting rules that forbid debt collectors from bringing their claims in small claims courts.

Of course this hasn’t stopped them.

Here is the rule: http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=438809

Here’s an article. There will be more: https://www.okbar.org/freelegalinfo/smallclaims/

Jurisdictional Issues in Debt Law

Kicking the Debt Collectors out of Court

– Jurisdictional Issues in Debt Law



Kicking the Debt Collectors out of Court

– Jurisdictional Issues in Debt Law


We discussed two kinds of jurisdictional issues in a recent teleconference – two different issues that call for very different responses.

In this video we’ll discuss what happens when the debt collector doesn’t show its ownership of the debt and when you are not properly served with the lawsuit.

Ownership of the Debt

When debt buyers bring a lawsuit, their ownership of the debt is always in question. It won’t be their  name on the debt instrument or contract,  and they will have purchased the debt – gotten it on “assignment.”

There is nothing wrong with that, let me emphasize. Most debts are freely transferrable (unless either a contract or law says they can’t be transferred) – so in most cases this will not be an issue. But what is an issue is proof of ownership. Only the true owner of a debt is permitted to bring a lawsuit. In a way that’s a no-brainer, isn’t it? If I happen to hear that someone owes you money, I can’t sue them for it can I?
No – if I want to sue, I must prove that I am the “true party in interest.”

Without the true party in interest’s participation, the court  does not really have jurisdiction over the subject matter of the case. If I bring suit on a debt someone else owes you, and that person gets around to pointing out that I don’t own the debt,  the case should be dismissed immediately – without prejudice. If the person being sued does show that the plaintiff cannot prove ownership, the proper response by the court is to dismiss immediately without taking any other action – it can’t make a judgment about the validity of the debt without the real owner being present.

You can attack ownership of the debt at any time, and in a debt case you should always contest the issue not only because you might win, but also because  debt collectors actually try to collect debts that don’t belong to them fairly often. You should always make them prove it.

In the case of the big junk debt buyers, they often will have a so-called “bill of sale” between the original creditor and the junk debt buyer. It will say that the  creditor is selling and assigning umpteen million dollars worth of debts to the debt collector. It will mention an attachment with the numbers of the accounts sold.

And it will often not have that attachment or anything else linking your account to that sale. That is inadequate proof of ownership. It is no proof
of ownership. If you attack the case on that basis it should be dismissed – unless the debt collector can supply the information. For some reason,
they often cannot.

You can make this argument at any time.It isn’t waived by you participating in the case. Any time you can prove the debt ownership isn’t
established, the case should go away.

Sewer Service

Sewer service is different. In this situation, the process server threw the summons into the ditch while the defendant was watching and then swore to having given the summons to the defendant. In that situation, the defendant is forced into a choice: attack the court’s jurisdiction immediately by motion to quash, wait and attack jurisdiction, or defend. If you take actions to defend on the merits of the case – you say you don’t owe the money – you will likely be “waiving” or letting go your attack on the court’s jurisdiction.

Vehicle Repossession and Breach of Contract Lawsuit

Vehicle repossession is not “debt law” in the sense we mean it at our site.

If you’ve read many of our materials, you know that we consider debt law as good as it gets for self-representation. That is because debt buyers buy vast quantities of debt and essentially take a “factory” approach to bill collecting and lawsuits. You can expect pretty much every case brought by a debt buyer to follow a similar approach – the petitions are almost always virtually identical, and the whole process is usually shoddy. Typically, the debt collectors don’t have what they would need to win a contested fight – and they don’t want to get what they would need to win because they are designed to catch the 80 – 90% of the people who do not fight.

And debt cases are “document-intensive,” meaning that the debt collector’s whole case will usually depend on getting some documents into evidence.  There is very little testimony and no expert witnesses. So that means a pro se litigant can focus on a few simple evidentiary questions and not worry too much about arranging testimony or other trial tactics.

But our materials do not apply to vehicle repossessions and the surrounding issues. Those cases present a different set of issues and opportunities.

What is a “Vehicle Repossession?”

When you buy a car on credit, you will typically sign a contract agreeing to pay a certain amount per month (plus a variety of other terms, obviously). And these contracts and their terms are, in general, a terrible, terrible deal for the customer. One of these terms is a lien and right to repossession, and there is a whole body of somewhat specialized law on all of the repossession process.

If you fail to make payments, the company may have installed tracking and disabling devices in the car – so the car may stop working. And then the repo guys come and get the car. And then the REAL scam begins.

When dealers repossess a vehicle, they are not “collecting a debt.” They are, in legalistic terms, exercising their liens and cutting off your right to a security. It looks like a collection, and it is one, but the law of most jurisdictions does not see it that way.

Still, the idea is for them to get their money back, and what they plan to do is sell the vehicle at an auction.Early in the process, then – before they get your car – you can talk to them and negotiate terms more effectively than later.

Once they get your car, they will want to sell it. If they do this in a “commercially reasonable” way, you will be on the hook for whatever amount of your car note remains. And inevitably, this is a shocking amount. For various reasons (some good and some bad) the courts are extremely lenient as to what constitutes “commercially reasonable.”

But the fact is that the dealers get almost nothing for the cars they repo. They sell them to each other, at auction, so this is one of the all-time scams – and the courts wink at it. In any event, repossession law focuses extensively on this question of “commercially reasonable” and on certain notice provisions. State laws in this area are complex for most people, and the court decisions are not easy to understand.

And the car dealerships have stacked the deck in most cases. Their lawyers specialize in this law, know the facts of the cases they bring (much more than debt collectors, anyway), and will almost always have the contract you signed. They’ll have people who can swear to them, too, because most car dealerships are built around the repossession process.

This doesn’t mean you don’t have a chance to win. It just means that this isn’t the best kind of law to go pro se. Fortunately, if you are broke, most of the legal service organizations that help people without money are good at this. It’s a problem a lot of people with money problems have. We suggest you find one of these places – many law schools have clinics that do this, too – and see if you can get help.

If you can’t do that, it still makes sense to fight, and on a simple dollar basis, joining us to help you do that will probably be worth your money. Your chances of winning aren’t great, but they do use a factory approach, and some of our tools will apply to that. And by fighting you can reduce some of the damage they will do to you.

Repossession and Suit to Collect the Difference Happen Fast

Unfortunately, vehicle repossession cases can happen very quickly. Our advice is to make every effort to find help. Filing an answer by yourself could very well hurt your case. If you must do it by yourself, our membership can give you SOME help – and in that case you simply must join and talk to us before answering the suit. Trying to represent yourself without any help is just not a good idea.

Our Case Evaluation Service

One of the services we provide to members and non-members alike is a “case evaluation.” It’s a great deal for people being sued by debt collectors who would like some guidance about their case. We do not recommend this service for people facing vehicle repossession, though. If you send us one, we will have to spend the time to figure things out (so we will keep your money for the time we must spend) – and then we’ll almost certainly give you pretty much what we say here. Save your money and your time and look for a lawyer who can handle this case for you.

Exemptions from Collections

State Law Exemptions from Collection

Try This If You Are Garnished

Collection is an extremely unpleasant thing, and you will want to avoid it if possible. That means not allowing anybody to get a judgment against you.

We don’t include this information here to help you avoid collection, however. This information should help you understand the legal status of your assets for purposes of your negotiation planning. Remember: you should think long and hard about giving a debt collector any protected assets (which all of these exemptions are), but that does not mean you should never do so. These exemptions are the exemptions provided under Missouri law (paraphrased – look up the law for exact statutory language), but different states have very different rules on some of these exemptions (most notably on homesteads). For an exact  understanding of all the exemptions under your state’s laws, we suggest you google the term “exemptions from levy” plus your state’s name.

There are specific procedures you would follow in order to claim these exemptions if a levy (garnishment) occurred, but again, we include this information simply as a guide to understanding the legal character of your assets.

513.430 RSMo. 2010 et seq. provides the following exemptions:

1.         Household furnishings and goods, clothes, appliances, books… held primarily for personal, family or household use of the debtor or a dependent, not to exceed $3,000 total.

2.         A wedding ring worth not more than $1,500, plus other personal jewelry worth no more than $500 total.

3.         Any property, of any kind, not to exceed $600 in value in total.

4.         Implements, professional books or tools of the trade of the debtor or a dependent worth not more than $3,000.

5.         Any motor vehicle worth not more than $3,000.

6.         Any mobile home used as the principle residence but not on or attached to property owned by the debtor, worth no more than $5,000.

7.         Any unmatured life insurance contracts.

8.         Amount of any unaccrued dividend or interest under, or loan value of, any one or more unmatured life insurance contracts.

9.         Professionally prescribed health aids for debtor or dependents.

10.       Right to receive social benefit, unemployment compensation, or a local public assistance benefit, veteran’s benefits, disability, illness or unemployment benefits, or a stock bonus plan (etc.).

11.       Right to receive money or property traceable to a payment on account of the wrongful death of an individual on whom the debtor was dependent (with some limitations).

12.       A homestead consisting of a house and appurtenances and land worth not more than $15,000.

Why You Can Probably Beat the Debt Collectors

(Even If You Couldn’t Win the Lawsuit!)

If you will stand up for yourself, you can probably make the debt collectors go away even if they could win the suit against you. (Which they usually can’t.)


Follow the Money

It’s all about money, right? They want to make money. That’s why they’re suing you. If you will defend yourself it becomes too expensive for the company to pursue the litigation against you.

Let’s Do the Math

Consider the question from the point of view of the debt collectors. They buy debt cheaply (very, very cheaply), file sut in large numbers, and win the vast majority of cases without a fight. In St. Louis County, the “call dockets” often have 300-600 defendants, most of whom are being sued by a handful of debt collectors represented by two or three lawyers. If it takes an hour or two for the lawyers to get one hundred judgments totaling (by my guess) approximately $400,000 to $1,000,000 dollars, that’s a pretty good hour’s work.

Now look at the Petition in your lawsuit, down at the last paragraph near the end (where it says “wherefore, plaintiff prays…”). If the company is asking for attorney’s fees against you at all, they’ll usually say so right in the “wherefore clause,” and you may be surprised at how small the number is. In Missouri, the number is typically 15% of what they’re suing you for. If the company is suing you for $5,000, the attorney’s fees might be around $750, but that’s only if they are suing on a contract that allows attorney’s fees. In fact there is often no request for attorney fees at all in the suit.

They ask for the same amount whether or not you fight.

If you don’t fight the case, they get a windfall. If you do fight the case, they usually don’t get any more money even if they win. Instead of hoping for several hundred thousand dollars per hour of work, they’re trying to get $150 per hour-if that. That’s a lot less fun.

And if they are not suing you on a contract that specifically provides for attorney’s fees, they don’t get any fees for fighting no matter how long it takes. Every second you make them spend fighting with you costs them money that they will not get back. Everybody on the other side knows all this, and they never forget it. Neither should you.

What Would You Do…

What would you do if you were a debt collector who was bogged down in a suit for a few hundred (or even thousand) dollars-but which could cost just as much in attorneys fees. And on the other hand you could make a hundred thousand dollars in an hour of work by picking out other people to sue instead? Debt collectors are practical people. If you stand up for yourself in a way that shows them they will have a real fight on their hands, they will usually drop the suit. It isn’t worth it with so many other people around who will not fight.

Isn’t that what you would do?

Requiring Verification – Your Secret Weapon against Debt Collectors

When you get the first notice that a debt collector is after you, you should get an opportunity to “dispute and request verification.” That right is provided by the Fair Debt Collection Practices Act (FDCPA). Click here to get your free copy of the FDCPA. This video here explains why you should dispute the debt and require the debt collector to verify it. In other words, always seek verification  And this video shows you how to do it, and how it affects some of your other rights, because often a debt collector will either disappear completely once you seek verification or will fail to provide verification but still harass you – a violation of the FDCPA.

But remember this does not work if they file suit against you – if you don’t answer a lawsuit when it is filed, you will lose the case. See Bogus Right to Verification on Petition – Dirty Trick! If you have already sought verification but not received it, you might file a motion to dismiss based on their failure to verify.

Here’s what to do if they fail to verify the debt before suing you.

When debt collectors contact you for the first time, they are supposed to send you a written notice of your right to dispute and require them to verify the debt. They are to inform you that you have 30 days to send in this dispute, and if you do so, they are supposed to “verify” the debt prior to taking any further collection actions.

Now, to be clear, we do not think the “verification” to which you have a right under the FDCPA amounts to much, but we do, in fact, recommend making sweeping demands of the debt collector. At a minimum, you may get some materials that will be useful if they decide to sue you. And there’s a pretty good chance that disputing the debt will cause them to go away and leave you alone. I have never had a satisfactory explanation for why this might be, but it appears to be the case. Therefore it makes sense to demand verification when you first hear from a debt collector.


This right to verification does not extend to law suits. If they serve you with a lawsuit, you must answer the petition or lose the case. You HAVE NO RIGHT TO VERIFICATION ONCE THEY FILE SUIT. But if they have contacted you, and you have demanded verification before they filed suit, then they should verify before filing suit. Failure to do so violates the FDCPA.

Also note two other things: your dispute should be in writing – they don’t have to verify if it isn’t. And while you have only thirty days to make the dispute, they can take any amount of time in providing that verification – it’s just that they cannot make other attempts to collect the debt until they do.

Repossession in the Real World

This article “pulls back the veil” and lets the average consumer take a look at what goes on in repossession. This should help you decide what to do if you’re struggling with car payments and wondering what repossession might do to you.

Repossession of cars and trucks, like making sausages and politics, undoubtedly has its benefits, but the actual process can be extremely unjust and disturbing to watch. This article is going to pull back the veil and let the average consumer take a look at what goes on in repossession. This article should help you decide what foreclosure could do to you if you’re struggling with car payments and wondering what actions to take.

Deal Gone Wrong

It is well-known that, when you buy a new car it depreciates substantially as soon as you drive it off the lot. In plain English, that means the car is worth much less money right after you buy it than before you own it. Depending on the size of your down payment, then, you could very well be, and most often probably are, “under water” on the loan-the car is worth less than you owe. For this reason, I prefer to buy used cars, myself, but if you don’t, and you buy well, things will eventually straighten themselves out. Provided you can continue to make the payments, the car will lose value more slowly than the note does. But what if something comes up and you can’t make the payments? That’s when you’re in for a rude surprise.

After missing a payment, you will find the auto dealership has become very interested in you. They will call and write. And they’ll keep calling and writing until your payments are current. If you can’t pay, the dealership will eventually suggest you return your car-or the idea might occur to you. If you don’t return the car, the dealership may send out “repo men” to repossess the car. You may go to your accustomed parking place only to find the car gone. They won’t leave a note, either.

But not too long later, you will probably get notice that your car is to be sold “at public auction” within a certain amount of time. They may tell you about a “right to redeem,” which at least in some states is your right to make good on the payments and get the car back. Let’s assume for the present example that you can’t do that. Let’s say (to keep the numbers simple) that the purchase price of the car was $15,000, and you made a down-payment plus other payments of $5,000. The car is two years old now, and its “blue book value” is down to $8,000. So you figure that after the company sells the car, you’ll owe about $2,000, right?

Repossession in the Real World

Wrong! A month later, you’ll find out that the car was sold for $2500. They charged you $250 for the “repossession fee” and another $250 for “reconditioning.” So they “credited” your account with $2,000 against the $10,000 you owed, and now they want another $8,000 from you. They send you a letter outlining everything they’ve done. You had a camera worth $200 in the glove compartment, and you ask about that. They tell you it’s “lost.”

That’s repossession in the real world.

Outsmart Dirty Debt Collectors – Make them Pay

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Should I talk to a Debt Collector and What Should I Say

If you are being called or harassed by a debt collector, one of the purposes of that debt collector is to get you to talk. Should you? This is going to depend on whether you have anything to say.

Debt Collectors Target Struggling People

As I have mentioned before, the debt collection business is targeted at distressed people. The debt collectors already know you don’t have much money, and they know you probably have other people trying to get money from you. Their job is not to force you to pay somebody—it’s to force you to pay them. Another way to put that is that they are not competing with you—they’re competing with other debt collectors. You are the football in a game between the debt collectors, the string in a game of tug of war. Does that make sense?

Silence Can Be Golden when Dealing with Collections

The job of the debt collector is to get you to pay them instead of someone else. They can do this either by annoying you so much that you pay them to get them off the phone or by establishing a sympathetic connection to you so you gladly do it for the voice on the other end of the line. Both of these methods involve keeping you on the phone and the connection open, and neither of these methods is directed at your well-being. Also, if they can get you to reveal information about your job or bank, or any kind of assets you have, they can improve their chances of making you pay against your will. So unless you have your own purpose for communicating, you shouldn’t do it.

Sometimes it Makes Sense to Talk to Collectors

What might be a good reason for you to communicate? Well, because you want something tangible from the debt collector to whom you are speaking. You could want them to reduce interest rates, waive penalties, agree not to give information on your debt to the credit reporting agencies, or any number of actual, materially beneficial things. If you’re hoping to get a friendly voice or understanding, a debt collector is the wrong person to talk to: they already understand everything they want to know about your situation. Talk to someone else for that.

Negotiate—And Get It in Writing

Don’t be afraid to negotiate. You can ask for anything from them, and in most cases the debt collector could give you anything you might request. So be bold. If you want to settle for ten cents on the dollar, you can ask. They may laugh—but laughter is just a part of the negotiation and doesn’t mean they won’t do it. And if they agree to do anything, you must get the agreement in writing. In a practical sense, it doesn’t count if you don’t get it in writing. You won’t be able to prove it, and in some cases an oral “modification” would not even be legally recognizable even if you could prove it. It must be in writing.

They’ll want something in return. An immediate payment, an agreement to pay by a certain date, something. You can agree to this if you can do it, but you’re spinning your wheels if you cannot, so it makes sense to limit your promises to things you’re sure you can perform. Don’t over-commit, as this may negate the agreement you reach and will almost certainly increase the number and hostility of the phone calls you are receiving. Remember that the debt collector is keeping records of everything you say (so don’t tell them where you work or bank).

Stop Talking to Collectors When You’ve Said What You Need to Say

And when you run out of reasons to keep talking to the debt collector, make sure that you actually stop talking to them. There is always a price for anything you say – you’re giving them free information that they will use to decide to sue you. Sometimes talking to them is worth that price, but if that changes, you should feel no obligation to keep talking.

What about Partial Payments?

We think partial payments are bad unless you know exactly how you will pay the whole debt and unless you understand what making the payment will do to you. To read more on this issue – and you really should if you’re even thinking about making a partial payment, click here: Never Make Partial Payments.