What legal services does AAUD provide its clients?
AAUD provides a legal service whereby a client is represented by an attorney for the purpose of notifying his/her creditors that he/she is judgment proof because their income cannot be garnished under federal law and if their property is free of foreclosure because of the state homestead exemptions and suggests that the creditor/collection agency forbear collection activities.
Can I still use my credit cards?
As a matter of good faith, you should not use your credit cards. It is not advisable to incur more debt while you are unemployed. Also, you should note that after several months of non-payment, most non-secured creditors may close your account.
How soon can you contact my creditor?
Once the client has submitted an application with the appropriate processing fee and the required paperwork is completed, the creditors/collection agencies are notified within 20 business days of the client’s representation by AAUD. This notification shields the client against harassment by creditors and collection agencies. Until then, clients should be recording any/all creditors calls. They can notify creditors that they are in the process of hiring an attorney.
Will I continue to get phone calls and collection letters from my creditors?
Most creditors/collection agencies will stop collection activity once they receive a letter from AAUD. If the client continues to receive phone calls or letters, the client must contact AAUD and provide telephone/fax numbers of the calling party. AAUD will then make sure that the phone calls and/or letters are stopped by sending warning letters which discuss the laws against harassment. If the client continues to receive collection letters, the clients should send them to AAUD for appropriate handling. The client should be free of all harassment within a relatively short period of time.
Will the AAUD program affect my credit report?
Whenever debtors stop paying their debts creditors report that to the credit bureaus, regardless of whether or not a debtor is participating in the AAUD program. Thus, participating in the AAUD program will have an effect on the client’s credit rating. Although the AAUD program is not a bankruptcy, failure to pay debts does significantly affect a person’s credit rating. Therefore, clients will need to rely on bank debit cards, checks, money orders, etc. for paying new debts incurred after joining the AAUD program.
Should I tell my creditors about my enrollment in the AAUD program?
No. All contacts with creditors should be left to the AAUD attorneys and staff. Creditors/collection agencies should not be calling clients; therefore, clients should not be in contact with the creditors/collection agencies which are under the AAUD program.
How much does the AAUD program cost?
To enter the AAUD program, the client is required to pay a $200.00 processing fee and $20 per month for continuing representation by the lawyers of AAUD. In other words, the AAUD clients are hiring a lawyer for $20.00 per month to represent and advise them about their debtor rights; protect them against harassment; and, if necessary, advise the client how to enforce debtor’s rights in the courts. AAUD lawyers will not represent clients in court, but if a client is sued, AAUD will notify the creditor/collection agency or its lawyers that the client is receiving no wages and all income is limited to unemployment benefits or worker’s compensation and are, therefore, exempt from garnishment. If a creditor/collection agency does obtain a default judgment against the client, we will help you with respect to the enforceability of that judgment.
How will I pay my monthly retainer payment?
On or about the fifth of each month, an automatic withdrawal in the amount of $20 from the client’s checking will be made to cover the monthly retainer fee.
Will I be given a contract which spells out the terms and conditions of my AAUD representation?
Yes. Each AAUD client is required to sign a Lawyer/Client Agreement which fully discloses the lawyer/client relationship between the debtor and the AAUD lawyers.