Preserving 'Retention of Title' Rights Over Products Sold On Credit

Many businesses supply goods on credit subject to 'retention of title' provisions in their sales agreements. This article discusses the effect of the Personal Property Securities Act 2009 registration system (effective 30 January 2012) on the enforceability of such provisions.

What is a 'retention of title' provision?

In normal circumstances, title (more commonly referred to as ownership) in relation to goods sold passes to the buyer immediately. A typical transaction might take place in a shop, involving the exchange of money for a product, with the buyer becoming the owner of that product when the money has been given to the shop assistant.

Even if payment is not made immediately, contract law says that in most circumstances the buyer becomes the owner of a product when the agreement for sale is made. From the seller's perspective, ownership of the product is replaced by a debt owed to the seller by the buyer.

However, an agreement for sale can include a provision whereby the seller retains ownership until the agreed price for the product has been paid in full.

Are 'retention of title' provisions still effective?

Prior to 30 January 2012, such provisions were generally effective against other creditors of the buyer, subject to the agreement being proved... ie, subject to the seller having evidence of the arrangement. It is important to note that such provisions were not generally effective against a subsequent purchaser in good faith, such as where the initial buyer fraudulently on-sold the product to an innocent third party.

Now, from 30 January 2012, retention of title provisions can also be defeated by another creditor of the buyer, where that creditor registers their interest on the Personal Property Securities Register (the PPSR).

For example, you may sell a product on the basis that you retain title until payment has been made in full. The buyer takes possession of the product and takes it to their office. The next day the buyer enters into a credit agreement with a finance company, giving that company security over all of the assets of the buyer's business. The finance company registers a financing statement on the PPSR. A few weeks later the buyer's business goes into liquidation. According to the PPSR and the Act, the finance company is entitled to priority in relation to the product, and may therefore have possession of it... your 'retention of title' provision becomes worthless.

If you had registered your own interest in the product on the PPSR (within 15 days of the sale) that would have 'perfected' your security interest. The finance company's interest would then have been secondary to yours, and upon the buyer going into liquidation you would most likely have been able to recover your product from the liquidator.

What is a financing statement?

This is a standard form document described in section 153(1) of the Personal Property Securities Act 2009, that includes the following information:

- Details of the secured party (eg, the seller)

- Details of the grantor (eg, the buyer)

- The secured party's address for notices, and any relevant 'identifier'

- Description of the collateral (eg, the product supplied) and proceeds

- The date when the registration ends

- Indication of subordination... where some other interest has priority

- Whether the secured party's interest is a 'purchase money security interest'

- Other details prescribed in the Personal Property Securities Regulations 2010

What about products sold subject to 'retention of title' before 30 January 2012?

Section 322 of the Act provides that a security interest arising from a 'transitional security agreement' - eg, an agreement which was in force before 30 January 2012 in relation to collateral - is perfected without registration for up to 24 months.

However, as a transitional security interest is not recorded on the PPSR, it will not show up in a search of the PPSR. This raises the possibility of a liquidator selling or disposing of secured property because he or she is unaware of a relevant security interest. Recoverability of that property will then depend on whether the transitional security agreement complies with the Act's requirements in relation to signature/acceptance of the agreement and description of the collateral. The right to recover some items, such as inventory, may be lost once those items have been sold or disposed of by a liquidator.

Although this new regime addresses many shortcomings of the previous state laws, failure to perfect title by registration on the PPSR may now have disastrous consequences for a seller or lender. In particular, professional advice should be sought where it is intended to rely on the transitional arrangements in relation to significant transactions.

Stephen Bourne is a lawyer in Australia (see profile ), and also contributes articles and case summaries to the Ekupu Law Library website. Stephen has law and business qualifications, and is a Fellow of the Australian and New Zealand Institute of Insurance and Finance.

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Collections On My Credit Report

I recently discovered collections on my credit report for a medical bill for a service that I received earlier in the year. I remember getting the medical service, but I was led to believe my insurance would cover it. I never even received a bill, and now this is a red mark my credit...what do I do now, and how concerned do I need to be?

What I would advise you to do is first, call the collector that is listed on the credit report, have a pen and paper handy as you want to make sure you are taking good notes.

· The credit report should have the contact information for any creditor reporting on your credit report. If not, a simple Internet search of the name of the company reporting on your credit file will lead you to them. Call them and find out about it; they will be more than willing to tell you what it is for and what you owe. Get a copy of the bill from them, and if it is owed, promptly pay it.

It is extremely important that you let the collector know that you never received a bill in the first place, for the services rendered.

· Collectors take notes of most of the phone calls received, so you want to get that comment into the notes if you can. Clearly explain that you are disputing the collection on your credit report, because you would have paid the bill if you had received one before it went to collections. When talking with the collector ask them when the bills were sent out.

Next, dispute the item on your credit report, make sure your dispute is clear and includes the following very important points:

· You never ever received a bill or a notification of any kind that any money was still owed for the services rendered.

· Upon receiving a notice of the outstanding bill, you will need to promptly paid it.

· You are disputing having a collection appear on your report as you were never given the chance to pay the bill in a timely manner.

The credit reporting agencies will conduct an investigation and respond to you with the results of their investigation within 30 days*.

*If your credit report is not cleared up, you have rights, and you should contact an attorney, so as they can help you clear up your report.

Larry P. Smith is a Chicago based attorney who owns Larry P. Smith & Associates; Protecting Consumer Rights. For over twelve years the attorneys at Smith & Associates have handled various consumer rights matters including fraudulent transactions, debt collector, harassment protection, credit report inaccuracy problems, and lemon law cases for automobiles and consumer products. if you feel your rights have been violated or you have a Lemon Law claim, please contact us for a free confidential case review, and let our attorneys help you understand your consumer rights. (888) 822-1777. To learn more about our services follow us at "http://www.linkedin.com/company/larry-p-smith-&-associates-ltd-"

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CFPB Publishes Sample Credit Card Agreement for Dodd-Frank Act Compliance

The Consumer Financial Protection Bureau (CFPB), the watchdog agency newly created by the Dodd-Frank Act, has issued a proposed new credit card agreement form that strips out much of the legalese used in current credit card agreements. At this point, the new form is not mandatory nor is it a model form, merely a suggested prototype.

The CFPB is currently testing the prototype with the more than one million member customers (including 350,000 cardholders) of the Pentagon Federal Credit Union, and plans to work with other card issuers who are interested in making simplified credit card agreements more prevalent in the industry.

The new credit card agreement form, published on the CFPB's official website, is designed to help consumers who might not understand legalese to better understand what they are agreeing to when signing up for a new credit card. The prototype form contains several key changes from current boilerplate credit card agreement forms:

Begins by explaining the various charges and interest rates in clear termsSeparates legalese into a standardized definitions section based on current industry standardsUtilizes "FAQ"-style sections and tables and provide for easier readability and visual aids

The CFPB's anticipates that these agreements would be posted on a credit card issuer's website to allow for interactive reading by users. Users could click on any portion of the agreement to receive additional consumer information about particular sections such as disputes, charges, or interest rates. Users could also click on the separate definitions section if they wished to read the contract definition of any particular term. Of course, the agreement would also be available in printed form for users without internet access.

The CFPB is interested in knowing what you think about this new form. Click here to view it, interact with it, and comment on it directly to the CFPB.

Other Information:

The CFPB is a powerful new watchdog agency created by the Dodd-Frank Act, and tasked with regulating the offering and provision of consumer financial products or services under the Federal consumer financial laws. The CFPB is designed to have the duties and authority to regulate and enforce a variety of financial consumer protection laws, including:

Independent examination and enforcement of financial consumer protection lawsConsolidated enforcement of a variety of consumer protection laws previously enforced by other agenciesCooperation and communication with other financial regulatory agencies to enhance consumer protection and rule enforcement

For more information on the CFPB or other regulatory agencies affected by the Dodd-Frank Act, click here or visit http://doddfranksummary.com/.

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Answering a Credit Card Lawsuit in the Right Manner

Has your credit card company sued you? You would be surprised to know that in the past few years, many credit card companies have initiated lawsuits against the debtors in order to benefit from the default judgment. They also try to attach liens to the defaulter's property and collect debt by finding legal loopholes. In such a scenario, it is important for you to know exactly how to go about answering a credit card lawsuit in the best manner so that you can win the case with ease. If you think that you need not answer a summons, then you're wrong and not responding would be a big mistake. You can be charged with a bench warrant or a writ of attachment and arrested for not answering the court. You automatically lose your case by default.

Most of the times debtors are aware of all the possible reasons for a summons like non-payment of debt. Not being able to repay the debts over time can drag you to the court. Thus while you are preparing how to answer a summons, you must be ready with all the possible questions. It would be wise to understand that the credit card companies, which have lent you money, are unsecured lenders who are always skeptical about the money that they have given to you. By answering a credit card lawsuit in a smart manner you save yourself from future trouble. Many companies also offer permanent relief to their customers by settling the case out of the court. Your two options are to either have a lawyer or defend the lawsuit yourself, but if you ignore or fail to respond you automatically lose by default judgment.

Answering your credit card lawsuit is very important. You need to have all the documents which could prove your credit history in court. Answering a summons in the right way to the collection agency or credit card company would clearly indicate that you are not going to back down easily. Winning each and every case is difficult yet possible. Providing the court with the right documents to prove your innocence in the case can help you win the case. In fact, the court drops all kinds of charges against you, and also orders the credit card company to pay the expenses of the court case. Fortunately, there are a few defendants' packages available in market which can be used for answering a summons, filing notice to appear, discovery samples, sending discovery off to the Plaintiff and many more.

The Defendant's Package can make answering a credit card lawsuit a cakewalk by providing knowledge about all the ways in which you can prove your innocence to the judge. In case you are not prepared, immediately file for a motion for extension of time and prepare for the case by using all the information and examples provided in The Defendant's Package. The package has full information about how to answer the complaint and get prepared to face the jury with confidence.

D Wiley is the author of this article on How to answer a summons.

Find more information on Winning a credit card lawsuit here.

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Tax Lawyer: The Way To Develop Your Credit Score

I've had an interesting conversation with my tax lawyer yesterday and I've really enjoyed it because I've uncovered a lot through the one hour interaction. Anyway recently, I told him that I had several problems with my credit score so he provided me with guidelines on how to improve it.

1. Acquire a copy of your credit history

You should get a copy of the exact copy of your credit rating to find out exactly what you must carry out to develop it, remember when it comes to working with figures assumptions are not an option. From a credit report you can see your accounts, which one you will have to do a bit of work on and which ones are great.

Note: Some reports are available online

2. Contest a credit report mistake

Currently, the majority of tax lawyers may advise you to file disputes if you realize that there are mistakes on your credit history. You have a distinct right to request that these errors be removed from your records; this can be done by mailing a message to your bureau. Mistakes may have a huge impact on your credit score, more than you would imagine. Inappropriate information, like overdue filing, can bring down your score anywhere from 60 to 110 points.

3. Prevent new credit card acquisitions

As outlined by my tax lawyer if you constantly buy brand new items with your credit card then you'll lift your credit card consumption to an all time high. It can impact the percentage between your purchases and as well as your highest limit. So, the greater your balance is the more damaging effect it will have in your credit rating. Better yet, if it's not absolutely necessary then stay away from buying anything at all.

4. Settle a past due balance

My tax lawyer informs me that the payment history makes up 35% of your actual credit rating. So the more delayed you are on your payments the greater effect it will have in your credit scores. If you have available funds then he says that you can pay your existing balance. Even the majority of tax lawyers can agree to talk to the collection agencies and obtain a contract so as to change the date so you will appear to have an on time payment.

5. Avoid a new credit card application
When we're on the subject of fixing credit cards, we must truly avoid making extra credit card applications because this will even impair your credit scores, for obvious reasons, but also because it can even reduce your credit age.

6. Leave accounts open, particularly those with balances There are a few instances especially when you have huge balances where in you may be lured to close an account that has an outstanding balance but before you do anything harsh always verify and make absolutely certain that it will have no negative effect on your score. But note this down: There are only a number of situations where in closing an account can lead to a beneficial effect.

My tax lawyer tells me that there are still certain things that can be done to increase your rating, all you have to do is perform a bit of investigation.

Our law office specializes in helping clients with many tax issues. Our Toronto tax attorneys have many years of experience in dealing with all matters relating to the GST & HST. If you're looking for the best tax attorney, contact one of our attorneys.

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Why Credit Card Debt Buyers Can Never Win - Should Never, That Is

Any idea why debt buyers should never win a credit card lawsuit?

Answer: The Hearsay Evidence Rule.

The Hearsay Evidence Rule prohibits the admission into evidence of statements - oral or written - made by an out-of-court witness and offered to prove the truth of the matter asserted. [Hint: Start thinking about monthly credit card statements.

A digression first: For those who are new to credit card lawsuits, debt buyers are companies, often quite large, which are in the business of purchasing defaulted credit card debt and collecting for their own account. They don't pay a lot for the debt, and they can be pretty aggressive collectors. Debt buyers make BIG money, but they don't have to make it from YOU. Why? Because of the Hearsay Evidence Rule. To see how this works in your favor, let me ask a simple question: How does a debt buyer know how much to sue you for?

Answer: Somebody else tells them. [Somebody who won't be in court to testify]

Specifically, that somebody is whichever bank sold them the debt. The bank tells the debt buyer how much debt their pennies have bought, and that is ALL a debt buyer knows. They may also get the last monthly credit card statement which also reflects this amount.

Flash forward to the trial. To prevail, the debt buyer must prove damages. Damages is an essential element of every claim. The debt buyer's damages is the amount of the debt they allegedly purchased and have been unable to collect - even though they only paid pennies on the dollar. To prove damages, they will offer into evidence that last monthly credit card statement showing the amount you owe.

And when they do, you do exactly what?

OBJECTION, your honor. Hearsay.

You do this because you now understand that a credit card billing statement is nothing other than a [written]statement made by an out of court witness, offered to prove the truth of the matter asserted - that you owe X dollars. As such, the monthly statements are pure hearsay, inadmissible as evidence to prove the amount owe....or more precisely, to prove Plaintiff's damages. NO damages, no case. You win. Unless, that is....

...they produce a witness from the selling bank who testifies that the monthly statements are, in fact, authentic documents stating the correct amount owed. Which leads us to one final question...:

What are the chances that an original creditor will send an employee - say, from Delaware [Chase] or Virginia [Capital One] - all the way across the country to hang around court all day to testify in a case in which the bank has NO interest WHATSOEVER?

Not happening. I haven't seen it, and don't expect to. So the statements are out. And the amount of Plaintiff's damages is unproven. Like we said, No damages, no case. Judgment for the defense.

Actually, it's not quite that easy. So, you might want to line up some legal help. Why? Because judges will allow hearsay statements into evidence unless proper and timely objections are made. And SOME judges will allow it anyway.

William Rose is a Santa Monica Attorney representing consumers exclusively throughout the State of California in credit card related matters, including defending consumers in credit card law suits, negotiating reductions of their credit card debt and enforcing their rights under both the Federal and California Fair Debt Collection Practices Acts. To learn more about Bill Rose and his work, visit http://www.californiaconsumeradvocate.com/ or call toll free at 1-877-551-0210

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Bankruptcy Attorney Versus Credit Counselor

Whether you choose to hire a bankruptcy attorney or a credit counselor, either one can help you in times of financial distress. Without a doubt, todays global financial crisis has inflicted much strain on individuals experiencing financial trouble. Many have found themselves going through legal proceedings without the proper knowledge of what they are actually facing. You must understand that bankruptcy and credit counseling work very differently and it is important to be acquainted with both before choosing a financial solution.

Credit Counseling

Basically, credit counselors work for credit counseling firms or companies who seek to negotiate and deal with your creditors. If you are in need of professional help as to how you can pay off your outstanding debts, you can seek the help of a credit counselor. This professional gives you essential pointers as to how you can manage your debts and finances efficiently and accordingly. A credit counselor can create a payment scheme based on your financial status and propose the plan to your creditors. The counselor can even negotiate with the creditors on your behalf about having your interest rates lowered and suggest other concessions. However, your creditors are not mandated to participate in a credit counseling option. Apparently, your creditors have the option whether they accept or reject the proposed payment scheme. Nevertheless, credit counseling services can still help you reestablish credit after the loans are paid.

Bankruptcy

Unlike credit counseling, bankruptcy clears your debts in most cases, and your creditors are mandated by law to participate in the legal proceedings. However, declaring bankruptcy would significantly affect your credit report and it puts you in the situation where your future loan applications can be rejected for up to 10 years. You may also have to surrender all properties and assets you own. This is why bankruptcy should not be taken lightly. It is in your best interest to seek professional help from a bankruptcy attorney. Your lawyer will help you identify the best bankruptcy option for you. He also helps in preparing all necessary documents, as well as stand for you during court proceedings.

Debts should not be disregarded in any way to avoid costly complications. If you think you are falling short on your payment scheme, you should look into different services to help you come up with a better plan to eliminate debt. Now that you know the difference between a bankruptcy attorney and a credit counselor, you should now recognize whom to call on in times of financial crisis.

Ed Lopez Law is a full service bankruptcy law firm serving the greater Los Angeles community and its neighboring cities. Located in the Wilshire District few miles from downtown Los Angeles, Ed Lopez Law is a California law firm offering effective and comprehensive strategies to help you understand the benefits of bankruptcy law. We offer our clientele exceptional service by taking advantage of the protection of bankruptcy law to help them start a fresh beginning. We take great pride in offering high quality service and personal attention to each of our client's particular circumstances which type of service is foreign to other bankruptcy practitioners. If you need help and be guaranteed that you will receive the proper solution to your financial difficulties, visit us @ http://www.edlopezlaw.com/.

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