Judge: Ally Violated Bankruptcy Rules
October 29, 2013
DALLAS —In a recent ruling, a federal judge said she believes Ally Financial Inc. violated federal bankruptcy rules designed to protect debtors. She accused the finance company of sending confusing letters to debtors to get them to pay off debts they no longer owed after declaring bankruptcy, reports The Dallas Morning News.
U.S. Bankruptcy Judge Stacey G.C. Jernigan ordered Ally to pay $11,000 to the recipient of such a letter who had filed bankruptcy and indicated her intention to surrender her vehicle to Ally. The letter she received indicated that she was late in making payments on a 2008 Chevrolet Silverado 1500 Extended Cab Work Truck that was in possession of her estranged husband.
“… while Ally belatedly offered some plausible explanations for its letter, Ally’s letter did, indeed, ‘cross the line,’” read the court ruling. The judge noted that sending unnecessary letters to debtors “may have been the precise business strategy of Ally — i.e., send the letter and maybe the debtor will send in a payment.”
"While Ally disagrees with some of the language in the ruling, we respect the Court's decision and have paid the damage award to the plaintiff," Ally's Director of Media Relations Susan Fitzpatrick told F&I and Showroom. "It is important to note that Ally's process complies with all bankruptcy requirements."
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