What Debt Collectors Can’t Do…#4

This time, in our monthly series, we’re talking about false or misleading representations debt collectors may make to consumers.

Of the many prohibitions in this section, let’s zoom in on one particular no-no:

Representing or implying that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.

Bottomline: debt collectors can not call you up, tell you that you owe X amount of money, and then inform you that you will be arrested if you don’t pay that money by the end of the day. Or that you’ll be thrown into jail if you don’t pay the debt.

That’s not how debt collection, or the legal process in general, works.

But it is scary, to listen to someone you don’t know, who you assume probably knows more about this area than you do, threaten you with legal actions that seem out of your control.

Here’s a tip: people who are thrown into jail have received some sort of judicial notice – whether by court order or bench warrant – that they are facing jail time. The only other way I can think of is if you violate a criminal law, like assaulting someone or disturbing the peace or distributing drugs, you can expect that if you get caught, you’ll likely be spending a night or two in jail before getting to see the judge to discuss a bond.

My point is that jail happens to those who commit criminal acts and are considered a threat to themselves or the community, NOT to people who have a debt being collected on. There is no authority for a private individual or entity to have someone locked up in jail. That only happens after a judge or jury has weighed the evidence, or law enforcement recognizes that there’s an imminent threat of harm, or the criminal act already occurred and the damage is done.

So if you get that call from the debt collector, and they threaten jail time or arrest if you don’t pay your debt, make a record of it and let them know they’ve violated the Fair Debt Collection Practices Act.

What Debt Collectors Can’t Do….#3

For #2, go here.

For #1, go here

This time around in our “what debt collectors can’t do” series, let’s talk about when player 3 enters the game. For all of you non-video gamers, you are Player 1, debt collector is Player 2, and any third party is Player 3. There are a series of prohibitions in 15 U.S.C. 1692b concerning what debt collectors can’t do if they communicate with third parties. Here’s a brief check list of prohibitions in that section:

  • Failing to identify themselves as a debt collector;
  • Stating to a third party that the consumer owes any debt;
  • Contacting a third party more than once, unless requested to do so;
  • Using postcards;
  • Using language or symbols on any envelope or communication indicating debt collection business;
  • Contacting a third party after knowing the consumer is represented by an attorney.

But hold up, wait a minute. Does my dog count as a third party? Uh, no. Here’s the specific language describing what a third party is:

“Any debt collector communicating with any person other than the consumer…”

So not my dog. But definitely your neighbor, boss, spouse, girlfriend, boyfriend, friend you are only friends with on facebook and don’t talk in real life, sister, brother, nephew, niece, aunt, uncle, grammy, grampa, and even your kids.

In an effort to be even more exhaustive in my list making, here’s a list of third parties a debt collector CAN contact when trying to collect a debt:

  • The consumer
  • The consumer’s attorney
  • A consumer reporting agency (if permitted by local law)
  • The creditor
  • The creditor’s attorney
  • The debt collector’s attorney

Anyone else, and the debt collector better have prior specific permission from the consumer or local court OR only be seeking location information for the consumer from a third party. Location information means basically the contact information for the consumer, like address and telephone number. And this statute also specifically includes “employer information” as part of the “location information” that a debt collector may seek from a third party.

What is a Default Judgment?

Have you ever heard of a default judgment? Have you ever had a default judgment entered against you?

The Nebraska Supreme Court rules define default judgments as “cases where the defendant fails to answer, demur, or otherwise plead,” and the plaintiff files a verified petition, affidavits, or sworn testimony on the day after the defendant’s answer was supposed to be filed. Rule 6-1432.

OK, so this is a Netflix envelope. The point is: don't ignore anything you get in the mail. Whether it's your next Netflix dvd or a notice that you're being sued.

OK, so this is a Netflix envelope. The point is: don’t ignore anything you get in the mail. Whether it’s your next Netflix dvd or a notice that you’re being sued.

Cutting through the legalese, here’s what this means:

You get a notice in the mail that you are being sued. Instead of doing something (ANYTHING!), you ignore the notice and hope it goes away. It doesn’t go away. 30 days pass from the day you were served with the lawsuit notice. 

On the 31st day of knowing you are being sued, the plaintiff files all the important paperwork with the court that they think will sufficiently prove their case against you, the defendant. 

There’s a default judgment hearing before the judge. Plaintiff assumes you won’t be there, since you didn’t answer the lawsuit complaint in the first place, and let’s face it, you probably won’t be there. So the judge and the plaintiff’s attorney and maybe even the plaintiff himself is there, at the hearing. You’re not there. No one hears your side of the story because you weren’t there to tell it and you didn’t think it was important to answer the lawsuit complaint in the first place. 

Having heard only one side – the plaintiff’s side of things – the judge will enter a default judgment against you. Not good, not good at all. Now the plaintiff can go about finding ways to get his default judgment paid – by garnishing your wages, garnishing your bank account, searching for pockets of money you might have to pay off the judgment, which is a higher amount than your original debt that went into collections. 

Unfortunately, this is why debt collectors have so much leverage over the average consumer – no one thinks it’s important to respond when they receive notice that they are being sued. Who cares if it’s only for that medical debt that you can’t pay anyway?? I care, because if you allow a default judgment to be entered against you, additional fees, interest, and costs will be tacked onto your original debt. Do you think you should be paying more money on the debt you already can’t pay?

Bottomline: please please please don’t ignore those lawsuit notices. Answer them, show up to your hearing dates, or do whatever you need to do to keep yourself in the game.

 

 

What Debt Collectors Can’t Do….#1

I’m starting a series, hopefully to help those of you receiving calls from debt collectors, or other types of communications from debt collectors (Ex: my post on The Worst Thing a Debt Collector can Do to You).

To start the series, let’s talk about one violation that seems to occur with alarming regularity:

Causing the phone to ring or engaging any person in telephone conversations repeatedly

This language is taken directly from the federal statute, 15 U.S.C. 1692(d)(5), outlining one of many forms of harassment a debt collector may not use in order to collect a debt. Here’s the full text of 1692(d)(5):

“Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.”

So how many telephone calls does it take to count as harassment? It depends.

Frustrating answer, isn’t it? There isn’t a bright line rule because courts analyze the statute under a case-by-case basis. This means the facts of one case don’t necessarily predict the outcome of another case that might have similar, but distinguishable facts.

Here are some factors to consider if a debt collector has been calling you:

  • How many calls have been made to your home or office or cell phone?
  • Over what length of time have those calls been made? Common sense would suggest that the more calls made over a short course of time, the more likely it is that you have a violation.
  • Are they leaving messages if you don’t pick up the call?
  • Are you picking up the call every time they call?
  • Are they calling after working hours?

Bottomline: if you feel as though a debt collector is harassing you with their constant phone calls, contact a FDCPA attorney to see what they think.