If you are being harassed or threatened collection actions on old debt, there are many things to consider. First, a legitimate collector is required to send you something in writing within five days of the initial contact under the FDCPA. That’s sort of a litmus test. Receiving nothing in writing is a violation, but it’s also a sign of a debt scammer.
Second, check your credit report via annualcreditreport.com. If the debt is on there, it’s causing you harm and you should do something about it. Contact us or another consumer attorney — the first steps would be to dispute the debt. Often the consumer rules aren’t being followed. For instance, balances are reflected more than once, or are inaccurate in other ways. We often file actions under the Fair Credit Reporting Act which may result in the debt being removed once and for all (waiver of debt or trade line deletion), and you may receive damages due to the inaccuracies. Everything relies on good credit it seems. Bad credit can harm you in all kinds of ways. You don’t pay us up front – we only get paid if we are successful in obtaining a recovery.
People are often confused about how attorney’s fees work – when do you have to pay your own, and when does the losing party have to pay? This question is very important when you are faced with a decision of whether to “take someone to court”. In the United States, each party pays their own attorney’s fees unless a contract or statute states otherwise. Often a person is denied justice unless a contract or statute allows recovery of attorney’s fees because it simply does not make financial sense to right all wrongs.
Many consumer protection or debt harassment protection statutes such as the FCCPA, FDCPA, and the FCRA provides for the recovery of attorney’s fees. Attorneys act essentially like mini attorney generals in that regard. We can sue for someone under a statute that provides payment from an offending creditor for instance.
Contracts are another way in which attorney’s fees are recoverable. You might read in a mortgage or debt related contract that the creditor is permitted to obtain its attorney’s fees and court costs if it has to pursue legal action to collect a debt. While these contracts don’t clarify this, an attorney’s fee provision in a contract goes both ways, at least in Florida. If the consumer is the prevailing party, the consumer can obtain their attorney’s fees and court costs as well.
Now that debt collectors are back and moratoriums are falling away, this is a good opportunity to remind Florida consumers about limitations that bind debt collectors. Basically, things they may do or say that could get them into trouble, and give you recourse to sue or settle or more favorable terms. So what do we look for?
- Misleading letters regarding payment options, statute of limitations, or credit reporting.
- Letters lacking required disclosures or misleading about dispute process.
I’ve written quite a bit recently about the Department of Education’s recent announcements to halt the accrual of interest and collections of certain federal loans. Direct Loans and some FFEL loans are automatically being placed in forbearance until September 30, 2020.
Importantly, these COVID-19 related protections do not apply to all loans – private loans, Perkins Loans and commercially held FFEL loans will continue to accrue interest, and they can continue to collect.
But there are still debt collection limitations that apply particularly during this time of national emergency:
Despite early applications and full financial documentation (sometimes submitted within hours of portals opening), some banks, who will remain nameless for now, dropped the ball and did not timely process PPP applications on behalf of scores of small businesses who had been loyal customers for years. I am one of these such businesses in Tampa Bay, Florida.
So I’m beginning to ask myself, what did these banks who failed their customers have to gain – while they strung the little guys along? If I had known my application would sit untouched for two weeks, I could have gone elsewhere, I have several banking relationships. But I chose to stay with the one application I filed with my primary banker. I counted on that bank. I was let down. Many more share my story.
I will soon have to draw down my line of credit at approximately 8% interest. That money goes to my bank – those funds will help their bottom line. These banks have profited by “dropping the ball”. Many small businesses will fail. Local businesses. Mom and pops. Despite filing an early application with a trusted banker.
My first consult this week was for a former client who just learned of a bank garnishment of his joint bank account with his wife from an old Cach final judgment that he thought was vacated and dismissed. The entire account was frozen. Plus his wife’s next check couldn’t be stopped from being deposited and taken.
How did he learn of this? When he was at the grocery store to buy food for his family in the midst of the COVID-19 crisis. After carefully avoiding everyone and loading his cart with what he could find – he walked away with nothing. He didn’t have money to pay us, but since we had been compassionate to him in the past, he thought, why not contact us, perhaps there is something we could do.
Fortunately, we were able to secure with the opposing attorney, a dissolution of the writ of garnishment and all the money in his joint bank account will be released in just a day or two. In the meantime, our client has borrowed some funds from a neighbor. This could happen to anyone — this client had no idea that this old judgment was out there, and that bank account was his emergency fund. He lost his job in Europe and had no credit cards. His wife works at a local Tampa Bay retailer and just had her hours cut. I sincerely appreciate opposing counsel who timely communicated with me in this urgent matter to get it resolved now and without the necessity of a court hearing, which could take a few weeks!
Are you looking down the barrel of an arbitration clause in your consumer/creditor agreement? I’ve posted before (Arbitration Clauses in Consumer Contracts – How to Avoid Being Thrown out of Court) on some local case law here in Florida to help avoid arbitration clauses – but here’s a new case in the consumer’s favor in Bankruptcy Court for the Middle District of Florida.
The Bankruptcy Court ruled that an arbitration clause did not constrain the court’s contempt powers, “[w]ords in a consumer agreement cannot deprive the bankruptcy court of the inherent power to enforce compliance with an injunction.” Verizon Wireless Personal Communications, LP v. Bateman, No. 14-5369, Adv. Pro. No. 18-1394 (M.D. Fla. Sept. 24, 2019).
So if you’re in bankruptcy, or had a previously filed one that you can reopen (without a filing fee), challenge the arbitration clause in bankruptcy – you may be much more likely to win!
First, a debt collector will always deny that you ever revoked consent to call. They will argue that you did not provide enough personal identifying information for them to verify and therefore they could not process the DO NOT CALL request.
Second, they will argue that the consumer did not specify which number he or she did not want the calls made to.