How to request validation of a debt
March 11, 2010 by Todd Murray · Leave a Comment
The Fair Debt Collection Practices Act (FDCPA) gives consumers the right to request validation of a debt. Under the FDCPA, a debt collector must send you a written notice within 5 days of their first communication with you. The notice must tell you, among other things, about your right to request validation of the debt.
In my experience, consumers should almost always request validation of the debt, particularly if a debt buyer is involved, because the more information you have, the better. But here are a couple things to keep in mind about the validation process:
- You must request validation in writing and you must request it within 30 days of your receipt of the required notice. Under the FDCPA, a debt collector doesn’t have to honor a request for validation unless it’s in writing and unless they receive it within 30 days of your receipt of the notice. As a practical matter, many debt collectors will honor a verbal request for validation and some will even honor a request made after the 30 days. But if you want to protect your right to have your debt validated, you must do it in writing and within 30 days. I recommend sending the letter via certified mail so that you can prove that they received it and when they received it.
- Once you’ve properly requested validation, the debt collector must cease all collection attempts until they provide it to you. There are some websites that claim that a debt collector must validate a debt within 30 days and if they don’t the debt is forgiven. This is simply not true. There is no time limit to how long the debt collector has to validate your debt. They just can’t call you, write you, sue you, or take any other action until they validate. If they do, they’ve violated the FDCPA.
- A debt collector can’t use your failure to request validation of a debt against you. The FDCPA prevents collectors from using your failure to request validation as evidence that you owe the debt.
- There aren’t any clear requirements about what type of documents are sufficient validation. The FDCPA doesn’t define validation, and the FTC has said that validation only needs to confirm that the debt collector is pursuing the right person and the right amount.
- Collection activity during the 30 day validation period can’t “overshadow” your right to request validation. This can be a little tricky, but here’s an example: let’s say you receive the validation notice on March 1 and then they serve you with a lawsuit on March 5. Under the FDCPA, you have 30 days–or until March 31–to request validation. And in Minnesota you have 20 days–or until March 26–to respond to a lawsuit. So because you have to answer the lawsuit before your time to request validation is up, the lawsuit “overshadows” your right to request validation. This is a violation of the FDCPA.
Feel free to downloand my free validation letter form and instructions. And if you live in Minnesota and believe that a debt collector has violated your rights under the FDCPA, feel free to contact me for a free case evaluation.
What should I do when a debt collector gets a judgment against me?
February 24, 2010 by Todd Murray · Leave a Comment
In a debt collection case, a judgment is a court order that you owe the creditor money. A judgment gives the creditor the power to garnish your bank account and wages. It has a negative impact on your credit score. And in some cases, creditors will exercise their post-judgment power to seize some of your personal property and have it sold to pay the debt. Having a judgment against you is an unpleasant situation to be in and is one of the main reasons why it’s so important to answer the summons and complaint. If a creditor has a judgment against you, here are some of your options:
- Consider a motion to vacate the judgment. If the judgment was obtained by default, you may be able to bring a motion and eliminate the judgment. This will give you a chance to defend yourself. Think of it as a do-over. But you’re only able to get a judgment vacated in very limited circumstances. A consumer lawyer can help you decide if a motion to vacate is right for your case.
- Negotiate a settlement or payment plan. If a motion to vacate the judgment is not appropriate in your situation, your options are pretty limited because the time to dispute the debt has passed. In many cases, your best choice may be to engage the creditor and arrange for payment. That may be the only way to avoid the stress and inconvenience of garnishments. Good deals are hard to come by after judgment because you’ve lost most of your leverage. But if you can demonstrate a significant financial hardship, or have a lump sum of cash available, you may be able to get the creditor to knock a decent chunk of the balance off.
- Remember that the FDCPA applies even after the judgment is entered. So keep a record of all the conversations you have with the debt collector and save all letters and voice mails from them. And if you think that a debt collector has violated the FDCPA, consider talking to a consumer lawyer about the situation.
- If all else fails, bankruptcy may be your best option. If the judgment is for a significant amount of money, or if you have multiple judgments, your best choice may be bankruptcy. Consider talking to an experienced bankruptcy lawyer to figure out whether bankruptcy is right for you.
If you live in Minnesota and want help dealing with a debt collection judgment, feel free to contact me by using the contact form in the upper right corner of this page. I offer a number of flexible representation options, so even if you can only afford to pay a few hundred dollars, I might be able to help you.
(photo: Xurble)
Debt collector sues the wrong person then blames him for its mistake
December 7, 2009 by Todd Murray · Leave a Comment
Pressler & Pressler, a large debt collection law firm, sued the wrong Mark Hoyte. Although Hoyte’s social security number and date of birth did not match the ones in Pressler’s file, they continued with the lawsuit. Not until Pressler’s attorney talked to Hoyte in the hallway outside the courtroom did they finally admit that they had sued the wrong person and agree to dismiss the case. But the judge was not impressed. Judge Noach Dear asked Pressler’s attorney why his law firm didn’t make sure it had the right person before suing. The attorney responded by saying said that Pressler & Pressler used an online database called AnyWho to hunt for debtors. “So you just shoot in the dark against names; if there’s 16 Mark Hoytes, you go after without exactly knowing who, what, when and where?” Judge Dear asked.
But instead of conceding its mistake, Pressler’s lawyer then tried to blame Hoyte. He asked Hoyte if he had provided Pressler with any written proof that he wasn’t the debtor. Hoyte responded by saying that Pressler never asked for written proof. Incredibly, Pressler’s attorney then told Hoyte that “[s]o without any written proof that it’s not you, you would expect someone just, you know, to go on say-so”?
This is yet another example of the sue first, ask questions later approach used by most debt collectors. But for the debt collector to blame the innocent consumer, in open court and on the record, takes quite a bit of, ahem, nerve. Judge Dear is considering sanctions against Pressler for its easily-avoided mistake.
Hello, Collections? The Worm Has Turned | New York Times | November 27, 2009
What is debt collection harassment?
December 3, 2009 by Todd Murray · Leave a Comment
Sounds like an easy question, right? But there has been a lot of litigation over what exactly is considered “harassment” or “abuse” under the Fair Debt Collection Practices Act (FDCPA). Here are some debt collection tactics that are definitely considered harassment and abuse under the FDCPA:
- Debt collectors cannot use violence to collect a debt. They can’t even threaten it. This prohibition also covers threats against your children, friends, and other third parties.
- Bill collectors can’t use profane or abusive language. Obviously different people have different definitions of “profane or abusive”. But at least one court has ruled that name calling and racial or ethnic slurs are profane and abusive.
- Collectors can’t call you repeatedly. This not only applies to actual telephone conversations, but also to causing the phone to ring. For example, redialing your number after you’ve hung up the phone.
- Debt collectors must tell you who is calling. Fairly self-explanatory. But there is some debate about whether collectors can use a consistent alias. Not surprisingly, many collectors would rather not use their real name when on the job. So some courts have allowed the use of aliases.
- Any other debt collection conduct where the “natural consequence” is to harass, oppress, or abuse. This is the catch-all provision. Again, it can be tough to define what conduct has the natural consequence to harass, oppress, or abuse, but courts have found the following conduct to be violations of this section: (1) threats to contact third parties; (2) telephone messages left with neighbors when the collector could have reached the consumer directly; (3) use of words like “liar”, “deadbeat”, and “crook”.
If you’re dealing with debt collectors, make sure to download and use my free debt collection call log so that you can document all of the debt collectors’ communications. And if the debt collector does anything that you think was unfair; untrue; or harassing, oppressive, or abusive, please contact me to discuss the situation further. I offer a free case review for all FDCPA cases and if I agree to handle your case, you won’t have to pay me any money up front. My fees come from the money I recover from you if you win your case or accept a negotiated settlement.
Debt collectors can’t threaten to sue you unless they really mean it
November 16, 2009 by Todd Murray · Leave a Comment
The Fair Debt Collection Practices Act (FDCPA) prohibits a debt collector from threatening to do something that they don’t really intend to do. The most common violation of this part of the FDCPA is when a debt collector threatens you with a lawsuit if you don’t agree to pay the debt. This FDCPA violation requires two things: (1) that the debt collector threatened to sue you; and (2) that they didn’t really mean it. So how do you know whether the debt collector is lying when they threaten legal action? Here are a couple of indications:
the amount of the debt is small;- the debt collector does not have an office in your state;
- the debt collector does not have a licensed attorney in your state;
- the collector threatened a lawsuit and months or even years went by before they sued you.
There are other indications as well, but its tough to know whether they apply before bringing a FDCPA lawsuit. For example, the debt collector may not have the creditor’s authorization to sue you, but there’s really no way to know that until you get into litigation and can use discovery to figure it out.
This part of the FDCPA probably also applies to many veiled or implied threats of a lawsuit. For example, courts have found FDCPA violations from the following statements:
- The collector “can” or “may” sue;
- The debt would be referred to a lawyer “for collection action”;
- The collector is authorized to proceed with legal action;
If you’re dealing with debt collectors, make sure to download and use my free debt collection call log so that you can document all of the debt collectors’ communications. And if the debt collector does anything that you think was unfair; untrue; or harassing, oppressive, or abusive, please contact me to discuss the situation further. I offer a free case review for all FDCPA cases and if I agree to handle your case, you won’t have to pay me any money up front. My fees come from the money I recover from you if you win your case or accept a negotiated settlement.
(photo: chefranden)
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