I team up with consumer lawyer Mike Cardoza to identify your rights against debt collectors and then to preserve those claims through bankruptcy.

The longer you resisted filing bankruptcy, the more likely that you’ve endured harassing encounters with debt collectors.

And the more encounters you have with debt collectors, the more likely that you’ve been a victim of prohibited debt collection tactics.  

Debt collection law is strict – there are simply things a collector can’t do. If they do them, you’re entitled to sue just like any other personal injury case, and perhaps be compensated (and have your attorneys’ fees paid , too).

In fact, many of my clients struggling to pay their bills have more than one case – it’s just that common.

Most frequent collector violations

Here’s a list of the most frequent violations –they’re not all obvious.

Take notes if any of these have happened to you, or, if you just get a weird feeling about the way a collection is being handled.

1. Calling repeatedly. This is the most frequent complaint about debt collectors. Once a debt collector’s calls reach the point of becoming annoying or feeling like harassment, you may have a claim against them. There is no set number of “legal” calls, so keep a record of calls you get—including the time, date, and length of call—to present later as evidence of harassment.
2. Threatening serious consequences. Next on the FTC’s complaint list is debt collectors threatening you with a lawsuit, criminal charge, wage garnishment, or any other serious consequence. Most collection agencies do not have the authority to take these actions and are barred from threatening them.
3. Not sending a written notice of debt. A debt collector must send you a written notice verifying the debt within five days of contacting you. Often when they do not, it is because they do not have the information about the debt that they are legally required to have.
4. Revealing debt to a third party. While debt collectors can call your friends and neighbors to try to locate you, they cannot reveal anything about the debt to those third parties. If they do, you can sue them.
5. Calling you at work. If you have told a debt collector not to call you at work and they continue to do so, you can take legal action against them.
6. Using profanity. No matter how much you owe or how long you have owed it, a debt collector cannot verbally abuse you or use profanity or obscene language, even once. If you are mistreated over the phone by a debt collector, put a stop to it immediately.
7. Failing to verify disputed debt. If you do not think you owe the debt you are being called about, you can dispute it in writing. Once you do this, the debt collector must stop contacting you until they can verify the debt.
8. Calling too early in the morning or too late at night. Collectors cannot call you before 8 a.m. or after 9 p.m. If they do this, you can sue them for harassment.
9. Ignoring requests to stop contact. You have the right to request that a collector stop contacting you, even if you do owe the debt, and they must comply. You must submit the request in writing.
10. Threatening violence. Believe it or not, some debt collectors stoop low enough to actually threaten violence against consumers. Unfortunately, this sometimes works. A consumer is so frightened they agree to pay the debt, whether they actually owe it or not. No threat of any kind of violence is allowed by law, and you can take legal action to stop it.
11. Failing to identify themselves as debt collectors – each and EVERY time they contact you in any way.

If you’ve experienced any of these things , save those letters and make notes about those phone calls! Then get a lawyer specializing in this field to review your case – most of whom will do that for free.

Who is a debt collector?

First off, to know if consumer laws on debt collection protect you, you need to know just who is a debt collector in the law.

A “debt collector”  is a person or a company whose main purpose is the collection of delinquent debts.

Companies like Credence Resource Management, I.C. System, Resurgent Capital Services – all of those (and hundreds of others) are traditional debt collection agencies. The original lender contracts with these companies to collect a debt, and, the collection company gets to keep a portion of what it gets as its fee.

Another type of “debt collector” is the debt buying company. Debt buyers pay pennies on the dollar for accounts owed to an original lender and then try to collect the full balance, either on their own or by using a debt collection agency. The bigger players in this space include companies like Midland Credit Management, LVNV Funding, and Portfolio Recovery Associates.

AND, in California, the original lender is ALSO a debt collector under the Rosenthal Act. That’s right.

They don’t have to tell you that they’re a debt collector or verify your disputed debt, but they can’t do any of the other things listed above or they may be liable in a lawsuit as well!

Preserving your right to sue

If you elect to file bankruptcy to deal with all of your debts, you need to take care that you don’t lose your rights under consumer laws.

Any claims that you have for violation of debt collection laws where your interaction with the collector occurred before you filed bankruptcy are assets of your bankruptcy estate.  That means, in theory, that any recovery you might get is subject to the claims of your other creditors.

But all is not lost, because bankruptcy trustees seldom pursue consumer claims.  The usual trustee thinking is that the claim is uncertain and requires the active cooperation and involvement of the debtor.  That complicates things for a trustee. So they often simply walk away from any debt collection claims.

Don’t think that just by keeping quiet about your claims you can avoid having to share with the bankruptcy trustee.  Attorneys defending debt collectors love to get your case tossed out of court when you failed to disclose it to the bankruptcy court.  

The rule is simple:  List it or lose it.

Turn the tables on debt collectors when they overstep and get them to pay you.

More

Mike on the Equifax breach

Your unfiled legal claims in bankruptcy

Secret alternative to bankruptcy

I started picking the brain of my friend attorney Mike Cardoza about all of the personal credit information stolen from Equifax when we met last month at the NCLC Consumer Rights Litigation Conference. 

Mike’s the guy to ask since he describes his practice as suing credit bureaus in order to fix clients’ faulty credit reports. 

Instead of making notes, I got Mike to tell us all what a seasoned consumer lawyer recommends.

With the Equifax data breach of 2017, consumers – people like you and me – are more at risk than ever.

Did you know, for example that the credit bureaus DON’T use all nine digits of a person’s social security number in order to verify the accuracy of the information they’re adding to your file?!

And that’s the tip of the iceberg.

Here are the four steps that I recommend you take immediately to protect yourself from false and damaging information being included in YOUR credit report:

1. DON’T go to the Equifax web site

Why? Just after the breach was announced (which was a full 30 days after senior executives knew about it and sold some of their personal stock in the company), Equifax told everyone to go its website and get free protection.

Well, guess what? That free protection included a mandatory arbitration clause buried in those terms and conditions you had to click in order to get it.

That meant that you and everyone who went to the site gave them an agreement never to sue them – just like a “get out of jail free” card! (Shocking, I know).

After the outrage, Equifax claimed to have removed that arbitration clause, but still, going to Equifax isn’t going to help if it turns out you have a problem.

2. DON’T bother getting a “credit freeze”

A credit freeze doesn’t stop thieves from making changes to your existing accounts.

It doesn’t stop the credit card offers from being blasted out into your (or your neighbor’s) mailbox, and it makes everyday life (like getting a discount by opening a store credit card, upgrading your cell phone plan, or adjusting your utilities or cable service) a major pain in the keister!

3. DO: Monitor your credit reports (and score) in real-time for free for unusual activity

I like to use Credit Karma – you have to give personal information, they only show 2 of the 3 bureaus, and they make money by pitching you sponsored credit card offers – because it’s accurate and instantaneous.

Get the app and let it send you notifications on your phone.

4. DO: Get your full credit report

Once a year, get your report from all 3 major bureaus in paper and delivered to your house – for free.   If you haven’t done that in the past 12 months, do it now.

Why? Because those paper credit scores are way more detailed than anything you get online, AND they can be used as evidence of identity theft or in court in the event you need to dispute something on there that doesn’t belong to you!

If you’d like, I’ll send you some instructions by email (for free, of course) about exactly

• how to get those reports,
• exactly what to look for when you get them, and
• what to do about it if you find something in there that is wrong.

Just click on “The Ultimate Credit Clean Up Machine” image below to give me your email and get the info.

The Federal Trade Commission estimates that 21% (that’s 1 in 5) of Americans has a mistake on their credit report – and it could be one that’s costing you real money!

Don’t suffer not knowing – just pull that band-aid off and see if your credit could possibly be any better than it already is. You kind of owe it to yourself (and your family).