Are you being contacted by collection agencies, constantly harassing you about paying old debts? Are you being hauled into court and being served with summons on a regular basis?
I wanted to write this article to help debtors understand that they have recourse against their creditors. I constantly encounter people who are in debt and are frustrated by the humiliating process many firms and agencies use to collect their debts. Often times, the person (or sometimes machine) on the other end of the line is not even the original creditor who signed the agreement in the first place.
Debts are bought and sold like commodities on the free market. Often, debts are sold a dozen or so times commonly at a small fraction of what the debt is worth. Many firms (law firms and collection agencies) will acquire literally hundreds of thousands of debts owed to third parties for pennies on the dollar. The idea is–that most debts will be uncollectable and written off. These firms will break even if they collect even a single percent (1%) of the total monies owed. Any funds received over and above this is pure profit for the debt collection agency or law firm. These debts are most often bundled and sold as a package; in other words, the better debts are put together with less desirable accounts in order to make a deal.
These law firms and debt collection agencies were so out of control with these practices, that in 2006 Congress passed the Fair Debt Collection Practices Act (“FDCPA”) 15 U.S.C. 1692 et. seq. The act is very expansive and lengthy, but I can boil down a few common violations that I find by collection agencies. The most common is the requirement that collection agencies send a letter not less than thirty (30) days before initiating a lawsuit explaining the details of the alleged debt, and allow the alleged debtor an opportunity to dispute it. If the collection agency fails to perform this duty, the Act provides a cause of action by the debtor against the creditor for economic and special damages, i.e. attorney fees, of up to $1,000.00 for each violation.
In addition, Indiana law has a requirement to provide a signed writing at the time of initiating a lawsuit, which includes a signed writing for each agency in the chain of ownership of the debt to the current owner of the debt. In my experience, very few agencies can produce these required writings. A failure to provide the writings upon the objection of the debtor results in a dismissal of the action.
What I have encountered in these situations is that most agencies will stipulate to a dismissal upon filing the proper objections and motions. The agencies themselves cannot afford to do the research or provide the documentation, or file the proper rebuttals to each and every debt in their overwhelming portfolio. So, what results is that the creditor agency or law firm will agree to dispose of the claim. Once the claim is disposed of, the debtor can use those court documents to clean up his or her credit rating with the various credit reporting agencies.
If you have a debt collection agency or law firm contacting you on a regular basis, SFT Lawyers can help. We are experienced in the egregious practices of debt collection agencies, and we can stand up and fight for debtors’ rights. Call (219) 841-5683 or fill out our Contact Us page to find an attorney to protect your rights.