Handling Debt Collectors
Debt Collection Defense
Debt comes in many forms: credit cards, charge cards, medical bills, consumer loans, accounts receivable, etc. Unfortunately, circumstances often occur that lead to the account holder being unable to continue to make the required payments on the account. If you find yourself in this situation, you may feel embarassed, pressured, threatened, isolated, or more.
Across the United States, there are companies and investment groups (typically referred to as debt buyers) that routinely purchase delinquent and “past due” accounts and seek to recovery the money. They may send threatening letters or place phone calls to you and, eventually, have their lawyer sue you to collect on the account. In today’s challenging economy, companies and creditors are becoming more aggressive in their efforts to collect on debts—-valid and invalid. A disturbing trend is that of “zombie debt” cases in which creditors pursue cases where the debt is several years old and sometimes even barred by the applicable statute of limitations.
Even worse is the situation where a consumer is contacted and sometimes sued on a debt that she never incurred. The “documentation” provided by the creditor or collector is forged and on paper it makes a compelling case that the consumer is responsible for the debt. But there are certain standards and burdens of proof that the creditor or collector must meet and you must know how to assert these as well as how to prepare your own response/defense. Many consumers mistakenly believe it is sufficient to send a witnessed or notarized letter to the creditor or collector stating the consumer does not owe the debt. Unfortunately this is rarely enough to stop the madness. Unless you receive some written, signed confirmation from the creditor or collector stating they are no longer holding you responsible for the debt you should assume that you need experienced legal help in resolving the situation. The good news is that, depending on the facts and circumstances, you may be able to have the matter resolved in your favor AND recover money from the creditor or collector.
Many people believe that contacting the state Attorney General’s office will lead to a resolution of the matter. However, the Attorney General’s office does not represent individuals in debt collection defense matters or other consumer protection issues. You should contact an experienced consumer protection attorney such Attorney John O’Neal so you can receive the personal attention you deserve.
There are federal and state laws that protect your rights and establish rules for how debt collectors can contact you and deal with you regarding your debts. The O’Neal Law Office represents individuals who have been contacted and sued by debt collectors. Contact Attorney John O’Neal for a free initial consultation to discuss your case.
Fair Debt Collection Practices
You may receive letters and phone calls from collection agencies and/or their attorneys. Tread carefully here especially when it has been many years since you made any payments or purchases/charges to the account. Certain action taken by you could “restart the clock” regarding the rights of the debt collector.
A debt collector cannot do the following:
- Threaten to take action that it does not intend to pursue
- Contact your friends, family, employer, or others other than to determine where you live and work
- Make any false statement regarding an alleged debt
- Use profane language or repeated telephone calls
- Contact you at work if they have a valid, non-work related phone number for you
- Threaten to hurt or harm you or your family
Tips for dealing with debt collectors
◘ Whenever you speak with a debt collector record the following information:
- Date and time of the conversation
- Approximate length of the conversation
- Name and phone number of debt collection agency or company
- Name of person(s) with whom you spoke
- General nature of conversation (did the person make any threats of legal action, garnishment, judgments, physical violence or intimidation? What was the amount of the account and any late charges? did the person offer any settlement terms for the debt?)
◘ Save all voicemails, recorded messages, text messages, letters and envelopes, faxes and cover sheets, e-mails, and any other written communication you receive from debt collectors.
◘ If you dispute any part of the debt, tell the debt collector in a simple letter. In your letter, state that you dispute the debt and want written verification of the debt. Your letter need not mention any specific laws or threaten legal action. Send your letter via certified mail, return receipt requested and keep a copy of your letter.
◘ Do not become abusive or use profane language, threats, or other intimidation tactics when speaking with debt collectors.
NOTE: If a debt collector violates the FDCPA, you may be entitled to recover actual damages, statutory damages of up to $1,000, and attorney’s fees and court costs, if you win your case. Under North Carolina’s state debt collection laws, collectors who harass consumers may additionally be responsible for actual damages, up to $4,000 in statutory damages, and attorney’s fees and court costs.
What to do if you are sued….
If you receive any legal papers from a sheriff or any document that has words such as “Summons” or “Complaint”, do not place the documents to the side or throw them away! This is the WORST thing you can do. Even if the debt/account covered in the lawsuit is time-barred by the statute of limitations, you must respond to the lawsuit to raise the statute of limitations defense and any other defenses available to you. In some cases, you may have valuable counterclaims which could result in reducing or cancelling the debt and possibly even money damages to you and the recovery of attorneys’ fees. Your failure to respond to the lawsuit serves as an admission of the facts in the lawsuit and could lead to the entry of a default judgment against you. In North Carolina, a judgment is valid for 10 years and can have a negative effect on your credit rating and your future financial standing.
An experienced lawyer can…
- determine if the debt collector has the proof and documentation required under North Carolina law
- determine if the debt collector is contractually entitled to recover interest and attorney’s fees and, if so, at what rate
- fight for you if you are being wrongfully pursued regarding a debt
- help you determine if you have valid defenses and valuable counterclaims to the lawsuit
- negotiate a reduction or, in certain circumstances, foregiveness of the debt
Here is a sample of the debt collection defense cases Attorney John O’Neal has handled:
- A senior citizen was sued for failing to pay a five-figure balance on a credit card account she allegedly opened. The woman claimed she had never owned any credit cards and the company must have been mistaken. The company sought full payment of the balance with interest and attorneys’ fees. John O’Neal represented the woman and, after requesting documentation and proof of the woman’s responsibility for the debt, it was apparent that the company could not produce sufficient documentation. John O’Neal filed a motion for summary judgment against the company which, if granted, would have dismissed the company’s case. Three days before the motion was to be heard, the company decided to dismiss the case against the woman.
- A woman was sued by a debt buyer for allegedly defaulting on a credit card account that she had not used or received correspondence about for several years. Attorney John O’Neal represented the woman and filed an Answer and Counterclaims requesting the case be dismissed on several grounds including the statute of limitations. Attorney O’Neal requested the debt buyer produce proper documentation of the credit card account and prove the propriety and timeliness of the lawsuit. Apparently unable to provide the required documentation, the debt buyer dismissed the case with prejudice and the woman paid nothing.
- A woman had an outstanding balance on an aged credit card account. The card account was transferred to a collection agency for handling. The woman responded to a settlement offer by the collection agency and settled the account in full. A few months later she was again contacted by the collection agency about an alleged balance due on the account. She produced her documentation of the settlement and the collection agency admitted its mistake and closed her file. However the original creditor bank somehow placed the account with another collection agency for further handling. At this point the woman had had enough and contacted Attorney John O’Neal. Based on the woman’s documentation and the impending threat of litigation for violation of state and federal debt collection laws Attorney John O’Neal settled the matter for an amount larger than the original outstanding balance of the account that she woman had settled.
- A consumer was sued by a credit card company for allegedly defaulting on a credit card account that he had not used or received correspondence about for several years. Attorney John O’Neal represented the consumer and filed an Answer and Counterclaims requesting the case be dismissed on several grounds including the statute of limitations. Attorney O’Neal also filed counterclaims against the credit card company seeking statutory monetary damages for the consumer and attorney fees. After the court dismissed the credit card company’s case the company settled the counterclaims filed by O’Neal and the consumer—resulting in money to the consumer.
If you need help in responding to a debt collector, contact Attorney John O’Neal IMMEDIATELY to discuss your case.