FAIR DEBT COLLECTION PRACTICES ACT
The economy is affecting everyone. A person may be laid off or injured. A person's overtime or normal hours may be reduced. A person's benefits may take a hit.
What about debts? What happens when a person gets behind on the bills? What happens when a person starts getting calls from collection agencies?
The first thing you need to do is protect yourself by knowing your rights. And by knowing that there is a right way and a wrong way for debt collectors to try to collect. All debt collectors have rules to follow. The Fair Debt Collection Practices Act ("FDCPA") outlines the rules for collectors and debtors to follow:
1. A debtor collector may not threaten a debtor. If a collector threatens to "come and take everything". They may have just violated these rules. If a debtor owns a car, and the payments are in arrears, they can reposes the car. If a debtor is behind on mortgage payments, they can start a foreclosure process. But, they have to follow a certain procedure and the debtor must be notified in writing of everything. If they start a foreclosure process, the debtor may receive a Summons either by certified mail, sheriff or process server.
2. Garnishing wages. Debt collectors CANNOT garnish wages if they have not properly filed a Complaint in court and received a Judge's Order to garnish your wages. Again, there is a process that must happen and certain property is exempt from garnishment.
3. Freezing accounts. There are certain payments that are deposited into banking accounts that may be exempt from garnishment or being frozen.
4. Bankruptcy filings. If a debtor files bankruptcy, the collection calls must stop and the court will issues a "stay" - which stops all collection efforts, including foreclosure, until the creditor follows bankruptcy procedure.
|What happens when the creditors/collection agencies don't follow the rules? In one case: Todd v. Weltman, Weinberg & Reis, Co., LPA (434 F.3d 432) Plaintiffs (Mr. & Mrs. Todd) filed a complaint against the Defendants (Weltman, Weinberg & Reis) for malicious prosecution, abuse of process and violations based upon the FDCPA 15 U.S.C. 1692e and 1692f. "A debt collector may not use false, deceptive, or misleading representation or means in connection witht he collection of any debt... A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt."|
The only income that the Todds had were Mr. Todd's Social Security Insurance Benefits and his wife's short-term disability payments for an injury she sustained. Weltman, Weinberg & Reis filed an affidavit with the court that stated they had a "reasonable basis to believe that the person named in the affidavit that the garnishee may have property, other than personal earnings, of the judgment debtor that is not exempt under the law..." The judge froze the Todd's bank accounts because of the affidavit.
Weilman, Weinberg & Reis did not follow the rules by first conducting a Judgment Debtor's Exam and did not look into whether the Todds had funds that were exempt. The bill collectors froze all of the Todd's accounts.
The Todds fought back in court and won, all of the funds from their bank accounts.
Remember, the best way to protect yourself is to know your rights and know that all debt collectors have certain rules to follow. A debtor may have only 30 days to dispute a credit card charge or debt in writing. Just because a debtor calls a debt collector and tells them of a dispute of the charge or the amount is not enough. A debtor needs to put the dispute in writing to the credit/collection agency.
Call me if you have any questions regarding these procedures.
MICHAEL A. O'HARA, PLLC