ILLEGAL DEBT COLLECTION PRACTICES


Should I sue a debt collector for harassing me?

The law firm represents debtors in actions against their creditors who have been  illegally harassed, threatened or even had money illegally seized from their accounts without court order.  Fortunately, the vast majority of the creditors and collection agencies seem to follow the law.  Some creditors, however, need to be held accountable to the court  for their collection tactics.

Many debtors decide to file for protection in Bankruptcy rather than defend a collection action.  This is an intelligent decision for debtors who owe other creditors substantial amounts that he or she is also unable to pay and the debtor's income is unlikely to increase substantially.  

Sometimes, debtors owe only a few creditors and would be able to pay their bills but for the creditor's harassment.  In these specific cases, debtors should consider vigorously prosecuting the creditors and their collection agents based upon their illegal collection attempts. 

In our experience, the cases which are worth pursuing usually have documents that corroborate the debtor's allegations of harassment.   Many but not all of these cases involve violations arising from the collection letters and Fair Debt Collections Practices Act notices themselves.

This section describes some of the relief available to debtors pursuant to the Fair Debt Collections Practices Act for debtors who are financially viable and want to defend themselves against illegal collection practices. 


What can I do if a collection agent is calling me?

If a Debt Collector violates the Fair Debt Collections Practices Act, the debtor can sue the Debt Collector and the creditor who holds the debt for actual and statutory damages.   The statute also provides that  prevailing debtors are entitled to receive reasonable attorney's fees and costs of prosecuting the action. 

Despite numerous lawsuits brought by consumers against creditors and Debt Collectors for violating the Fair Debt Collections Practices Act, Debt Collectors still violate the act frequently.   In order to provide consumers with some of the acts that may violate the Fair Debt Collections Practices Act, many violations are summarized below.

First, it is very important to understand who is a "debt collector" and is therefore a person subjected to the prohibitions set forth in the  Fair Debt Collections Practices Act.

Who does the Fair Debt Collections Practices Act regulate?

The Fair Debt Collections Practices Act ("FDCPA") and a similar Florida statute substantially limit the debt collection practices  that "debt collectors" can employ against consumers.  The term "debt collectors" excludes creditors (e.g., companies the consumer owes money to who attempt to collect the debt in their own name) but includes: 

  1. collection agencies;
  2. attorneys;
  3. creditors using a false name;
  4. purchasers of debt after default;
  5. debt poolers (for profit);
  6. suppliers of deceptive forms;
  7. creditors collecting for another person; and
  8. check guarantee services.



Consumer debts commonly include: dishonored checks, rent, medical bills, utility bills, insurance bills and claims, student loans, campground memberships, credit cards, condominium fees, and judgments.


What types of conduct does the Fair Debt Collections Practices Act prohibit? 

The Fair Debt Collections Practices Act prohibits Debt Collectors from harassing

debtors, making false statements, or engaging in other unfair practices.   

The courts and the Federal Trade Commission have found that Debt Collectors violate the Fair Debt Collections Practices Act by engaging in the following practices when attempting to collect a consumer debt:

  1. harassing, oppressive, and abusive conduct;
  2. threatening to contact third parties;
  3. leaving telephone messages  with neighbors when the Debt Collector could have reached the consumer directly;
  4. intimidating, belittling, and insulting behavior;
  5. calling the consumer at his or her place of employment to collect the debt after the Debt Collector received warning that the consumer could not take personal calls at work;
  6. threatening to use violence or other criminal means to harm the physical person, reputation, or property of the debtor;
  7. using obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.
  8. publishing a list of "dead beats";
  9. advertising a debt for sale if it is intended to coerce the consumer into paying the debt;
  10. using false, deceptive, or misleading representations or means including:
    1. threatening to file suit if:
      1. the Debt Collector does not intend to file suit when the threat was made;
      2. the Debt Collector does not intend to file suit as soon as is represented in the letter;
      3. the Debt Collector's contract with the holder of the obligation did not provide for filing suit when the Debt Collector threatened to file suit; and/or
      4. the Debt Collector did not have the authority to file suit.
    2. threatening to refer the file to the creditor for legal action;
    3. threatening to report the debt to a credit reporting agency or otherwise harm the consumer's credit  rating.
    4. contacting third parties about the debt;
    5. mentioning or describing post judgment remedies before suit is filed (e.g., threatening to garnish the debtor's pay check);
    6. sending mass mailings of dunning letters on attorney letterhead by a collection agency staff although the attorney has not reviewed the file;
    7. using a false or deceptive name by a collection agency or a creditor;
    8. misrepresenting that the Debt Collector had widespread offices or affiliates;
    9. filing a false affidavit in a debt collection suit;
    10. falsely stating that they had investigated the consumer's assets;
    11. lying about the rights that the creditor would obtain upon filing the collection suit; and/or
    12. impersonating a lawyer.
  11. falsely representing or implying that the Debt Collector is affiliated with the United States government.
  12. falsely representing the character, amount or legal status of a debt:
    1. claiming that the consumer owes a debt for unordered merchandise;
    2. attempting to collect a debt after the applicable statute of limitations has expired;
    3. attempting to collect a debt from persons who are not obligated to pay (e.g., spouses who did not agree to pay for a debt);
    4. attempting to collect debts that were discharged in bankruptcy;
    5. continuing to attempt to collect the debt after the consumer has informed the Debt Collector that the consumer disputes owing the debt;
    6. threatening to immediately garnish the consumer's wages when the creditor has not obtained a judgment;
    7. stating or implying that the creditor has filed a lawsuit when suit has not been filed;
    8. attempting to collect fees which are not permitted by law;
  13. falsely representing the services that the Debt Collector has provided or the compensation that the Debt Collector is entitled to;
  14. falsely stating or implying that a person is an attorney or that a letter or call comes from an attorney;
  15. threatening or implying that failure to pay will result in arrest, imprisonment, garnishment, attachment, seizure, or sale when such action is unlawful or is not intended;
  16. threatening unlawful or unintended actions;
  17. falsely stating or implying that sale, referral or transfer of a debt will cause the consumer to lose a claim or defense to payment or the debt or become subject to any practice prohibited by the Fair Debt Collections Practices Act;
  18. falsely stating that the consumer committed a crime or engaged in other misconduct in order to disgrace the consumer;
  19. reporting or threatening to report false credit information;
  20. using or distributing written material giving a false impression of its source, authorization, or approval;
  21. using any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer;
    1. falsely threatening to file suit;
    2. misrepresenting the Debt Collector's authority to file suit;
    3. falsely threatening to report the consumer's debt to third parties, such as the consumer's neighbors, employer, or a consumer credit reporting agency;
    4. demanding full payment of an installment contract if the contract does not contain an "acceleration" clause;
    5. using letters that resemble telegrams to create a false sense of expense or emergency;
    6. misrepresenting that the Debt Collector only has authority to accept full payment of the debt;
    7. falsely implying that the Debt Collector is providing legal advice to the creditor;
    8. dunning persons who are not responsible for the debt;
    9. attempting to collect the debt without the required licenses; 
  22. failing to disclose that a communication is intended to collect a debt or that information received will be used for debt collection and that the Debt Collector is indeed a debt collector subject to the Fair Debt Collections Practices Act;
  23. falsely stating or implying that accounts were transferred to an innocent purchaser for value;
  24. falsely stating or implying that documents are a summons or other legal process;
  25. falsely implying that a Debt Collector operates or is employed by a credit reporting agency;
  26. using unfair or unconscionable means to collect a debt:
    1. threats to advise a creditor to sue, when such counseling constitutes unauthorized practice of law under Florida law;
    2. dunning letters sent by Debt Collectors on law office stationery but which are actually sent by an "in-house" lawyer or signed by an outside attorney who had not reviewed the file;
    3. collecting amounts not permitted by law;
    4. accepting a check post dated by more than five (5) days unless the Debt Collector provides written notice of the Debt Collector's intent to deposit the check not more then ten nor less than three days;
    5. soliciting any post dated check for the purpose of threatening criminal prosecution;
    6. depositing or threatening to deposit any postdated check prior to the date stated on the check.
  27. repossessing or threatening to repossess collateral when the creditor does not have the right or intent to repossess or the property is exempt from repossession;
  28. sending a post card to communicate about a debt; or
  29. using any language or symbol, other than the Debt Collector's address, on any envelope in the mails; but, a Debt Collector may include its business name if the name does not indicate that the business is attempting to collect a debt.

What relief can the courts award me?

Prevailing debtors are entitled to receive their actual damages and up to $ 1,000 in statutory damages regardless of whether the debtor suffered actual damages.  Actual damages commonly include pecuniary losses such as lost wages, the cost of obtaining an unlisted telephone number, and physical injuries such as heart attacks, ulcers, vomiting, insomnia, and other injuries.   Additionally, the courts often award damages for emotional distress.  Successful debtors are also entitled to reasonable attorney's fees and costs.


How much time do I have to sue a creditor for violating the Fair Debt Collections Practices Act?

The Fair Debt Collections Practices Act allows debtors only one year from the date of the violation to sue their creditor and the Debt Collector.


How can I prevent the debt collectors from calling until I file Bankruptcy?

If the consumer has an attorney, the debt collector may not contact anyone other than the attorney.   The law firm will accept communications (via facsimile) from our clients' creditors for a reasonable period of time (usually approximately sixty days) while the clients are sending us the funds necessary to pay for their attorney's fees and filing fees. This provides  the clients some peace and quiet until their Bankruptcy Petition is filed thereby affording them the protection of the automatic stay of the Bankruptcy Code. 

How does Bankruptcy stop harassment?

Upon filing the Bankruptcy petition, debtors are protected by the automatic stay.   The automatic stay is an injunction against creditors from knowingly pursuing any action to attempt to collect a debt including any attempts to execute judgment, repossess or foreclose collateral, garnishment, etc. 

The automatic stay does not stop certain types of lawsuits.   The most common of the lawsuits that may continue are:   (1)  the commencement of or continuation of any criminal actions against the debtor;   (2)  collection of alimony, maintenance or support from property other than that of the bankruptcy estate;  (3)  modification of or initiating an action seeking alimony, maintenance or support;  (4)  governmental and police actions; and  (5) assessment of taxes or the issuance of a tax deficiency notice.    The Bankruptcy Code (Section 362(b)) contains other exceptions but these exceptions rarely arise in personal bankruptcies.

Creditors can request that the bankruptcy court dissolve or "lift" the automatic stay by filing a motion with the Bankruptcy Court.   Unsecured creditors are seldom, if ever, entitled to relief from the automatic stay in Bankruptcy.

Secured creditors may request that the Bankruptcy court dissolve the automatic stay as to their attempts to foreclose, repossess or sell the collateral.   Quite frequently, creditors request relief from automatic stay when they are not entitled to it.  Experienced Bankruptcy attorneys are prepared to fight the creditors' overzealous attempts to foreclose on the collateral.

The Bankruptcy Court will routinely grant relief from the automatic stay to secured creditors when the debtor filed Chapter 7 bankruptcy and is behind on the payments to the secured creditor.  Unlike Chapter 13 Bankruptcy, Chapter 7 Bankruptcy contains no provision allowing debtors to catch up on their payments to secured creditors.

By granting relief from automatic stay, the Bankruptcy Court has permitted the secured creditor to continue its efforts to gain possession of the collateral and to sell it.   The Bankruptcy Court will not allow the creditor to seek a deficiency judgment.   If the creditor sustains a loss from the sale of the collateral, the creditor's loss may be treated as any other general, unsecured claim.  Generally, such claims are readily dischargeable in Bankruptcy.

In a Chapter 13 Bankruptcy, experienced bankruptcy counsel can assist the debtor from overzealous secured creditors who often seek relief from the automatic stay or dismissal of the Chapter 13 Bankruptcy.  As long as the Plan adequately provides for the secured creditor's claim and other requirements are satisfied,  a debtor in Chapter 13 Bankruptcy is allowed the opportunity to catch up on a secured debt and retain the collateral.  Many debtors save their homes through Chapter 13 Bankruptcies.


What can I do if a creditor continues to harass me after I file Bankruptcy?

Occasionally, overzealous creditors continue their efforts to collect the debt even after the debtor has filed Bankruptcy and the creditor has received notice(s) from the Bankruptcy court and/or the debtor's attorney.   Fortunately, this occurs in only a small but nonetheless significant number of cases.  

Mr. Petersen vigorously represents debtors in actions against their former creditors seeking damages for violations of the automatic stay when these cases arise.   Mr. Petersen and his assistants appreciate that many clients primary reason for filing Bankruptcy was to force their creditors to quit harassing them. 

Fortunately, the vast majority of creditors obey the automatic stay in Bankruptcy.   However, creditors fail to respond properly to notices and failed to make the investments in software and training of their employees required to provide back-up mechanisms for correcting these errors.  Usually, a brief letter will correct the problem.   Nevertheless, a few remaining creditors can't seem to follow the law until the Debtor serves them with pleadings to enforce the automatic stay and discovery to prove that the violations occurred and that the creditor willfully disregarded the Bankruptcy Code. 

Some clients have obtained substantial recoveries against creditors who violated the automatic stay protections of the Bankruptcy Code.  Some of these clients have recovered damages from more than one creditor. 

What can I do if a creditor continues to harass me after the Bankruptcy Court discharges my debts?

The law firm  also represents former clients and other persons who filed Bankruptcy but are being harassed by so-called "creditors" despite filing accurate Schedules which listed all of their creditors and having obtained a discharge of such debts.  Unfortunately, the "scavengers" who purchase old debt sometimes violate the discharge provision of the Bankruptcy Code by harassing former debtors with the intent to bully the debtor into paying a debt that was discharged in Bankruptcy.  Although these situations rarely occur, they represent a serious abuse of the law and should not be tolerated!

Many Bankruptcy attorneys do not want to devote the substantial effort required to vigorously represent their former clients against their former creditors for violating the automatic stay  or the discharge order.  Some of these attorneys refer their former clients who experience these problems to our offices.

If you are being sued or harassed by a former creditor that you listed in your Bankruptcy, you may contact the law firm



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