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 embarrassed, 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. If you are served with a debt collection lawsuit you need to reach out to an attorney as soon as possible to assess your options and any legal rights and defenses. 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.

 

RESOURCES RELATED TO DEBT COLLECTION

Fair Debt Collection Practices Act

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.

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.

North Carolina Debt Collection Acts (NCGS 58-70-15 and NCGS 75-50)

 

Under North Carolina’s state debt collection laws, consumers have even more options and legal rights.  The two key North Carolina laws, unlike the FDCPA, apply to persons and entities collecting on their own debts (i.e. original creditors.)  One law covers applies to collection agencies and provides a comprehensive list of rules they must follow in collecting on debts including documentation requirements when filing a civil lawsuit and seeking a judgment against consumers.  The other law applies to all other original collectors and is an expansion of the protections afforded consumers under the FDCPA.  Collection agencies and original creditors that harass North Carolina consumers may 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 that 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, forgiveness of the debt

Click here for some of the unfair and harassing debt collection cases attorney John O’Neal has handled.

If you need help in responding to a debt collector, contact attorney John O’Neal IMMEDIATELY to discuss your case.

SPECIAL CASE OF VEHICLE TITLE LOANS (North Carolina residents only)

If you are a North Carolina resident and you took out a vehicle title loan you may have valuable rights and defenses related to the loan debt. The interest rate and fees and terms on title loans can be outrageous and can cause sleepless nights and possibly even the fear of loss of your vehicle. When faced with a demand by a title loan lender, North Carolina residents should seek consultation with an experienced consumer law attorney before making any decision as to how to respond or proceed.  

Fair Credit Reporting Act

The FCRA is designed to provide for the accuracy, fairness, and privacy of information in the files maintained by consumer reporting agencies.  Consumers have valuable legal rights under the FCRA including:

Right to notification if information in your credit file is used against you
Right to access information in your credit file
Right to dispute inaccurate information in your credit file
Having verified inaccurate information removed from your while within 30 days of the dispute
Ensuring outdated negative information is not reported
Right to limit access to your credit report

The FCRA protects consumers from abuses and violations by credit reporting agencies, banks, and lenders. These violations include: 

Failing to report a discharged debt in bankruptcy
Reporting information older than 7 years
Reporting old debts as new

Reporting “mixed information” (having someone else’s credit information includes in your credit file/report)

As a consumer you should check your credit report periodically to ensure the information reported is correct.  If you see something inaccurate on your credit report, you have an obligation to contact the credit reporting agency and dispute the inaccurate item(s).  Each credit reporting agency is supposed to provide you with notice of your right to dispute inaccuracies and also tell you how to file your dispute. 

If you need to dispute errors on your credit report, submit a letter or complete the preferred form disputing the errors and send certified mail, return receipt requested to ALL of the following addresses:

Experian Information Solutions
701 Experian Pkwy
Allen, TX 75013

Equifax Information Services
P.O. Box 740256
Atlanta, GA 30374

Trans Union
P.O. Box 2000
Chester, PA 19022

 

 

For more information on the dispute process, click here.  Be sure to keep copies of all materials you send to the credit reporting agency as the materials will not be returned to you.  If you believe your rights under the FCRA have been violated or need assistance in dealing with a possible credit reporting issue, contact the O’Neal Law Office today.