There’s news reports that debt collectors are getting pushier and pushier in trying to collect debts – something that comes as no surprise to Florida foreclosure defense lawyers, where clients are routinely having to deal with debt collection practices – on the phone, in the mail – sometimes, for the first time in their lives. Debt collectors can be difficult to deal with in the best of times, and for those facing the loss of their family home in a Florida foreclosure lawsuit or through a short sale to avoid a foreclosure, these collection practices can be very, very emotionally draining and life intrusive.
Abuse in Debt Collection Running Rampant in This Country
This month, the FTC (Federal Trade Commission) announced that it has seen a jump of almost three-fourths the number of complaints it used to get on debt collectors from citizens around the country (up 73% from 2008 to 2012). It’s a fact that debt collection is a booming business in today’s bad economy.
For people fighting against losing their home to foreclosure, they will eventually have to deal with some questionable debt collection practices regarding that mortgage or home loan. We’ve posted about that before.
And, many Floridians fighting foreclosure are also having to deal with debt collectors calling on other debts too — things like car notes or student loans or credit card bills. Why? For many home owners, life has been about juggling which bills to pay: the mortgage or the credit card or the student loan or the car loan and often, more than anyone would like, they are behind on more than one debt obligation.
The actions of some debt collectors seem like something fictional, too abusive to be real — but they are true. Consider the following, as described by an actual debt collector:
- collectors talking to children who answer the phone, doing things like telling them their daddy is going to jail the next day;
- collection agencies taking out default judgments against people who have never been served with notice of any lawsuit being filed against them;
- collectors calling people who are grieving the loss of a spouse or child or parent to collect on a bill;
- collectors not bothering to check to see if the debt has already been paid; and
- felons (that’s right) acting as debt collectors – including those involved in identity theft.
Larry Tolchinsky’s Tip:
It doesn’t have to be this way. Bill Bartmann has written an article for the Christian Science Monitor that is making its way across the country, where he explains how and why he and his wife, Kathy, started their own debt collection business where they are dedicated to helping work out debt payments for creditors with debtors in a reasonable and respectful manner.
If the Bartmanns can do it, then others can — and should — follow their lead. The sad truth is: most don’t.
Example of Abuse: Default Judgments in Lawsuits Without Notice
Here’s one big bad abuse that is very popular: the default judgment. In Florida, the statute of limitations for collection on a debt is five (5) years. Florida Statute 95.11. After that, there is a solid bar against the collection of that debt: the legal defense that the statute “time bars” the contract claim from being pursued any longer. In other words, a collection lawsuit filed any time over that five years has missed its deadline. It’s no good.
Problem is: this is a legal defense that has to be legally asserted. The debtor must file paperwork in the lawsuit that asserts this defense. No, the judge does not do this for you. If the statute of limitations isn’t asserted as part of the debtor’s defense in answer to the claim filed by the creditor, then the court will issue a “default judgment” against the debtor for the amount asserted in the claim — including interest.
Abuses are happening in Florida and elsewhere where these default judgments are being handed down in courts where the debtor doesn’t know that the lawsuit has even been filed. Creditors are not properly serving the debtor – sneaky stuff.
Example of Abuse: Re-Aging Debts
Here’s something else: creditors may not be able to sue any more on a debt because it’s time barred, but they may still keep calling and writing, demanding payment. Why? Even though they are well aware that any lawsuit they filed would be past the deadline, they are hoping that you will “re-activate” your debt by doing something that will bring it back to life.
That’s right: there are ways that the law will allow “dead” claims to come back to “life” — if you start paying on that old debt, for example, then the creditor may argue that there’s a new contract in place and the date that you sent a payment started the time clock all over again. Of course, no debt collector ever explains this to anyone in writing or on the phone. This is so popular across the country that there’s a name for it: it’s called “re-aging the debt.”
If the debt collector you’re dealing with is not being reasonable or respectful, then the next question is whether or not the actions are illegal under either state or federal law. Don’t be afraid to ask a Florida lawyer about your personal situation or contact the Florida Attorney General to file a complaint against the company. Our firm answers questions about these issues all the time. You are not alone in protecting yourself and your family against abuse in debt collection practices, but you do have to take that step of asking for help and advice those who care. It’s just a phone call or an email away.
Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at firstname.lastname@example.org, or (954) 458-8655.