Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act (FDCPA) is a law that was enacted by the federal legislature to help curb abusive debt collection practices such as harassing debtors by frequent telephone calls, making threats, etc. For NO UP FRONT PAYMENT TO THE LAWYER and just a little work on your part, you can get rid of the debt collectors telephone calls yourself for the cost of postage in sending each of them a certified letter, return receipt requested. If they do not stop calling you after they sign for your letter, I can sue them for calling you, and THEY, NOT YOU have to pay my attorney’s fees for that lawsuit! In addition, they owe you a one thousand dollar fine ($1,000) for breaking the law. Generally, if you want us to do so, we negotiate with the creditor to discharge the debt you owe them instead of having them pay you the $1,000, and then the debt is gone forever without any payment from you.

The FDCPA applies to debt collectors who are collecting a debt for someone else, such as collection agencies and debt collection lawyers. There is another law that applies to the original creditors, the Florida Consumer Collection Act. This law protects you from harassment by creditors when you have an attorney representing you and they are made aware of the attorney’s name and contact information. To cover both the debt collectors and the original creditors, we provide you with a form letter to fill in your name, address, last four digits of any credit card number you are being called concerning, and the caller’s file number, if any, sign at the bottom of the letter, and mail it by certified mail, return receipt requested. Make a copy of the letter after you fill it in and when the green certified mail card comes back, staple it to the back of the letter. Do this for each debt collector or creditor who contacts you about a debt.

Thereafter, if you receive a collection letter from the caller, or you get multiple phone calls from the company you sent the certified letter to, please provide me with a copy of the letter you sent and a copy of the certified mail receipt (green card) and the information about the calls (date, time, who called from what company and anything the caller says) to me. I use these documents to file a lawsuit against the company for contacting you about the debt after you told them not to contact you. The company contacting you is responsible for my attorney’s fees and costs, NOT YOU.

The company often calls us immediately upon receipt of the lawsuit and seeks to settle the case, because the more work I do, the more they will have to pay me when I prevail in the case. As a result, we often do not need to subpoena telephone records to prove the calls they made after receipt of your "cease and desist" letter. Sometimes we will have to have a copy of your phone bill or subpoena the telephone company to prove when and how often the calls were made to you.

What happens if the debt collector or creditor receives the letter and does NOT call again? Because they can’t call or write and ask you for payment, their only alternative is to file a lawsuit to prove you owe the money. A process server will come to your home or work and hand you the lawsuit paperwork. If you do not respond, it will take a couple months until the lawsuit is decided. If you do owe something, the judge is likely to enter a judgment stating you owe whomever X amount plus attorney’s fees, costs, and interest. This judgment is good for ten years and renewable for another ten. If you are retired on a fixed income and not likely to ever be collectible, it doesn’t matter if they have a judgment, because they can’t collect on it.

If you are working or have money in the bank or paid off vehicles, boat(s), or RV(s), you could have your wages garnished, money in the bank garnished, or lose personal property to pay the debt, unless you file for bankruptcy to void the judgment. This is therefore a good remedy only if you are not collectible.

So what does it mean to be collectible?

Your home is protected from unsecured creditors such as credit cards and medical debt if you have owned and lived in it for at least 3 ½ years, or two years if you owned and lived in a previous Florida home. That means a credit card company or a medical creditor cannot foreclose and force sale of your home in order to get paid. (Your mortgage company or someone who works on your home and files a mechanics lien however, can foreclose if not paid.) You are also entitled to keep up to one thousand dollars in equity in a vehicle and one thousand dollars in personal property (household goods at auction prices: appliances, furniture, jewelry, sporting goods, cash, money in the bank, clothing, stocks, bonds, etc. [anything that is not real estate].)

You are "not collectible" if your home is exempt as described above, and if you own less than this $2,000 in personal assets, and you don’t have wages that can be garnished. If you are "head of household" making $750 a week or less before taxes, you are exempt from wage garnishment though you have to prove this as a defense if garnished.

The typical ways creditors try to collect a debt are by garnishing your wages (and there are exemptions for social security, disability, unemployment, and other forms of income), taking money from your bank account, or taking your paid off asset to sell it at auction subject to any lien. A spouse does not owe for his/her wife or husband’s debt unless (s)he signed for it, such as both signing the application for a credit card.

Typically, the person who is seeking to get rid of a debt is the person who is not collectible. Once the debt collector is certain the debtor is not collectible, they lose interest in trying to collect, however, they are trained not to believe you if you tell them you can’t pay, so don’t expect to just say so for them to go away.

If you ARE collectible (have wages that can be garnished, a paid off vehicle, boat or RV that can be attached and sold, or money in the bank that can be garnished, etc.), they may decide to sue you to prove to the court that you owe the debt and obtain a judgment so they can legally collect the debt by garnishment or attachment. The process server will serve the lawsuit on you, (unless they can’t find you, in which case they can publish service instead), and from that point on, it takes a couple months for them to win the case if you do nothing.

If you are not collectible, they will usually drop the suit once they realize that, because they are spending money for a lawyer to prove you owe the money when they aren’t likely to get paid later on.

If, however, you are collectible, they will likely get a court order at the end of their lawsuit called a "Judgment" which is a document that gives them the right to collect the debt, plus attorney’s fees, costs, and interest, for the next ten years. It is renewable for another ten years, and accrues interest the whole time. This can lead to a huge debt later on unless you file for bankruptcy to extinguish it.

If bankruptcy is an option for you, it has huge advantages. If your income is below median for your county, according to the U S Census bureau, you may be eligible to file a Chapter 7 bankruptcy. An administrative court order has determined what the reasonable attorney's fees are for the standard case and there is a filing fee the current amount of which is available at the court's website. Although I can accept payments, it is more expensive to file this way as I must charge an administrative fee to track those payments and charge an hourly rate to deal with creditors and debt collectors if any contact us while you are making the payments. In a chapter 7 bankruptcy, you can KEEP your home if the mortgage payments and taxes are current and kept current, and the same goes for your vehicles as long as the equity in them does not exceed $1,000 per person. ($1,000 for wife, $1,000 for husband, and their names must be on the registration). If you vehicle has equity of more than $1,000, you can still keep it, but you would have to pay the court the value of the exemption that exceeds $1,000 each for the benefit of your creditors. In a chapter 7 bankruptcy, the law states you must pay what you can afford to pay before the court discharges the balance, and the assets you own that exceed $2,000 each ($4,000 for a married couple) is considered money you can pay toward your creditors. I like to give this example to illustrate. Say you had a brand new Ferreri or other expensive vehicle, all paid off. The court is not going to discharge your unsecured debts unless you first sell the car and use the money to pay your creditors or pay the court the value of the car that exceeds the exemptions you are entitled to keep. The law does not want you to go on welfare, so they allow you to keep just barely enough to get started again, that the amount is $1,000 of vehicle equity and $1,000 of personal property plus your exempt homestead of any amount. If you do not own a homestead, you can take up to $6,000 each in exempt property which is $12,000 for a husband and wife.

Preferential transfers and fraudulent transfers. The law anticipates that some people might try to keep their paid off Ferreri from the creditors by giving it to their relative or friend before filing for bankruptcy, so they have developed consequences for making such transfers in the two years before the bankruptcy filing date. You must disclose whether you have bought or sold or given away anything valuable in the two years before you file for bankruptcy. If you fail to disclose it, you could end up in a federal prison. It is a felony! If you happened to have sold something in the past two years and used the money to pay usual household expenses, that is okay. For example, say you sold one of the family’s two vehicles three or more months before you filed for bankruptcy to pay for housing or food or utilities, and got fair market value for the sale. This is not likely to cause any problems.

There is a presumption of abuse of the filing for bankruptcy if you use your credit cards or buy things in the three months before you file for bankruptcy. The law assumes you knew you did not have the means to pay for the item charged or purchased but bought it anyway. The creditors can object to this and the amount may become non-dischargeable in bankruptcy. In other words, the bankruptcy may still be valid, but the particular debts are still owed. Also non dischargeable are most taxes, child support, alimony, lawsuits for injuries to persons where you were charged with DUI, and some other debts.

A chapter 13 bankruptcy requires the same documents as a chapter 7, but is required for most people who earn more than the median income for family size, and you must make monthly payments to the court for a period of five years. It has some distinct advantages such as saving your home from foreclosure when you are not current on your mortgage, cramming down the balance owed and/or interest rate on your vehicles that you have owned for more than 920 days, stripping off second and third mortgages on your home that have become unsecured due to the value of your home falling below the balance owed on your first mortgage, etc. The court’s administrative order sets the attorney’s fees, the cram down(s), any special circumstances such as self employment, repossessions, multiple judgments, etc. Half of the fees and the filing fee must be paid in advance before we start to work on your case, and the other half of the fees are paid in your repayment plan. Chapter 13 allows you to keep more property than what is exempt in a chapter 7, but you must still pay the value that is over the exempt amount. You have years to pay it, however.