At the beginning of this year, I wrote about the importance to debtors of scrutinizing their mail for lawsuit notices. According to a New York Times blog post, debt collectors were suing debtors, but when the debtors counter-sued, the creditors pointed to arbitration clauses in the original credit agreements, keeping debtors out of court. Many debtors’ mistake was failing to appear in court because they didn’t look at their mail carefully. Another reason it’s important for debtors to read their mail is that debt collectors’ notice letters to debtors sometimes violate the Fair Debt Collection Practices Act (FDCPA), which regulates how debt collectors run their businesses.
Section 809(a) of the FDCPA requires debt collectors to mail a special notice to debtors within five days of their initial contact with debtors—if they didn’t inform debtors of the information required by the notice already. The notice must contain five things:
- The amount of money owed by the debtor
- The identity of the creditor
- A statement to the debtor that he or she has thirty days to dispute the validity of the debt (in writing), and that if the debtor does not do so, the debt will be assumed to be legally valid
- A statement to the debtor that if he or she does dispute the debt in writing, the collector will send written verification of the debt or judgment to the debtor
- Finally, a statement telling the debtor the name and address of original creditor, if the debtor asks within the thirty-day period
Importantly, legal pleadings, like the lawsuit notices referred to in the NYT blog post, do not count as initial contact to debtors. Additionally, since we’re talking about the mail, section 808(7) classifies communications to debtors by postcards as an unfair practices.
The notice rules laid out in section 809(a) are quite specific, and it’s not uncommon for debt collectors to break them. For example, in April 2014 a New Jersey law firm settled a class-action lawsuit against its client’s debtors for $49,500. The firm simply told debtors that its client would sue if the debtors didn’t respond in thirty days. The letters did not inform debtors of their right to dispute the debts’ validity within thirty days, which is what the FDCPA requires.
As with lawsuit letters from debt collectors, debtors should be aware of notices they receive from them to enforce their rights. Breaches of the FDCPA can often result in damage awards, and I’ve even recovered money for clients in these circumstances. If debt collectors are breaking the law in their communications with you or if your debts are becoming too difficult for you to pay, then you should talk to an experienced New York bankruptcy lawyer.
For answers to more questions about FDCPA violations, bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced fair debt collection practices act Bruce Weiner for a free initial consultation.
