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Why Would a Debt Collector Ask for Confidentiality in a Lawsuit Settlement?

It’s not uncommon for debt collectors to break the law when trying to recover money from debtors. Usually, their actions run afoul of the Fair Debt Collection Practices Act (FDCPA) or the Telephone Consumer Protection Act (TCPA). Violations of these federal statutes and their New York analogues can result in compensation for you and even your attorney as well, which makes suing them all the more beneficial if this has happened to you. Sometimes, though, debt collectors don’t want to go through the hassle of a trial when they know debtors’ cases are solid, and instead they will offer to settle the cases. This is fine and good, but what if the debt collector asks for a confidentiality agreement regarding the facts of the case?

Whether stipulating to a confidentiality agreement is a good idea depends on what the collector doesn’t want you to discuss. If the debt collector doesn’t want you talking about the fact that you filed the lawsuit at all—even though it’s a matter of public record—it might be worthwhile to pass. The purpose isn’t so much to protect the debt collector from any harm, but instead its goal is to hope that you mess up. If you tell a friend or neighbor, write about your experience in an op-ed, or communicate about the case in some other way, the debt collection company will probably have a pretty decent case against you.

Another goal might be to hamper your lawyer’s practice. By signing this restrictive an agreement, your lawyer won’t be able to use what the debt collector in your case did as an example of what might happen in debt collection cases. Attorney advertising, conferences involving other lawyers, and public engagements would all be off-limits.

The other main type of confidentiality a collector might ask for concerns the amount for which you settled your case. This is more defensible. Yes, your lawyer won’t be able to use that in his or her advertising, but its goals aren’t to entrap you. Rather, it’s trying to ensure that other people don’t think it’s an easy target and will shell out large sums in settlements. You might not care so much about the debt collectors’ future legal problems, but whether you would want to accept this kind of agreement is your call, and probably won’t prejudice you further down the road.

For more questions about 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.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA

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