We’re settling a lot of FDCPA cases every month and frequently I speak with clients about how they are going to use their settlement funds. Sometimes, clients use the funds for necessary expenses; food, clothes, housing, etc. Sometimes, but rarely, my clients share that they are going to use the money to purchase something questionable (in my eyes) such as a new flat screen television, down payment on a new car, etc. I am not in the position to judge anyone, however, I always try to get my clients to spend their money on something that will change their lives. A television will temporarily entertain, however, what if they would spend their money on something that would make “tomorrow” completely different than today……

What if I told you that if you gave me $1,500.00 of the money you received from your FDCPA settlement and I could use that money to pay off thousands of dollars of your debt? What if I told you a client gave me their $1,500.00 and I turned that $1,500.00 into the ability to discharge over $100,000.00 of the debt that they previously incurred? Its likely you’d think I was trying to sell you something that wasn’t real, and would turn me into the Federal Government. However, I am being completely honest.

People have different ideas about Bankruptcy; some view it as a second chance and some view it in negative light. I can tell you this; dozens of millionaires out there have filed for bankruptcy more than once. Additionally, as the news daily points out, our largest corporations are seeking bailouts and are using bankruptcy to get back on their feet. Why shouldn’t you use the same tools?

If you contact me and you have a collection agency that has violated the FDCPA, I will get you money (assuming the collection agency hasn’t filed for bankruptcy in the meantime which is becoming more frequent). Be thinking now how you want to use that money. My suggestion, obviously, is to use the money to create a new tomorrow; get a fresh start. Visit www.legalhelpers.com for more information on bankruptcy.  Tomorrow doesn’t have to be another day; it could be your second chance.  If you don’t have another viable long term plan; make one.  If you don’t plan for anything, don’t expect anything to change.

Jeffrey S. Hyslip

As many of my readers know, I used to be a debt collector/collection attorney between 2003 and 2007. I’d sue consumers and get judgments awarded for my clients (creditors). Once the judgment was awarded, we’d search various databases to determine what assets the consumers possessed that I could execute on to enforce the judgment. The three main assets I searched for were (1) wages, (2) bank accounts, and (3) real estate.

Whenever I found real estate, I got really excited. I would pay the $33 to file a certificate of judgment against the consumer which would in turn place a lien on the consumers real property (house). When a lien is recorded/filed, it is placed behind all previously filed liens (Mortgages, etc.). Back in the heyday of the real estate market, I’d routinely get checks in the mail from title companies paying off the liens that were filed. You see, when a consumer with a lien would re-finance or sell their house, the liens that were on the house would get paid before the proceeds were dispersed to the consumer. Since homes were appreciating, there was regularly enough equity to pay off the mortgage company and lien holders.

Now, that has changed. Consumers are upside down on their homes and it is rare there is any available equity to justify placing a lien on real property. So, now we get to the point; anytime a collection agency threatens to place a lien on your home (unless your home is paid for or has SIGNIFICANT equity) they are most likely lying to you (not to mention the fact that collection agencies CAN’T put liens anywhere since they are not attorneys). So, since there is no justifiable reason to place a lien on a home that doesn’t have equity that means its unlikely anyone will place a lien on your property. As such, if a collection agency threatens you with (or mentions) a lien, they are lying to you. It is illegal for collection agencies to lie under the FDCPA. As such, if a collection agency mentions a lien, they have violated the FDCPA.

At least there is ONE upside to the housing crisis - No More Liens!

-Jeffrey S. Hyslip

The FDCPA prohibits debt collectors from harassing or misleading consumers while collecting debt.  However, the only debt that is covered under the Statute is Consumer debts.  The FDCPA defines Consumer debts as debts incurred primarily for personal, family or household purposes.  Therefore, if you incur a debt for your business, the debt collector is not covered by the FDCPA.  Congress assumed that if someone was sophisticated enough to run and operate a business, then they were most likely able to decipher when a collection agency was making false threats, etc.  If you have a question regarding whether or not the debt you have incurred allows FDCPA protection, feel free to contact us at 866-339-1156.

Jeffrey S. Hyslip

A lot of times we get calls from clients who complain about a collection agency harassing their family members, friends, neighbors, co-workers etc.  For example, we hear them say things like, “They called my brother who lives in Connecticut!  I don’t even know how they got that phone number!”  More often than not this is a case of skip tracing.  Skip tracing is a process of pinpointing a person’s whereabouts.  Collection agencies typically use skip tracing programs in order to locate a client to collect a debt.  Essentially, they are able to type in the client’s name and pull up information on the client, including contact information for family members, neighbors, place of employment etc.  The act of using a skip tracing program is not considered a Fair Debt Collections Practices Act violation.  Collection agencies are allowed to use skip tracing programs, however, who they contact, how frequently and/or what they say to that individual may be called into question under the FDCPA.  Sometimes, if the collection agency is already in communication with the client, but is having difficulty collecting on a debt, the agency may contact a third party person as a means of embarrassing or scaring the client into making a payment to them.

Under the FDCPA, a collection agency is only allowed to contact one third party person one time to obtain any contact information needed to reach the client directly.  Therefore, if a collection agency contacts a third party person more than once or multiple third party individuals, this would constitute a violation.  If the collection agency has already made contact successfully with the client, then at that point, it’s unnecessary for them to be contacting anyone else.

In our department, our logic is that, if a collection agency has the ability to utilize a skip tracing program to get in touch with a client’s friend, family member and/or neighbor, then they certainly have the ability to employ this skip tracing program to locate the client directly.  Nonetheless, if you get wind that a collection agency is calling anyone other than yourself regarding your debt, than I strongly encourage you to contact our department.

Megan F.