Have you received weird looking debt collection letters in the mail? Letters that say the debt is old and that the debt collector won’t sue on it or report it on your credit reports? Also, do these letters say the debt collector wants to settle the debt with you even though it won’t sue you or report it on your credit?
If you are getting these types of letters, we want to look at them! Please call our office that is most convenient for you and set up a free consultation so that we can look at these letters. You can also email them to us using the link below. Also, please DO NOT make any type of partial payment on an old debt until you review the letter with one of our lawyers! This is very important!!!
Click Here to Email Us Your Collection Letters
If you want to read more about why these types of letters may be a violation of the Fair Debt Collection Practices Act (FDCPA), please feel free to read on! If you’ve read enough, please contact our office nearest to you.
Why Do These Types of Letters Violate the FDCPA?
Our lawyers sue debt collectors under the Fair Debt Collection Practices Act (FDCPA). This law is a powerful law regulating exactly what debt collectors can and cannot do in trying to collect a debt. You can find the law here and read our previous blogs on this topic here and here.
The phone call collection harassment cases are straightforward and make sense. If you are being harassed over the phone by a debt collector or a debt collector is contacting your family or friends and harassing them and talking to them about your alleged debt, please contact us immediately so that we can review your situation with you.
The “G” Notice
It is the cases where debt collectors send letters to people trying to collect debts that are a little more nuanced and tricky. 15 USC 1692g proscribes what must be contained in a collection letter from a third-party debt collector trying to collect a debt. This is generally referred to as the “G” notice. Debt collectors sometimes try to get cute and tricky with all the requirements in the G notice that must be on a debt collection letter.
As the case law has developed in this area of law, it is clear that the courts do not like consumers to be misled by collectors sending misleading debt collection letters. This oftentimes happens when the debts are quite old. Consumers will know that it is a problem when they look at the debt and know that it is old and they have not heard anything about the alleged debt for several years. The way someone may know that there is an issue here is if the debt collection letter talks about the fact that the debt collector won’t sue on the debt nor will it report the debt to the credit reporting agencies. The letter will then continue on to talk about offering the consumer a settlement agreement and taking a small payment on the debt.
Do’s and Dont’s
If you get a letter like this, please don’t do anything and come and see us with the letter immediately! You may waive and lose important rights even by making a small payment on the debt! Many states have a similar law to Alabama’s law that says that making a partial payment on a debt revives the statute of limitations. This is a very big deal!
We have even had cases where a debt collector says that a partial payment was made in order to revive the statute of limitations and it now makes the debt collectible where the collector can never prove a payment was made and our client shows that no payment was ever made to the debt collector. All that was done is a phantom credit of $5 or $10 to the account and now the debt is revived!
Debt Collection Makes Recent News
The reason this has come to the forefront now is because of the recent case from the Seventh Circuit Court of Appeals. In Pantoja, the 7th Circuit Court of Appeals ruled that offering to settle a time barred debt violates the FDCPA. Importantly, following that decision, the debt collector applied for a Writ of Certiorari to the U.S. Supreme Court which denied it. This information from the Pantoja opinion sums up the issues concerning to the court:
The point of controversy here concerns efforts to collect consumer debts on which the statute of limitations has expired when the effort does not involve filing or threatening a lawsuit. Compare McMahon, 744 F.3d at 1020 (dunning letters offering to “settle” time‐barred debts could violate Act by leading debtors to believe the debts were legally enforceable); Daugherty v. Convergent Outsourcing, Inc., 836 F.3d 507, 509 (5th Cir. 2016) (effort to collect is not automatically unlawful, but letter violates FDCPA if it could lead unsophisticated consumer to believe her time‐barred debt is legally enforceable); and Buchanan v. Northland Group, Inc., 776 F.3d 393, 397 (6th Cir. 2015) (reversing dismissal on pleadings; offer to settle time‐barred debt could violate Act by failing to disclose that suit would be time‐barred or that partial payment would remove statute of limitations bar), with Huertas, 641 F.3d at 33 No. 15‐1567 7 (holding that attempt to collect a time‐barred debt was permissible if litigation not threatened), and Freyermuth, 248 F.3d at 771 (same).
Even without an express threat of litigation, such collection efforts offer opportunities for mischief and deception, as we explain below. We recognize that most states (though not Wisconsin, in this circuit) treat a debt as a debt even after the statute of limitations has run so that it cannot be legally enforced, at least if the defendant appears and asserts the affirmative defense. See, e.g., Buchanan, 776 F.3d at 396–97 (recognizing general rule); cf. Wis. Stat. § 893.05 (when statute of limitations expires, “the right is extinguished as well as the remedy”).
The creditor retains the legal right to appeal to the debtor to honor the debt out of a sense of moral obligation even if the legal obligation can no longer be enforced in court. Nevertheless, the opportunities for mischief and deception, particularly when sophisticated parties aim carefully crafted messages at unsophisticated consumers, may well be so great that the better approach is simply to find that any such efforts violate the FDCPA’s prohibitions on deceptive or misleading means to collect debts, § 1692e, and on “unfair or unconscionable means” to attempt to collect debts, § 1692f. The plaintiff does not argue for that broad rule here, however, and we can decide this case on narrower grounds.
We agree with the district court’s two reasons for finding that the dunning letter here was deceptive. First, the letter does not even hint, let alone make clear to the recipient, that if he makes a partial payment or even just a promise to make a partial payment, he risks loss of the otherwise ironclad protection of the statute of limitations. Second, the letter did not make clear to the recipient that the law prohibits the collector from 8 No. 15‐1567 suing to collect this old debt. Either is sufficient reason to affirm summary judgment for the plaintiff.
A. The Danger of Resetting the Statute of Limitations
We begin with the danger that a debtor who accepts the offered terms of settlement will, by doing so, waive his otherwise absolute defense under the statute of limitations. Only the rarest consumer‐debtor will recognize this danger. See, e.g., Buchanan, 776 F.3d at 399; McMahon, 744 F.3d at 1021; Pantoja, 78 F. Supp. 3d at 746; Debt Collection, 78 Fed. Reg. 67,848, 67,876 (Nov. 12, 2013) (advance notice of proposed rulemaking by Consumer Financial Protection Bureau).
Our lawyers have experience in suing debt collectors for deceptive letters under the FDCPA. We like to look at all debt collection letters from anyone who is receiving them. This applies to someone who is considering bankruptcy and for someone who is not considering bankruptcy but is only receiving collection letters on one or two debts.
Please gather up your collection letters and contact our office nearest to you so that we can set up a free and private consultation with one of our licensed attorneys in order to allow us to evaluate the debt collection letters you are receiving and your situation. When you come to us, please bring to us all of the letters and envelopes that you have. Remember to keep ALL of your collection letters so that we can look at them. Finally, DO NOT make any type of partial payment on an old debt as it will revive the statute of limitations! No one likes to get collection letters from debt collectors, so let’s see if we can do something about them!
Ron Sykstus is a Managing Partner of several of the Bond & Botes Law Offices throughout Alabama. He holds a Bachelor of Science from the University of Arizona, Tucson, and a Juris Doctorate from the Northern Illinois University College of Law. Ron has served in numerous positions throughout the U.S. Army and now utilizes his expertise in the areas of VA issues, security clearances, military law, and bankruptcy to assist his clients when they need it most. Read his full bio here.