Lake Forest Bankruptcy

YOU ARE ALWAYS ELIGIBLE TO FILE FOR BANKRUPTCY PROTECTION!  However, you may not be able eligible for every type of Bankruptcy relief available.  Your eligibility will depend upon many factors such as:
1. Have you previously filed for Bankruptcy?
2.  What is your current income?
3.  What is the value of your assets?

 The choice of relief can be a complicated process, and our law firm can assist you with that process.

A client of mine recently received a letter similar to this from an attorney regarding an alleged debt. It is amazing how many attorneys send similar letters. They charge their long-time client $25 or $50 to send a "simple" collection letter for a small debt. They pull up the trusty collection letter on the computer, fill in the new information, and drop it in the mail. Maybe their client will get paid, maybe not. The client doesn’t have much money in the effort to collect, and the attorney doesn’t have much time in it. Simple. Or perhaps not. The attorney may now be the defendant in a FDCPA action.

Since 1986, the Fair Debt Collection Practices Act ("FDCPA" 15 U.S.C §§ 1692 et seq.) has applied to attorneys who regularly collect consumer debts. The attorney who wrote this letter clearly was not aware of this applicability. This article will outline some of the more common FDCPA violations. However, if you send any collection letters, or make any telephone calls to attempt to collect debts, it is imperative that you become familiar with the FDCPA. It is a short read, and it applies to you and your collection efforts.

The most glaring defect in the letter received by my client is the absence of language advising, "This is an effort to collect a debt, and any information obtained will be used for that purpose." This disclosure is required in the initial written communication with the debtor, and in addition, if the initial communication is oral, in that initial oral communication.

The letter also fails to alert my client that he has thirty days to dispute in writing the debt or any portion thereof. Once my client disputes the debt in writing, the attorney must cease all collection activity until the debt is verified and a copy of the verification is mailed to him. Arguably, even if this disclosure was included, advising my client that he must pay the full amount within seven days obviates the required disclosure. The standard used in reviewing FDCPA violations is the "unsophisticated consumer" —— one who is uninformed, naive, trusting, possessing below average intelligence. To say to a debtor, "You have seven days to pay up or you will be sued, but you have thirty days to dispute the debt," is confusing to someone who is informed, sophisticated in financial affairs, cynical, and of above average intelligence. All of your collection communications should be clear and simple.

The FDCPA has strict and encompassing prohibitions on misrepresentations. Unless the attorney actually "immediately instituted suit" after seven days, there was a potential FDCPA violation. The FDCPA states that it is a violation to threaten to take action that cannot legally be taken or is not intended to be taken. The attorney who wrote this letter should be certain that this $500 claim would be litigated before making such an affirmative statement. The attorney should also ensure he or she is licensed in the jurisdiction where my client resides or where he signed the contract sued upon, if in fact there was a contract. The FDCPA mandates that legal action on a debt must be brought in one of these locations —— if the attorney is not licensed in such a location, there is a misrepresentation regarding the ability to bring suit. Unless there was an agreement between the parties regarding interest and attorneys fees, the demand for the same is a false or misleading representation of the character, amount, or legal status of the debt.

The penalties for violation of the FDCPA can be steep, especially in comparison to the small amount generally alleged to be due. The attorney who wrote to my client could be liable for my client’s actual damages, $1,000 in statutory damages, and the costs of the action. In addition, in the event my client is successful in recovering any of the above, he is entitled to recover his reasonable attorneys fees. In the case of a class action, recovery is limited to $500,000 or one percent of the net worth of the attorney. It is important to note that actual damages are not required in order to recover statutory damages and attorneys fees.

The FDCPA is a strict liability statute. Intent or malice is not required to support a FDCPA claim. It is important therefore for any attorney who engages in any collection work to be eminently familiar with the provisions of the FDCPA. The thirty minutes you spend with this brief statute is time well spent.

Does this look familiar?

Please be advised that this firm represents Creditor. Demand is hereby made for the sum of $500.00, plus interest in the amount of $25.00, and attorneys fees in the amount of $100.00. Unless said sum is paid in full to the undersigned within seven days, we will immediately institute suit for the full amount due and payable . . . .