DEALING WITH DEBT COLLECTORS, PART 2: COMMON TRICKS AND SHADY PRACTICES
By Attorneys Jeff & Patty Williams
Some Collectors Sue For A Debt That Is Too Old To Collect Legally.
Here in Georgia, six years after you first failed to pay, the debt is no longer collectable, as it is past the Statute of Limitations. So, some collectors just report the old debt as though it were a current account. We attorneys often call this “Zombie Debt" – it’s dead, but sleazy collection firms which buy old debt very cheap from other collectors attempt to bring it back to life.
Even worse, they may claim that you contacted them about the debt, or made a payment (yes, sometimes they actually report that you “made a payment" – most typically, for $25) less than six years ago. (Note: if you do make a payment by check on an old debt, which mentions the account number, or says “payment on account," etc., the collector can introduce that check into evidence as a “writing" testifying to the validity of a debt which can, in fact, revive the debt; so be very careful.)
Why would a collector’s law firm try to collect zombie debt which could be easily defended against in court? Because so many people don’t bother to answer and fight the lawsuit, either being in denial, or not wanting to deal with it, or assuming they’ll lose anyway, or not being properly served and having no notice. So, the age of the debt never comes before the court as an issue. Literally thousands of people lose these lawsuits every year because they don’t answer and fight them, so the other side wins an easy default judgment against them on an old debt that could have easily been defended against. The next thing you know, your wages are garnished or your bank account drained, based on the default judgment because you didn’t bother to get an attorney to fight it on time. Because so many people do not fight, there is a whole industry of bottom-dweller collectors who live comfortably off “zombie debt" which by law is not even collectable if the intended victims would only check.
Some Collectors Will Sue You Without Giving You Proper Notice.
They may file a false affidavit stating you were served. Or, they may serve you “by publication," which means they swear to the Court they could not find your current address, or that you fled the county, etc., so they put a legal notice you are being sued in the county’s legal newspaper. Depending on what county you live in, this legal newspaper may be a major paper, or it may be a tiny obscure paper nobody much reads that makes most of its revenue publishing legal notices. Worse yet, we have seen cases where they “served by publication" in a county the debtor has never lived in.
Since you have no effective notice of the lawsuit, you cannot file an answer within 30 days and then have an attorney argue successfully at trial, so they can and will get a default judgment against you. Then they get a Writ of Fieri Facias (FiFa) issued, and miraculously find your correct address, and garnish your bank account, or maybe put a lien on your house. Or, they locate your employer’s address, and garnish your wages.
Usually, in these cases, the first you are aware that there ever was a lawsuit is when your employer is served with garnishment papers or you find that the bank has frozen the funds in your account. If you try to fight the garnishment, they just tell the court that they have a FiFa based on a default judgment. If you try to protest that you sent them a certified letter, that you were not served, etc., they will just say that you had a chance to argue all that in court before, and didn’t bother to answer, so those things are irrelevant to the garnishment. So if you become aware of a garnishment, immediately hire an experienced lawyer to see if it can be stopped. Sometimes it can. (Statistics tell us that if you attempt to fight this without an attorney, you will almost certainly lose.) If you need to know more about garnishments, see our Legal Guide “Stopping Garnishments," elsewhere on this site.
Some Collectors Will Pretend To “Really Care" About You And Say They “Want To Help You Work Things Out."
This is not the time to tell them your life story. Don’t waste your breath. They don’t care two flips about your problems, or your overall financial situation. They just want your money. They’ll never tell you that you should pay your mortgage, taxes and insurance first, then your car note and utilities, then gas, food, etc., and only then all other debts. They don’t care if you are a blind, crippled abandoned spouse living alone on Social Security. They just want your money because most collectors get paid a percentage of every dollar they wheedle out of you.
Some Collectors Will Try To Put You On A Guilt Trip.
They will play on your sense of duty to pay your bills, even when it isn’t possible. Yes, decent people want to pay their bills, but sometimes a layoff, cut hours, an extended illness, being deserted by your spouse, or other unplanned events can leave you short. Even if you don’t have anything left to pay them after providing shelter, food, and the basics for your family, they will play on the fact that you already feel bad about being behind, and say that “good people pay their bills; you’re not a bad person, are you?" They don’t care if your mortgage or rent is overdue and the baby needs milk; they just want your money now.
Some Collectors Will Give You False Information.
Collectors sometimes deliberately give you incorrect information about filing bankruptcy, court or garnishment procedures, your legal rights, etc. in an attempt to get more money out of you. For example, they may tell you that you do not qualify for bankruptcy, or that bankruptcy is no longer possible for your situation, or that they are going to garnish your wages if you don’t make a payment right away, when they have not even filed a lawsuit against you, which they must do, and win, before any garnishment is even possible. Never take a collector’s word for it regarding any of your legal rights, obligations, or possibilities. Speak to an attorney who’s on your side to get correct information.
Some Collectors Will Threaten You, Exaggerate, Or Lie.
Sleazy collectors will sometimes make illegal threats they cannot carry out, such as claiming they will have you arrested and taken to jail. We have even heard of cases of collectors claiming they will come to take the debtors’ children! Don’t believe them. Remember that collectors are not under oath, and they do not have to follow through on any verbal promises they may make to you. Don’t waste time “negotiating" with liars.
Some “Collectors" Are Not Even Real Collectors At All, But Just Brazen Crooks.
Sometimes you get “collection" calls from a very pushy person, often with a foreign accent, who demands you wire him an immediate payment. He knows your name, address, Social Security number, perhaps bank account or credit card numbers, and he insists on payment the same day, perhaps even within the hour. He is probably an identity thief, pretending to be a collector. Simply tell him to put his demands in writing within five days, as required by the Fair Debt Collection Practices Act. Then tell him not to call you anymore, and hang up. (Or, if you prefer, laugh at him, or tell him off, or let him overhear you saying, “Yes, Inspector, this is the caller I want traced.") The gall of these thieves is amazing.
IF COLLECTORS ARE DRIVING YOU CRAZY
If you have many debts and the collectors are driving you crazy, it may be that lawsuits and garnishments are not far behind. Could you keep up with your mortgage, car payments, utilities, gas, and food if a wage garnishment started taking 25% of every paycheck? If not, it’s time you considered alternatives before your situation becomes worse. The answer may or may not involve bankruptcy, to get a fresh start. Call us for a free consultation to explore the possibilities.
Also, see our other Legal Guides on this subject on this web site:
“DEALING WITH DEBT COLLECTORS, PART 1: THE BASICS"
“DEALING WITH DEBT COLLECTORS, PART 3: DO’S AND DON’TS"
“DEALING WITH DEBT COLLECTORS, PART 4: WHAT THEY CANNOT DO LEGALLY"
Here are two websites for further info regarding debt collection abuse:
Here is the link to watch an excellent documentary on the credit card industry: http://www.pbs.org/wgbh/pages/frontline/shows/credit/view/