Seventh Circuit Decision Limits Collection of Old Debts in Illinois


Have you received calls from a debt collector like CACH, Calvary SPC, LVNV Funding, or Portfolio Recovery Associates about an old debt?  A recent Seventh Circuit decision made clear that debt collectors are going to have to be more careful about collecting on old debts.  The cases involved in the decision were McMahon v. LVNV Funding and Delgado v. Capital Management Services.  Specifically, the Seventh Circuit court explained that dunning letters might be misleading, and thus can violate the Fair Debt Collection Practices Act (FDCPA), in situations where the statute of limitations has run out.
Have you been harassed by a debt collector?  Has a collection agency attempted to collect an old debt without letting you know that it’s time-barred?  When the statute of limitations has run out, a debt collector can’t file a lawsuit against you to recover the money you owe.  And if a debt collector like LVNV Funding doesn’t make clear that your debt is time-barred, you might be able to file a FDCPA claim.  At the Emerson Law Firm, we are dedicated to helping Illinois consumers.  If you have questions about misleading or deceptive debt collection practices, contact us today.  We’re here to answer your questions.
Collection Practices and Dunning Letters
What’s a dunning letter?  According to businessdictionary.com, a dunning letter is simply a notification that’s sent out to a debtor that informs them of an overdue account balance.  These letters usually appear in a series, beginning with an initial letter about the overdue account, and leading up to more demanding letters for payment if the customer doesn’t respond or attempt to pay the debt.  Dunning letters traditionally were physical pieces of mail, but now they can also take the form of faxes, emails, and in some cases even text messages.
The key takeaway of the Seventh Circuit decision is this: a dunning letter that attempts to collect on a time-barred debt can violate the FDCPA.  And it can violate the FDCPA even when the debt collector doesn’t threaten to sue the consumer.  Why?  According to the Seventh Circuit, most consumers don’t fully understand their rights when it comes to time-barred debts (or those in which the statute of limitations on collection has run out).
In other words, many consumers are likely to think that they need to settle their old debts in order to avoid a lawsuit.  Therefore, an attempt to collect on such a debt, without letting the consumer know that the debt is time-barred, can be misleading or deceptive.  Since the Seventh Circuit decides Illinois cases, the decision is likely to make it easier for Chicago residents to file claims against debt collection agencies for attempts to collect on old debts.
Violations of the FDCPA
As you might know, the FDCPA is a federal law that prevents debt collection companies from using any “false, deceptive, or misleading” practices when they attempt to collect a debt.  A debt collector is also prohibited from any practices that misrepresent the legal status of a debt.
How can a collection agency avoid violating the FDCPA?  According to the Seventh Circuit, “it would be easy to include general language” that explains that the debt at issue is actually time-barred.  In short, the Court suggested that debt collectors can easily let consumers know that their debts are time-barred, and that they can’t be sued if they fail to pay.  If a collection agency fails to make this information clear, the Seventh Circuit suggested that a consumer may be able to file a claim for compensation.
Contact an Illinois consumer protection lawyer at the Emerson Law Firm today to learn more.
See Related Blog Posts:

Comments

Post a Comment

Popular posts from this blog

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti
Read more

Learning About Different Types of Wills

Whether you are young or old, single or married, wealthy or with limited financial means, healthy or dealing with a medical condition, it is important to make a will. Many people have incorrectly heard that wills are only necessary for particular people, such as those with a substantial amount of assets or for older adults in poor health. Yet wills are critical for adults of all ages, and an experienced Oak Park estate planning lawyer can help you to make one. Before you begin working with a lawyer on a will, you might start conducting your own research into wills in Illinois and the requirements for a valid will. In so doing, you are likely to come across information about many different types of wills, and you are probably going to wonder whether you will need more than one kind of will. In short, there are different terms that can be used to describe the form or function of a will, as well as some distinct types of wills. Our Oak Park estate planning attorneys can explain in more
Read more

Younger Parents Need an Estate Plan

It is critical for younger parents to have an estate plan, even if they know they are healthy and do not anticipate that anything will happen in the near future. Much too often, younger parents assume that they can wait until they are older to consider estate planning or until there is a health-related reason to begin the estate planning process. Yet estate planning is critically important for parents who have minor children. While estate planning is important for adults of all ages, it can allow parents to make important decisions about who will care for their children in the event that they become unable to do so themselves. Our Oak Park estate planning lawyers can explain in more detail. Naming a Guardian for Your Minor Children in Your Will Most importantly for younger parents, making a will allows you to name a guardian who can care for your child in the event of your unexpected death. Nobody anticipates a deadly accident or a sudden situation in which there is a need for another
Read more