The first step to being well-prepared for a collections case is to hire an experienced financial lawyer. An individual in a collections case may find themselves being harassed by a collection agency and/or a creditor. Collection agencies are known for aggressively pursuing debtors to pay back money they owe a creditor.

Collection agencies specialize in collecting debt payments on behalf of businesses and/or individuals. These agencies are commonly used by small businesses.

The laws governing collections agencies vary by state, but there are some general restrictions of the activities in which they may engage. They are not permitted to engage in acts that are deceptive, illegal, and/or fraudulent.

It is important to know what collection agencies can and cannot do in order for an individual to defend themselves against unfair practices. An attorney can help at any time during the process, even if an individual only has a question regarding a debt collection agency that has contacted them.

Collection agencies are required to keep records of the activities regarding debt collection. It is important for any individual contacted by a debt collection agency to keep their own detailed records in case a dispute arises.

It is also important for individuals to be aware of debt collection practices that these agencies may use to collect the debts. It is important for the individual to retain any communications as well as document any communications with the agency.

Information to document includes:

  • The agency name;
  • The name of the individual working for the agency;
  • The date and time of contact;
  • The type of contact; and
  • The substance of the conversation and/or correspondence.

Some ways a debt collection agency will attempt to contact the debtor may include:

  • A reminder invoice reminding the debtor how much the debt is and that the creditor still wants the debt paid;
  • A formal demand notice stating that the creditor demands timely payment;
  • A call and/or visit the debtor if the debtor’s state law permits; and
  • Hiring a collection agency to attempt to persuade the debtor to pay.

A collection agency usually takes a percentage of the money due as compensation. This may provide them with motive to undertake unfair and/or illegal practices to collect the debt.

It is important to note that a debtor is permitted to demand information regarding the debt, known as debt verification. In many cases, a debt collector the individual has never heard of will be contacting them to collect the debt. It is difficult to know whether the debt is legitimate or not. If the collection agency cannot produce the information, it can be used as a defense in a lawsuit.

Pursuant to the Fair Debt Collection Practices Act (FDCPA), if an individual is contacted by a debt collector, they are entitled to request a verification letter. If an individual sends a collector a letter disputing the debt and/or requesting verification of the debt within 30 days of receipt of the initial notice of the debt, known as a dunning letter, the debt collector must immediately cease collection activity. They must also provide the individual information verifying the debt, such as an account statement.

A debt collector is not permitted to continue collection efforts until they have verified the debt. At minimum, the collector must provide a description of the amount owed as well as the name and address of the original creditor. There is no time limit on the debt collector’s response.

Should a debt collector fail to verify a debt and continue to contact a debtor the debtor may be able to sue the debt collector in federal or state court. An individual may receive up to $1,000 per lawsuit. An individual may also receive actual damages, attorney’s fees, and court costs. In some states, an individual may receive over $1,000.

What Documentation Should I Gather Before I Meet with My Collections Lawyer?

Generally, an individual will have received correspondences such as those listed above prior to becoming involved in a collections case. It is important to bring any of those documents to a consultation.

The documents an individual needs to bring to a collections consultation include:

  • Any documents related to the debt;
  • Any documents showing the payment history or lack thereof;
  • Any correspondence received from the debt collection agency;
  • A request for the verification of the debt, if sent;
  • A debt verification letter, if received; and
  • Any other documents that may be relevant.

It is better to bring too many documents and determine they are not needed than to fail to bring a relevant document to the consultation. An attorney will not be upset if an individual brings too many documents.

What Makes a Collections Case Strong? What Makes it Weak?

A strong collection case is a case where an individual can show the debt collection agency used deceptive, illegal, and/or fraudulent acts in their attempt to collect the debt. Collection agencies are prohibited from violating the FDCPA, which includes prohibitions on:

  • Using threats of violence and/or harm;
  • Contacting any third party about the debt owed;
  • Using obscene language;
  • Using the phone to annoy and/or irritate someone;
  • Falsely misrepresenting themselves as attorneys, government officials, and/or any other entity;
  • Making false and/or misleading statements; and/or
  • Declaring that they will take unlawful action if payment is not made.

In addition, a collection agency must disclose to the debtor:

  • The amount of the debt;
  • The name of the creditor; and
  • The timeframe in which the debtor can dispute the amount owed.

The debt collector must provide, at a minimum, the following documentation:

  • A copy of the original agreement between the parties;
  • Whether or not the account has been sold to another creditor; and
  • Proof of the collector’s right to sue to collect the debt, usually an assignment between the creditor and the collection entity.

If the collection agency has violated any of these requirements and/or prohibitions, it is important for the debtor to keep a record of the violations. These records and documents regarding the debt collector’s improper and/or illegal actions will help build a strong case.

A collections case may be weakened by a lack of documentation. This is why it is important for the debtor to be aware of acceptable practices from a debt collector as well as documenting any interactions with the collector.

What Types of Collections Cases Benefit Most from the Help of an Attorney?

Any type of collections case will benefit from the assistance of an attorney. As mentioned above, laws regarding collections vary by state. An attorney will be aware of any federal and/or state laws that may apply.

An attorney will also be aware what a debt collector is required to do in order to file a proper lawsuit against a debtor. For example, a debt collector must attach a copy of the account and/or written contract and/or agreement to the complaint or explain in the complaint why the account and/or document is not attached. This is known as the attachment rule and the debt collector does not abide, the lawsuit may be dismissed.

When Do I Need a Collections Lawyer?

A collections lawyer can help with any aspect of debt collections. If an individual has any questions at all regarding debt collection and/or being contacted by a debt collector, a lawyer is always willing to help.

A lawyer can assist in determining whether or not a creditor is violating the FDCPA. They can also advise you regarding the laws of your state and represent you during any court proceedings, if necessary.