Minnesota Representative Joe Mullery and Senator Ron Latz recently introduced a bill that would prevent debt buyers from filing a lawsuit without the ability to prove they have the right to collect a debt.
Why the need for the rule? Debt buyers and collectors file tens of thousands of lawsuits against Minnesota consumers every year, and probably serve at least as many that never get filed. But debt buyers should lose most of their lawsuits, if challenged.
Getting called or served with a lawsuit by a collector is a pain, at best. You can help yourself deal with debt collection with free information and tools online, but not everything you find will actually help. Here is a selection of resources that will:
Finally, you can get debt collection help from a lawyer. Most consumer rights lawyers will give you a free case evaluation, and may be able to represent you on contingency, so that you pay nothing unless the collector pays you.
I got the word a few days ago that gigantic debt collection law firm Mann Bracken was going under. Atlanta consumer lawyer Tim Cook says Mann Bracken’s lawyers are out of work and the phones are instructing callers to contact their creditors. Could it be?
It could. Mann Bracken has been under fire in Georgia, and its parent company, Axiant, took a big hit when the Minnesota Attorney General forced the National Arbitration Forum to stop handling consumer arbitrations. That is a lot of weight to carry, and I am not surprised to find out that Mann Bracken is the next casualty of the Axiant love triangle.
From the comments, here is my best advice if you had a debt with Mann Bracken:
Mann Bracken is a debt collection law firm. As far as I know, Mann Bracken does not purchase debts, it just collects debts that belong to its clients.
If Mann Bracken goes bankrupt, its clients do not lose the right to collect their debts, they just have to find another debt collector to do it.
If you had a debt with Mann Bracken, you should probably start by contacting the creditor. If you had reached a settlement with Mann Bracken, find out whether the creditor intends to honor that settlement. (Note: Making payments is not necessarily the same thing as settling your debt. A creditor must credit your account for any payments you make, regardless whether you have reached some kind of settlement.)
New York Attorney General Andrew Cuomo sues some of the most abusive debt collectors. The first consumer did not even owe the debt, but ended up paying $900 just to make the abuse stop!
Embedded video from CNN Video
This kind of behavior is why the Fair Debt Collection Practices Act exists. If you are getting calls from debt collectors who harass and abuse you, you do not have to take it. Call a consumer rights lawyer!
The Better Business Bureau (BBB) has put out an emergency alert regarding bogus debt collectors that have recently been praying on consumers. The fake debt collectors are often just as nasty as real debt collectors can be, if not worse.
If you are contacted by a debt collector and think it is a scam, here are a few tips:
Yesterday, on Consumerist, I criticized an article in the Washington Post for sounding like it was written by debt collectors. Apparently, it was prompted by a dispatch from the Associated Press, which distributed “Six Tips for Dealing With Debt Collectors” on Friday. (The “6 tips” are good tips, by the way, although the WaPo article has serious flaws.)
While I was writing my post for Consumerist, the debt collection trade publication, InsideARM, was complaining about the AP’s “6 tips” article:
[O]ver this past weekend, a new kind of story has cropped up: the consumer-focused “know your rights” story. Long a stable of the mainstream press, this new round of stories is a little more ominous, as they offer specific tips on how to chronicle collection correspondence and how to hide assets from collectors.
(Emphasis added.) There is nothing about hiding assets in the AP article, just sound advice for consumers. InsideARM is just spreading fear, uncertainty, and doubt. This justifies my raised eyebrow at collection industry lobbyist Scott Talbot’s comments in the WaPo article: “There is going to be a consumer protection wave, which we support, that will sweep through Congress.”
(photo: Wikimedia Commons)
Back in November, I won an important decision for Minnesota consumers against Messerli & Kramer, a law firm that seems to handle the bulk of debt collection lawsuits filed in Minnesota. Messerli & Kramer served a levy on my clients’ bank for funds in their’ joint bank account, even though Messerli & Kramer only had a judgment against one of them. The other had no connection to the debt.
This happens all the time, and not just to husband-and-wife joint accounts.
“This situation lets people in on a dirty little secret for a lot of firms, especially on the service side. Their collections efforts are really a bluff. They really aren’t going to pursue their borrowers very hard,” [David] Vang said. “When people see that, their morals adjust. I think this could snowball.”