debt collection

When Debt Collectors Call About the Rent

This post originally appeared on ConsumerLawyer.MN with the title “Debt Collector Calls About Rental Debt.”

Debt collectors and landlords go together like peanut butter and jelly. When a landlord has a dispute over rental debt or damage to a rental property, a landlord will frequently turn to a debt collector.

Many times, the debt collector either misrepresents the amount of the debt or what can happen if you don’t pay it. If you have been contacted by a debt collector about rental debt, here is what you need to know.

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Evidence of Assignment: Why Debt Buyers Have Proof Problems

Assignment is the foundation of the debt-buying industry, and the industry is built on sand. Or a swamp. Because assignment is also the industry’s weak spot, and the reason why most—if not all—debt-buyer lawsuits should fail.

Debt buyers must prove they have the right to collect a debt. To do this, it must show an unbroken, valid chain of assignment back to the original creditor. Most debt buyers cannot do this.

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Served By a Debt Collector? What To Do Next

Getting served with a debt collection lawsuit is one of the more upsetting things that can happen to you. When a process server hands a summons and complaint to you (or to someone you live with who can accept service), it means a debt collector is dragging you into the legal system.

And while getting served with a debt collection lawsuit is not fun, it is not the end of the world. In fact, that summons and complaint—legal process—provides rights to both parties to the case. Which means as a defendant in a debt collection lawsuit, you now have access to tools to defend yourself.

Let’s take a look at the first few parts of a lawsuit to try to dispel the fear and misunderstanding.

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Supreme Court v. Zombie Debt Collectors

Noting that Midland buys old debt it knows is not legally recoverable because of various state laws preventing collection after a number of years, Sotomayor asked, “Apparently, you collect on millions of dollars of these debts. So is that what you do?”

Yes. Yes it is.

This is a conversation every consumer lawyer has had many times with clients. No, you don’t owe the debt any more. Yes, they can still collect it. Yes, that’s fucked up. Apparently the Supreme Court just learned about zombie debt, and a few of the justices, at least, seem to agree that it’s pretty fucked up.

The decision in Midland Funding, LLC v. Johnson should be out in June.

Current Balance vs. Payoff Amount

Payoff amount and current balance are related but not equivalent terms.

Current balance means the amount you owe according to your statement. The next day, you will owe more. In other words, if you are trying to pay off a credit card and the statement says your balance is $514, you may not be able to bring your balance to zero and satisfy the debt by writing a check for $514. Instead, you would need to contact your lender to find out your payoff amount.

Payoff amount is how much you would have to pay to satisfy the debt. It is not the same amount as the current balance on your statement—at least not for long.

The difference between the current balance according to your statement and the payoff amount is crucial when you are ready to pay off your debt.

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How Not to Defend a Debt Collection Lawsuit

This article is a list of defenses that do not work. If you would rather find out what you should do, click over to “Served By a Debt Collector? What To Do Next.”

Most debt collection lawsuits are handled by overworked and unsympathetic debt collection attorneys. With that in mind, focus on your best defenses to the lawsuit. Here are some of the weaker defenses, which you should avoid.

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MN House Speaker Kurt Daudt Gets Sued by Messerli & Kramer

This starts out as a completely ordinary debt collection story. A consumer falls behind on their credit card bills, eventually they get sued by Messerli & Kramer, and Messerli & Kramer gets a default judgment, probably due to Minnesota’s permissive “pocket filing” rule. But in this case, the consumer in question is the Republican Minnesota House Speaker, Kurt Daudt. And it’s a little embarrassing.

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About the US Marshals and Paul Aker’s Student Loan Debt

So this happened:

Seven armed U.S. marshals arrived at [Paul Aker’s] door in Houston last Thursday, arrested him on the spot, and took him to jail. He owed all of $1,500, outstanding since 1987. Aker told Fox 26 that without any warning, his 29-year-old debt was forcibly being collected; the marshals took him to federal court and made him sign a payment plan.

Along with many who saw the story, I was convinced there had to be more to it. Well, there sure is.

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FTC Launches “Operation Collection Protection”

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The FTC is going after debt collectors in a big way:

The cases announced today bring to 115 the total number of actions taken so far this year by the more than 70 law enforcement partners in the Operation Collection Protection initiative.

The FTC is mainly targeting debt collectors trying to collect debts the consumers don’t actually owe.

Debt collectors targeted by the FTC and various state law-enforcement agencies include BAM Financial, Delaware Solutions, K.I.P., and National Check Registry.

How to Record Collection Calls

You should record all collection calls if it is legal for you to do so.

You need to keep a record of any agreements you make with the debt collector (like a payment plan) or promises the debt collector makes (like stopping collection activity while you are current on your payments). Without a recording, any agreements or promises will be difficult, if not impossible, to prove.

You also need to protect your legal rights. If a debt collector violates the Fair Debt Collection Practices Act during a call, you need to be able to prove what they said or did to violate the FDCPA. And if a debt collector does violate the FDCPA, you are entitled to up to $1,000 — or even more for egregious violations. A jury in Texas awarded [$1.5 million for 8 especially racist voicemails](](http://caveatemptorblog.com/3627/jury-awards-1-5-million-to-consumer-abused-by-debt-collector/). While that sort of verdict is far from ordinary, the point is this: it can be well worth your time and a little bit of money to record your calls.

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