Winning Against Debt Collectors: A Legal Outcome for Debt Settlement and Fair Debt Practices
Dealing with debt collectors can be a daunting and often unfruitful experience. However, there are instances where clients can turn the tables on these collectors and achieve a satisfactory outcome for themselves. This story, one of many, illustrates the importance of understanding your rights and leveraging the Fair Debt Collection Practices Act (FDCPA) to your advantage.
The Client's Challenge
A client of mine needed to obtain a mortgage within three months for a new home. However, two issues on his credit report were hindering this goal: an 1125 judgment from an apartment owner and an 8517 collection for the same account. The client sought assistance to resolve these issues.
Initial Steps and Strategy
Upon receiving the request, we started by calling the owner of the judgment. Unfortunately, our attempts to reach a settlement were unsuccessful. Instead of giving up, we decided to take a different approach by involving a professional. I advised the client on how to conduct a call with a collector, suggesting an initial offer for 700 to settle the debt. The client was skeptical, expressing doubt about the feasibility of such a low offer.
The Phone Call and Strategizing
Before contacting the collection company, I prepared the client for the call, emphasizing the importance of pointing out the age of the debt and the timeline for its removal from the credit report. This strategy was aimed at creating leverage in negotiations. When the call took place, the collector initially dismissed the offer, which was a common tactic. To this, the client adhered to my advice, explaining the account's age and its impending removal in 18 months. However, the collector's response took an unexpected turn, leading to a potential legal action.
Collector's Misrepresentation and Legal Action
When the collector claimed that the account would stay on a renter's report indefinitely, the client cleverly corrected them, pointing out that the Fair Credit Reporting Act (FCRA) applies to renter's reports just as it does to standard credit reports. This statement proved to be the pivotal moment. The collector's refusal to acknowledge the client's correction indicated a violation of the FDCPA, which caps the amount a collector can sue for on a credit report. Armed with this information, I advised the client to consult with a specialist in Fair Debt Collection Practices Act cases.
The Outcome and Resolution
A lawsuit was filed, resulting in the collector paying the owner of the judgment 750 in full settlement and removal of the 1125 judgment from the client's credit report. The collector also agreed to forgive the 8517 debt and remove the account from the client's credit report. This successful resolution paved the way for the client to purchase his new home within the desired timeframe.
Conclusion
This case highlights the importance of knowing your rights when dealing with debt collectors. Understanding the Fair Debt Collection Practices Act can empower you to take a proactive and strategic approach to resolving debt issues. By staying informed and seeking legal assistance when needed, you can achieve a satisfactory outcome and potentially challenge unfair practices.