Legal Question in Credit and Debt Law in California

TURN THE TABLES ON YOUR DEBT COLLECTOR

Your question is not dissimilar to another question I answered here this morning. Forgive me for being verbose, but there are a lot of people in your situation. So I hope this answer is helpful to all.

You are correct that there is a limit on the time a collector has to SUE you to collect the debt. The statute of limitations in California generally is four years. However, there is generally no limit on how long a company can attempt to collect on a debt. In the aftermath of the savings and loan crisis of the late 1980's, a cottage industry of debt buyers formed, grew and thrived by buying heavily discounted debts from the government's Resolution Trust Corporation. To make a profit in their current incarnation, these companies and partnerships buy your old debt for pennies, and then try to collect something (anything) over the pennies they pay. No doubt, new life is being breathed into that industry in the current environment. The problem you are experiencing will only continue to grow for a lot of Americans over the next 10 years.

The most important cautionary note is to advise you that if you admit the debt, or make ANY kind of payment on the debt, you risk restarting the time period on the statute of limitations. This is not lost on the debt collectors - and they will use every trick in the book to trip you up on this. So be very careful - they are recording the call and will produce the recording. NEVER ADMIT YOU OWE THE DEBT.

Assuming you have not yet fallen for the re-admission trap, I would suggest two strategies. First, write a letter to the debt collector indicating that you have reviewed the information they provided to you. Specifically state that you DO NOT OWE THE DEBT based upon the provided information and, moreover, be sure to mention that the statute of limitations on collecting the debt has expired. Until they further validate it and respond to your concerns, and the statute of limitations is relevant to this validation, the debt collector is not allowed to further contact you or pursue collection activities. Also and separately, send a cease and desist letter telling them to stop contacting you - again mentioning the lack of validation and statute of limitations issues. You can find samples of such letters on the Internet. If you do all of this, think of the record that will then be before the Court if they try to sue you.

Then, I would sign up for a service such as RecordACall.com. From that point forward, your task is to catch and record the debt collector violating the debt validation request stay and/or cease and desist letter. If the debt collector calls and says the call may be recorded - let them know you are recording it as well. If they don't say it is recorded, mention it yourself. Always ask for the name and employee number of the person speaking to you. Somewhere at the beginning of the conversation be sure to mention the date and time. In other words, say "ok, let me confirm that I am speaking with Jane Smith, employee 9999 at XYZ Ripoff Debt Collector Partnership, and this is August 27 at 2:00 pm Pacific Time." However, even if the recording itself is not admissible in Court because you did not indicate that you were recording the call, the recording could still be useful for you to make a "present sense impression" of the call in the way of a transcript of the recording that could very well be admissible in Court. Always, always be friendly and curtious. Your job is to outsmart them. Stay in control and never get emotional. Remember, civility and kindness totally confuses them. Also, use periods of uncomfortable silence to draw them out. When the conversation goes silent, the debt collector will often resort to babbling.

Violations by the debt collector subject them to civil penalties of $1,000 and attorneys fees under the California Rosenthal Act and the Fair Debt Collection Practices Act. The government permits an award of legal fees to help you have access to private attorneys who will take your case on contingency because they know that they will be compensated BY THE DEBT COLLECTOR in a good case. Accordingly, you should have no problem finding an attorney to take a well-documented case.

To ignore the debt collector, and fear a lawsuit, only empowers them. Your silence in the face of their so-called "validation" could also be used against you as an inadvertant admission that you owe the debt. If you document the aforementioned violations, you will have no problem finding an attorney to represent you who is willing to wait to get paid by the debt collector. Take control and turn the tables on them. These debt collectors may very well be bottom feeders and they are notorious for making mistakes. In the scenario layed out above, instead of fearing the debt collector's calls, now you will look forward to them and you may be compensated for their blunders.

There is also a 100lb elephant in the room to consider. Sometimes, we become delusional about these matters. Someone, somewhere, took a risk on you, and provided you money or services trusting you would pay them. They were hurt by the fact that they were not paid, and tried to recover something by selling the account for pennies. If it was a legitimate debt and you owed it, maybe the right thing to do is pay it. Never admit the debt, and always preface the conversation with the fact that you don't owe it, but ask the debt collector what it would take to settle the matter. Let's say you owed a debt of $1000. Chances are, someone trying to collect a 5 or 10-year old debt paid $10 for it. You might be able to settle the debt for $20. If so, you are happy and the debt collector just got a 100% return on their investment. For a small amount of money, do you really want to continue to spend time and energy on this? Life is short, and I always believe that you have to choose your battles carefully. There are real battles in life that will test everything you are as a person. It is difficult to believe that this battle rises to any such level of importance. If you do settle the debt, be sure to have the debt collector agree in writing to a full release and to mark the debt as paid satisfactory on your credit report. Also, make sure they have the true power to settle the debt from the original account holder.

As always, please view this as very general information and just a starting point for you. We are not your legal counsel, do not know your specific situation and we do not have an attorney-client relationship with you. General advice on the Internet is no substitute for consulting a qualified attorney for your specific case.

Arthur Stockton

Stockton Thornton LLP

27322 Calle Arroyo Suite 36C

San Juan Capistrano, CA 92675

There may be a violation of the Fair Debt Collecton Act. We would have to review the letter you received to see if there was a violation.