Wednesday, August 3, 2016

Supreme Court’s Ruling In Debt Collection Case: Will It Help You?

Next to divorce and criminal cases, one of the most difficult types of lawsuits to be a party to is a debt collection suit. This is because if you are being sued for a past due debt the possibility of a judgment against you can lead to collection efforts thereafter, like garnishments or repossessions of your property. If your wages or bank accounts are garnished you will likely be unable to pay all of your bills and this results in you getting further behind on other obligations. Or, if you are given notice of a foreclosure proceeding and not able to work out an agreement with your mortgage holder, you will be forced to vacate your home and relocate your family. None of this sounds like fun and that is because it is not fun. So when the highest court in the land takes a stance on how debt collection cases are handled, it is worth sitting up and taking notice. 

As it is now the main law in place that governs how debt collection cases proceed is the Fair Debt Collection Practices Act (the FDCPA). This Act puts certain regulations on debt collectors, and if the debt collector does not follow the rules then the debtor can file a suit against the collector for violating the Act. Things like making sure debtors are given the chance to dispute the debt and to request proof of the validity of the debt are covered by the FDCPA. But there are also other laws in place that prohibit certain things, one of them being how much interest a lender or collector can charge on a debt. When a rate is considered too high it is defined by the law as being usurious. What this means is that if banks charge too much for interest, as to be shocking, it is illegal. The legal issue that has recently arisen in this area concerns a debtor who had a past due debt, and a debt collector who was charging a rate that seemed too high. The first time the case was heard the case sided with the debt collector, so the debtor took her case to the next level and that court agreed with the consumer. The case is now set to be heard by the United States Supreme Court. Here is what to look for, and how it might help you as a consumer debtor:

          If the Court decides a debt collector is a national bank, the debt collector can charge higher rates.

          Depending on the outcome if you have been sued by a debt collector at a rate that seems out of line, you may be able to bring a similar suit for recovery.

Most debt is not hard to pay off, it is just the interest being charged that adds up and makes the total amount due just out of reach. How the country’s highest court decides this issue could have far reaching effects on anyone being sued by a debt collector, at least as far as the matter of the appropriate rate of interest for the debt. Our job includes not only helping people get out from under overwhelming debt by using the existing laws, but also looking forward to possible changes in the law so new rules can be applied to your case when the facts fit. We stay on top of the latest trends and developments so we can offer you the most up to date and accurate advice.

For more information debt management and the legal remedies available to you, call us today or reach us online at We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.

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