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Courts See Flood of Debt Collection Lawsuits Prepared Automatically by Software

July 16, 2010

As Chino unfair debt collection attorneys, we were pleased to see a recent New York Times article about an anti-consumer practice by collection agencies. The July 13 article said courts around the U.S. are seeing a marked increase in debt collection lawsuits. In a bad economy, this may not be so surprising. But according to the article, many debt collection law firms are filing those lawsuits almost automatically, using software that sends letters, summonses and other notices without the need for a human being to pay close attention. As a result, one New York firm files about 5,700 cases per lawyer every year. Critics believe this allows cases to be filed incorrectly, resulting in unjust judgments that legally compel people to pay debts they don't owe.

Debt collection lawsuits are always likely to go up in a bad economy, one collection attorney noted in the article, because more people aren't able to pay their bills. But judges, legislators and the Federal Trade Commission have complained about the high volume of cases, particularly of cases that are cannot be substantiated if the defendant challenges them. The FTC called the legal system for collecting debts "broken" the day before the article, and North Carolina passed a law last fall requiring extra documentation for a debt collection suit. In New York, some courts are demanding this on a case-by-case basis, whenever debtors challenge the claim. One judge in the article dismissed a case brought by the 5,700-case-per-lawyer firm, after its attorney could not prove it was suing the right person. That firm has also been sued for trying to collect a debt that has already been paid.

The trouble, as the article notes, is that most people who are sued by debt collectors don't show up to court. In some cases, the collection agency intentionally evades legal requirements for notifying the defendant. But in many others, the defendant does not show up because he or she believes the case is hopeless or already decided. As Fullerton abusive debt collection lawyers, we strongly advise readers not to do this. If you don't show up for a lawsuit, the debt collector wins by default -- and it's rare to get another chance to defend yourself. Even if it's a debt you don't really owe, you will likely have your wages or property garnished to pay it. You can sue debt collectors for attempting to collect on an illegal debt or collecting in an illegal way, but the chances are good that you will face a lot of financial strain and personal stress before succeeding.

If you believe you're the victim of illegal, abusive or harassing debt collection, Howard Law PC can help. Our Rancho Cucamonga debt collection harassment attorneys represent consumers whose rights have been trampled by debt collectors -- a group of people that is all too large, and unfortunately growing. Under the Fair Debt Collection Practices Act and the California state version, the Rosenthal FDCPA, collection agencies have numerous restrictions on how they must collect debts, including forbidden actions as well as required actions. Among other things, debt collectors cannot legally collect debt that is more than two to four years old (in California); threaten you with anything but a lawsuit; or call late at night or very early in the morning. If they violate these or any of their other legal requirements, victims may sue them for damages of up to $1,000, plus reasonable attorney fees and any actual damages.

Howard Law can help you turn the tables on abusive debt collectors. To learn more, or for a free consultation, send us a message through the Internet or call 1-800-872-5925 today.