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Feb 2011After bankruptcy: Debt collector NCC tries a scam
Posted by Robert Weed / in After Bankruptcy / 19 comments
Cindy (not her real name) filed bankruptcy with me back in 2001. She called last week, upset. A debt collector, Nationwide Credit Corporation, of Alexandria, VA, called last week wanting $541.00.
This is the headquarters of Nationwide Credit Corporation, Alexandria VA. A debt collector there called Cindy and told her bankruptcy didn't cover their debt.
Cindy, now retired, didn’t have that much money. She wondered if I could work something out.
“Work something out!? We’re suing them!” I said.
This debt collector told her that her bankruptcy did not cover “interest,” and so she still had to pay. This collector, who gave the name Bill Watson, had Cindy totally confused. If she had $541, she would have sent it.
Bill violated two separate laws.
The bankruptcy discharge is a court order. It says that creditors cannot do “any act” to collect a debt that was discharged in the bankruptcy. Cindy properly listed a debt to Washington Gas. It was discharged. Nobody can try to collect it. Not Washington Gas and not their debt collector either. The call to Cindy was an act to collect the debt. It was a violation of the bankruptcy discharge.
Secondly, the call was a violation of the Fair Debt Collection Practices Act (known as the FDCPA). The FDCPA says that a debt collector cannot use any unfair means to collect a debt. One unfair means is making a false representation about the legal status of a debt. Bill Watson made a false representation about the legal status of the debt. It was discharged in the bankruptcy; he said it wasn’t.
Even for violating two different laws, I may not be able to spank NCC as much as they deserve.
For violations of the discharge, the bankruptcy judge can order them to stop. He can make them pay the consumer’s lawyer (me, thank you) for bringing it up. But he can’t punish the debt collector. Not unless they keep doing it.
For violation of the FDCPA, there’s a $1000 penalty. That was put in the law at $1000 in 1978. It hasn’t been adjusted for inflation since then.
Bill Watson had his lie all ready. He said bankruptcy doesn’t cover “interest.” He could have been telling the same lie to hundreds of people all month. Paying a $1000 fine and some legal fees. That doesn’t begin to cover the money he might have collected from people he scammed.
But it’s the best I can do. I’m sure glad Cindy called me–we’re suing those guys this week.
Bankruptcy law is my business. Suing debt collectors is my hobby.
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Robert Weed has helped fifteen thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.
Jason Krumbein
Funny– you end with “Bankruptcy law is my business. Suing Debt Collectors is my Hobby.”
I am just the opposite.
I sue debt collectors for my business. I just fiddle with Bankruptcy for fun.
For more on FDCPA, and the amazing abuses done by collectors, come read some of my blog. http://www.krumbeinlaw.com/category/fair-debt-collection-practices-act/
Robert Weed
Thanks, Jason. Jason Krumbein is also one of the three lawyers I recommend if you need a bankruptcy lawyer in the Richmond area.
Mitch
You indicate “any act” to collect on a debt that was discharged in bankruptcy. Does this include a secured debt? If your mortgage is discharged in your bankruptcy but you continue to stay and pay (no reaffirmation agreement signed), then decide to stop paying, can the mortgage company then call you to collect?
I understand they can foreclose, but are they allowed to call to collect on the debt?
It’s my understanding we can walk away at any time as it was covered in the BK.
I am curious because my lender calls and says “this is not an attempt to collect a debt”, yet they call 6-8 times a day and I have told them I am not going to pay and that I am trying for a loan modification.
I ask them, if this is not debt collection, what would you call it? They say they are just trying to see what my intentions are. Really….daily? Thoughts as to whether this violates the discharge order?
I am in Arizona and my BK was discharged in 2009. Thanks
Robert Weed
As you’ve explained it, you can walk away at any time because it was covered by the bankruptcy. (Make sure you are paying your home owners association if there is one.)
As to those harassing calls, just in the last few months, we’ve started to see this a whole lot from one of the biggest banks in America, and one egregious example from SLS. We’ve started suing them on this. We’re asking first for the calls to stop, second for legal fees, and third a little money for the harassment.
How well that works depends on the attitude of your bankruptcy judge. It should at least get the calls to stop. Some judges would slam the mortgage company pretty hard; others won’t.
Robert Weed
Lawyer for this debt collector, NCC, just called and offered us $1500.00. Cindy was delighted. Instead of owing them $541, they are paying her $750.00. (The other $750 comes to me.)
As I said, bankruptcy law is my business; I sue debt collectors for the fun of it.
Still I wish I could have done better here. Paying out that $1500, and paying their own lawyer, is a small price to pay if they scared a dozen people like Cindy into paying debts that were cleared by the bankruptcy.
Anni
We are having problems with our mortgage company too – our bankruptcy discharged 12/15/2009 and we have been out of the house since 2008. The house sits vacant to this day. Last summer, we started getting collection notices again. They acknowledge that our BK is on file, I’ve sent multiple copies of the discharge just to cover all the bases and I’ve made multiple phone calls (which is a total run around) and yet yesterday we get another notice with a current balance due and a past due balance… Our attorney says not to worry about it but we’re frustrated and want them to go away and leave us alone!!
Any suggestions?
Robert Weed
In a situation like that, I’d sue them for violating the bankruptcy discharge.
Robert Weed
I sue on those for violation of the bankruptcy discharge. That at least gets it to stop–and sometimes gets you and your lawyer some money. Obviously I don’t know the attitude of your bankruptcy judge on those things. Some judges don’t want to be bothered–others will really go off when that stuff keeps up and won’t stop.
Now sometimes the letters say we know you have filed bankruptcy and we know you don’t have to pay. But some people want to pay so here’s the status of your account. How long can they do that, if you have told them, “stop it! I’ve moved out!” Again, different judges have a different attitude about it. Recently my judges here have gotten tougher.
Robert Weed
I sue on those for violation of the bankruptcy discharge. That at least get’s it to stop–and sometimes gets you and your lawyer some money. Obviously I don’t know the attitude of your bankruptcy judge on those things. Some judges don’t want to be bothered–others will really go off when that stuff keeps up and won’t stop.
Now sometimes the letters say we know you have filed bankruptcy and we know you don’t have to pay. But some people want to pay so here’s the status of your account. How long can they do that, if you have told them, “stop it! I’ve moved out!” Again, different judges have a different attitude about it. Recently my judges here have gotten tougher.
Robert Weed
We went to trial in May against SLS, a mortgage servicer. SLS keep harassing people for mortgage payments after bankruptcy. SLS kept calling, after they were told, “call my lawyers.” They sent bills; they sent payment coupons.
Bankruptcy Judge Robert Mayer awarded $5000.00 to the people–PLUS made them pay me legal fees for having to sue them. We felt real good about that.
Lanie
My Chapter 7 was discharged in March and I continue to receive bills from 2 creditors who were discharged. I forwarded the first bill from each to my bankruptcy attorney, with a letter and offer of paying additional attorney’s fees to stop the letters, and never heard back from him. My bankruptcy took place in a different state; I moved before the discharge. While a little “windfall” of a fine would be nice, all I really want is to make sure is that these debts are discharged on my credit and that no current reports are being made to the credit reporting agencies. Is this something I can handle myself? I work for a law firm and would know how to navigate pro per (as long as I can do this from a different state than where I originally filed). Any direction would be greatly appreciated!
Robert Weed
If you have lawfirm experience, you can probably handle the FDCPA violations yourself. However, if you search NACA–National Association of Consumer Advocates–you can find someone in your state who likes to do FDCPA cases.
Here are the credit bureau 800 numbers to call and get copies of your reports.
TransUnion – Call 800-888-4213
Equifax – Call 888-685-1111
Experian – Call 888-397-3742
See if these debt collectors are hitting your credit reports. Try to dispute and see if that fixes it. Dispute in writing certified mail.
If there’s still a problem a lawyers who is a member of NACA will be eager to help you.
Lanie
Thank you so much, Robert. Your advice gives me those first steps that I needed.
Nick
NCC has been harassing me since I moved to the West Coast for an energy bill they claim was unpaid. Every time they call, they say they’ll send a proof of the debt, the next time they call they say they did but it always relates back to a letter that never showed up a year ago. They say they’ll send it again, but never do. Lately they’ve been calling at 6AM, insisting that my Virginia cell phone number lets them do that, despite having my West Coast address on file. I finally told them to send me the proof of debt and that the next time they call before 9AM I’m bringing them to court for the harassment.
All my experiences with NCC lead me to believe they’re one of the worst shake-down debt collection firms out there.
Robert Weed
Nick:
Yep. Try to get a lawyer who does FDCPA work near you and sue them!. Look at http://naca.net/.
Adrienne Ayers
I’m Adrienne Ayers, I’m kind of afraid of collectors also. Here,s my problems I need to pay off a Debt from an Apartment unit, says damage fee of $427.00 to NCC collections.So Far I,ve started a payment plan of $20 a month, which leaves the balance of about $407.00, I’m willing to pay the whole balance off. Because it’s on my Credit and I’m having a problem getting an Place to rent!! I asking what steps should I Take 1.May Sure I received in writing that the debt was paid! Asap!. And also need a time when, be Cleared!! Off credit report.
Robert Weed
Adrienne:
Looks to me like you are thinking clearly.
Luciania
Mr. Weed you worked for my parents years ago and they still talk about you. I’m writing because I need assistance negotiating with Westlake Financial if I can. I defaulted on a car loan after my son went through a major back surgery In October of 2014. I am still in possession of the car and I would like to keep it. My mom has decided to help me get on my feet so she has committed to paying the 15,181 balance in 1000 dollar monthly increments if they agree. After searching for solutions to my issue I finding that no lender would agree since it has been so long. What are your thoughts. Do you negotiate on consumers behalf with creditors?
Robert Weed
Luciania:
Thanks for thinking of me, but I have NOT been able to successfully negotiate for consumers. I am so well known as a bankrutpcy lawyer that when I try to negotiate the other side assumes you are not filing bankrutpcy because you have something to hide. That does NOT help.