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.
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.