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Debtor Creditor Rights
SUNY Buffalo Law School
Russo, Michael

Debtors & Creditors 853-8479 michael.russo@oag.state.ny.us

Week 1

Introduction:

Exam is closed book and is multiple choice and short answer with a possible long essay

Fair Debt Collection Practices Act

· This statute was to lay the ground rules for debt collection
· Debt collection affects interstate commerce, therefore applying to all states
· To eliminate abusive debt collection practices by debt collectors
· This act on applies to those collecting on behalf of individual people (consumers), not to businesses
· Also businesses collecting their own debts are not applicable
· Communications with third parties for the purpose of locating the consumer, can occur only once and cannot divulge who you are unless clearly asked and this communicating can happen only once
· Once the collector knew of an attorney representing the debtor must only speak to attorney
· A collector cannot use threats or publish to try to collect debts

Week 2

Non-Judicial Collection Efforts
A. Fair Debt Collection Practice Act Cases
1. West v. Costen p. 8

· Costen is the president of a debt collection agency
· He obtained delinquent accounts and turned them over to his company, who would assign them to collectors, since he both obtained the accounts and turned them over to his company this affected the relief that was granted
· The first thing that would happen would be that a letter would be sent advising of a debt due, then turned over to debt collectors
· Then a pre-printed form notice was sent telling the debtor that actions are against them
· 5 causes of actions regarding the debts
o Communicating with third parties was an issue in the case, you cannot discuss the debt
o Threatening criminal prosecution
o Validation of debt, requires proof of underlined debt
o Issuing service charges not expressly authorized ($15)
o 5th cause of action was misrepresenting the amount of the debt

· Communication with a consumer is not c

ot have the authority to do
· Court held it was an improper debt collecting practice
· [34] text of the 2 separate letters sent

3. Heintz v. Jenkins p. 36

· Here the lawyer represented a bank and sought to collect debts for that bank
· The question was when the attorney over stated an amount due, when this mistake was made the question was whether a lawyer is considered a debt collector
· Lawyers are not exempt though in looking at legislative intent
· Lawyers must watch the act if they are routinely involved in the debt collection practices of others
· Lawyer should have cut out the insurance money from the actual debt

v Original creditors may not be subject to the act, i.e. if your law firm is collecting, need to research depending on state etc.

Various Judgments: