Defined – A broad practice area that focuses on advocating for the rights of individuals sued by a lending company. Typically these are credit card lawsuits and banking lawsuits.
What is a consumer debt lawsuit?
Consumer Debt cases occur in two ways:
- The Bank or original lender files a lawsuit; or
- The Bank or original lender sells the bank account or credit card account to another company who then files the lawsuit.
In Georgia, a bank and/or credit card company can file a lawsuit on its own behalf against a consumer for a variety of reasons but most common are the failure to make payments or to repay a loan. The bank is referred to as the “original creditor.” The original creditor is the first company the consumer contracted to borrow money from in one form or another.
In Georgia, the original creditor is also permitted to sell its accounts to another company. This is called an assignment. An assignment is created by the original creditor selling its interests and rights to collect any money from its accounts to another company. For example – you have a Discover credit card ending in *1234, and for one reason or another cannot pay off that credit card and quit making payments on the amount owed for that credit card. Discover can either (A) file a lawsuit to try and recover the amount still owed on that credit card account; or (B) sell that account to another company known as a “third party debt buyer.”
Luckily, Georgia law specifically addresses how that sale works and what documents are needed to create an enforceable assignment. These rules protect individuals against fraud and exploitation by requiring the companies to prove with written documentation that the company did, in fact, buy that particular account from the original creditor. The documents must include (among other things) the name of the selling and buying companies, and identify the account sold from one company to another, and the balance still owed on that account. Companies who fail to comply with the law open the door for potential penalties and damages to the consumer.
Under Federal Law, third party debt buyers must comply with the Fair Debt Collection Practices Act (“FDCPA”). This act creates rules for debt collectors to contact consumers, and if third-party debt buyers do not comply with the proper course of action in its collection attempts, then the act allows damages for the consumer. This act was created to help protect people from harassment by debt collectors. Some things this law specifically prohibits are:
- Debt Collector phone calls after 9:00 p.m. and before 8:00 a.m.
- Debt Collector phone calls after you hire an attorney
- Debt Collector phone calls to your employer
- Debt Collector threatens you with violence, jail, or a criminal action meant to hurt your reputation/property/physical person
- Debt Collector lies and says you owe more money that you think is correct or says that a lawsuit has been filed when one has not been filed
- Debt Collector sends a post card to you stating you owe a debt
15 U.S.C. § 1692, et seq.
If you think that a debt collector has committed one of these offenses, save any written documents you may have, and contact a consumer advocate attorney immediately. You may be entitled to penalties and damages.
In addition, Georgia has its own law known as the Fair Business Practices Act (“FBPA”) which allows for additional penalties and attorney’s fees in some cases.
