The statute of limitations functions as an expiration date upon debts,
once a debt has passed a certain point is no longer possible for a creditor
upon that debt to file a lawsuit to collect upon it. Determining when
exactly the statute of limitations has passed is complicated and can vary
based upon the exact sort of debt and the circumstances surrounding the
debt. Our office has filed many Fair Debt Collection Practices(“FDCP”A)
lawsuits in the past against debt collectors who tried to sue our clients
for debts past the statute of limitations, or people who threatened to
sue our client’s for debts past the statute of limitations. Such
cases are generally very strong and we have had very positive results
for our cases in most such cases.
But what about bills which a creditor sends which does not threaten to
sue, but requests payment upon a debt past the statute of limitations?
Is the request for payment itself a violation, absent a threat of a collections
lawsuit if payment is not made?
Different courts in parts of the country have had different rulings on
this matter however a consumer-friendly decision recently came out of
the United States Court of Appeals for the Seventh Circuit, which overseas
Illinois, Indiana and Wisconsin. In the case of Manuel Pantoja v. Portfolio
Recovery Associates(“PRA”), PRA sent a bill to a debtor which
read as follows:
We are offering to settle this account FOR GOOD! Life happens and at times you may fall behind on your commitments. We
understand and are offering you the opportunity to lock in this settlement
offer with a low down payment of $60.00. If settling this account with
the options that we are offering is difficult for you,give us a call.
Other payment options may be available so
please call 1‐800‐772‐1413 for more information.
Please understand, we can’t help you resolve this debt if you don’t
call, our friendly representatives
are waiting. Because of the age of your debt, we will not sue you for it
and we will not report it to any credit reporting agency.
Nothing within the letter itself explicitly threatened a lawsuit. The debtor
filed a FDCPA case against PRA in response, alleging that (I)the letter
should have warned that any payment would renew the statute of limitations,
making them legally responsible for the debt and (II)that the letter was
deceptive in that it stated that PRA
decided not to sue the debtor when the reality was that they
couldn’t sue the debtor and thus the letter was misleading. A lower court sided
with the debtor but PRA appealed to the Seventh Circuit. After examining
both allegations, the 7th held that PRA was being sufficiently deceptive as to try to trick the
debtor into extending the statute of limitations. The 7th also held that PRA tried to intentionally craft its letter to be vague
and confusing and that such intentions was evidence that it was trying
to act deceptively and thus sided against it.
If you would like to read more about the FDCPA and consumers fighting back
against debt collectors, you can find other stories on our blog.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers
with their debt problems,
contact us to see how we may be able to help you.
This document has been provided for informational purposes only and is
not intended and should not be construed to constitute legal advice. Please
consult your attorney in connection with any legal issues related to the
matters discussed in this article as the applicability of state, local
and federal laws may vary.