Settlement Demands and Old Debts

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An interesting decision was issued recently by the Third District Court of Appeals, the case of Tatis v. Allied Interstate, LLC. In the case a debt collector sent a letter to a debtor offering to settle on a very old debt and take less than was actually due. Except that pursuant to the laws of New Jersey, the debt was so old that it was past the statute of limitations, the expiration date for a debt, the point at which a debtor could claims the debt was so old that a Court should not force it to be paid. This tactic is not unusual at all, but the Third District entered a pretty consumer-friendly decision in the case.

The Third District considered the difference between requesting payment, demanding payment, implying that a debt was still legally valid and misstating that a debt was. This issue comes up in Florida courts as well, smarter debt collectors who don’t want to run afoul of the law when collecting old debts usually include a statement in their demands saying something like “If this debt is past the statute of limitations, we won’t sue you” or “This debt is past the statute of limitations, we won’t sue you.” The debt collector did neither of those things in Tatis, they simply demanded payment on a debt which a debtor was no longer legally obligated to pay. The Tatis Court considered whether or not such language was misleading to members of the public and found that it could be, in contravention of 15 U.S.C. § 1692e which forbids debt collectors from utilizing “any false, deceptive or misleading representation or means in connection with the collection of any debt.”

A lower court decision throwing the case out was overturned and the Third District sent the case back to the trial court, to determine if the statements made within the settlement demand were actually false, deceptive or misleading. Given the Third’s order it seems very likely that the trial court will find that such statements were misleading.

If you believe that a debt collector is attempting to collect a debt from you that you do not owe you should contact a qualified attorney immediately. For more information about FDCPA, please visit our website here.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems. We have saved over 1,800 homes from foreclosure, eliminated $100,000,000 in mortgage principal and consumer debt, and have collected millions of dollars on behalf of our clients due to bank, loan servicer, and debt collector violations, negligence and fraud. Contact us for a free consultation 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.