How Will An FDCPA Claim Help My Credit?

By: Robert J. Nahoum

A man in suit and tie with his arms crossed.

Often the best ideas for blogs come directly from questions my clients ask me. Recently, I had a Hudson Valley client for whom we are pursuing debt collection law violations ask how pursuit of those claims might help to improve his credit score.

Initially, I was thrilled that he was concerned with his credit and thinking into the future. When I considered my answer to his important question I realized that consumers like him have been overwhelmed by offers to “improve your credit†and “get out of debtâ€. There are commercials everywhere I look; some even come with catchy jingles that you sing in your head. Despite all the noise, the answer is fairly simple; cleaning debt from your credit can be accomplished in three ways:
(1) Paying off your debts or some negotiated/settled portion thereof;
(2) Successfully challenging inaccurate debt entries on your credit report.
(3) Eliminating your debt through bankruptcy.

It is not uncommon to find inaccurate debt entries on your credit report and there is an entire body of law devoted to ensuring the accuracy of those reports called the Fair Credit Reporting Act.
However, ultimately, most people who find themselves with bad credit have accurate negative credit entries. They are reminded of this every day when they get debt collection letters in the mail and phone calls from pushy debt collectors.

For some, bankruptcy is not an option for a variety of reasons; perhaps they earn too much income to file a chapter 7 liquidation, perhaps there are non-exempt assets they want to keep but would have to give up in a bankruptcy.

So we are left with paying off and/or settling the debts. The problem for most is they don’t have the money to do this.

The Fair Debt Collections Practices Act (the FDCPA) protects consumers from unscrupulous debt collection practices. If a debt collector is found liable for violating these protections, the debt collector is on the hook to you the consumer for at least $1,000.00 in statutory damages. Not only that, if successful, the debt collector will have to pay your lawyer’s fees. So, you can sue that debt collector and it won’t cost you a penny.

There are a few ways pursuing FDCPA claims can be used to settle and/or pay off your debts and consequently improve your credit.

(1) If an FDCPA claim is discovered and you are successful in pursuing that claim, the money you are awarded can be used to go towards paying off the debts; and
(2) If a debt collector is also a creditor of yours (as is the case with debt buyers) and an FDCPA violation is discovered, the FDCPA claim can be used as an offset to that debt you owe.

The most common FDCPA violations include:

• Communicating with you when they know you have an attorney.
• Misrepresenting the amount or status of the debt.
• Suing you for a debt for which the statute of limitations has expired (usually 6 years).
• Calling your friends and family to get you to pay the debt.
• Adding unauthorized fees to the account.
• Making false threats to garnish your wages without intending to do so.
• Falsely threatening to sue you without the intention of doing so.
• Attempting to collect a debt discharged in bankruptcy.

If a debt collector violates the FDCPA, you can sue for statutory damages up to $1,000.00 plus actual damages (like pain and suffering) and your attorney’s fees.  In FDCPA cases, most good consumer lawyers don’t charge their clients a penny out of pocket.

The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202