Unfair Debt Collections and Avoiding Bankruptcy
By L. Jed Berliner, Massachusetts Bankruptcy Attorney on Aug 2, 2007 in Massachusetts, North Carolina
A reader asked me to elaborate on my previous post where I said that a consumer might - MIGHT - avoid the need for bankruptcy relief if there was a Fair Debt Collection Practices Act violation.
It isn’t a matter of how serious the FDCPA violation, but it is a matter of (1) how serious are the damages and (2) how many violators there are.
FDCPA gives $1,000 statutory damages to a consumer plus actual damages, which can include emotional distress. Settlement can include a release of the underlying debt. A prospective bankrupt might — MIGHT! — recover enough to release or pay all the debts, depending on the emotional distress involved and the collector’s fear of paying a large judgment if not settled.
My previous blog did not go into additional state Unfair Deceptive And Practices statutes. I’m told that North Carolina provides for $2,000 per violation, which is twice the FDCPA and is per violation not per transaction. The Supreme Court limits FDCPA to each transaction, so one letter with three violations is one FDCPA violation but three NC UDAPs at $2,000 each.
Then there’s my home state of MA which gives $25 per violation under Chapter 93A.
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