In Massachusetts, a constable is elected or appointed official within a town for serving legal papers.  Oftentimes, the constable is specially appointed by a court to serve outside the usual town.  That’s not enough for protection from violating collection laws.

Federal Magistrate Judith Gail Dein ruled on August 27, 2008 that neither the elected status, nor the court-appointed status, immunized the constable from liability.  A constable was a debt collector, covered by the Fair Debt Collection Practices Act, when it went beyond mere serving, or delivering, a communication.  It could not demand payment of unlawful “poundage” and “constable” fees, or threaten to auction off a car after seizure when it had no intention or authority to do so.

The case is Andrews v. South Coast Legal Services, Inc., 2008 U.S. Dist. LEXIS 69435 (D.Mass. 2008).

The state attorney general may pursue the debt collector but this may be a case that falls under Section 1692d of the Fair Debt Collection Practices Act.  Section 1692d states “A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.”  Arguably this individual/company owner falls in to the definition of any person.  The protections of Section 1692d are not limited to consumer or debt.  They are open to any person and that may include employers, creditors, relatives, friends, and neighbors affected by violations connected with consumer transactions.

When it comes to repossessing property, there are certain conditions that prevent the repo man from carrying out his assignment.  Generally speaking, he cannot:

• disturb the peace, which means that if a confrontation ensues as a result of his repossession efforts, he must back down and go away;
• commit a crime in the process of repossession, which includes assault, battery, breaking and entering or violating a posted “No Tresspassing” sign; or
• violate the automatic stay imposed in a pending bankruptcy case.

If the repo man doesn’t play by the rules, he could be fined, arrested and/or sued for violating the automatic stay and/or the Fair Debt Collection Practices Act.

The Smiths are family farmers who wrote bad checks to the local cooperative for fuel and cattle feed. The Smiths filed a chapter 12 bankruptcy two months later.  The attorneys sued the Smiths in state court to collect the checks.  The Smiths sued the attorneys in bankruptcy court for violation of the bankruptcy stay on collection and for violations of the “Fair Debt Collection Practices Act and the Kansas Consumer Protection Act.

Debtors lost their stay violation claim because they didn’t tell the collection attorneys about the bankruptcy filing. Citing Johnson v. Smith (In re Johnson), 501 F.3d 1163, 1172 (10th Cir. 2007), the Court ruled that recovery under 11 U.S.C. 362(k)(1) requires proof that the creditor knew of the automatic stay and intended the actions, though no specific intent is required.

The Court found the following uncontroverted facts to be true: the Smiths did not respond to collection  letters.  The attorneys filed a collection lawsuit.  The Smiths, knowing they were debtors in a bankruptcy case, did not tell the attorneys about the bankruptcy case in their state court answer to the lawsuit.  In a reply to a counterclaim, the Smiths finally disclosed the bankruptcy.  The collection attorneys dropped the lawsuit once they knew of the bankruptcy.

The Court ruled against the debtors on the consumer violation claims saying the those laws did not apply to Kansas agricultural debts.

They bought the bad debt from a credit card company.  This is now a multi-billion dollar industry, big banks and credit card companies sell charged off debt, that is, debt they cannot carry as an asset on their books, to companies that buy bad debts for pennies on the dollar, then try to collect them.

What did they get?

The debt buying company gets a one page computer printout with your name, account number, and a balance.  No contract between you and Capital One, or, whoever.  No statements.  Not even a breakdown of the principal, interest, late charges, an accounting of how the total balance was calculated.

In Michigan, this is not enough to win a lawsuit.  They cannot prove that you owe the money.

The debt buyers are not concerned with that, as most people do not respond to lawsuits.  With no response, the debt buyer wins by default and moves to garnishment and/or other collection measures.

The debt buyers and their lawyers know this, and frequently drop the suit if met with a response.

So, as always, when you get legal papers like a lawsuit, contact an attorney.  Just because it was filed with a court does not mean it is true.