The recent case of McMahon v. LVNV Funding et al, 2014 U.S. App. LEXIS 4592 (7th Cir., 2014) held that a letter from a non-attorney debt collector on a time barred debt was false, deceptive and misleading because it used the word “settlement.” “Settlement,” the court reasoned, implied a threat of litigation, even though the letter made did not contain an express threat.
Ironically, and I point out that in the first sentence of this article is “time barred,” which is a legal premise that the underlying debt owed CANNOT BE COLLECTED. The court’s premise in this case is that it is a false and deceptive practice to COLLECT ON TIME BARRED DEBTS. The collections industry needs to quit trying to collect on old “bad” debt and quit complaining about getting slapped around by the courts when they do.
CREDIT SLAVERY is alive and well when creditors engage in unfair and deceptive practices by trying to collect on a debt long after the statute of limitations allows. Statutes of limitations on debt collections are state laws that set a time limit for debt collectors to file suit or otherwise legally collect on a debt. In California, the statute of limitations is four (4) years on a written contract. If the borrower makes even the smallest payment of $1.00, the clock starts all over again and the creditor gets another four (4) years. That’s why they’ll ask for even the smallest of payments!
The debt collection industry relies on consumer’s lack of knowledge of the laws and guilt over not paying their debts. The law puts a limit on the amount of time creditors can collect on debts owed. I recently had two creditors in one of my client’s cases, file claims to be paid on debts from 1999! Silly debt collectors, tricks are for kids!