Sometimes when you owe a debt it will go to a run-of-the-mill collection agency. And you might have dealt with so many of those at this point that they don’t even impress you anymore.
But a law firm seems different. Looks more frightening. So how worried should you be?
Law firms may be able to get around the FDCPA.
A law firm is only bound by the FDCPA if they can be said to be collecting debts on a “regular basis.” The definition of regular is one big grey area.
Many lawyers will continue to abide by it whether they think they have to or not, just as a matter of prudence. For one thing, the FDCPA guards against abusive and deceptive practices, and there are other entities which might take exception to engaging in such tactics, such as the Disciplinary Board of the Supreme Court of Pennsylvania.
Keep in mind this may be changing. The ABA is currently pushing to exempt lawyers from the FDCPA entirely. They claim existing ethical rules are enough, though there have been numerous instances where the ethics boards were unable to protect consumer’s rights.
Using a law firm has three purposes.
Meanwhile, it’s important to think about why the first party creditor went with a law firm. One of three reasons is probably at play here.
- They know the lawyer may be able and willing to work around the FDCPA.
- They know receiving a letter or a phone call from a law office is a lot more intimidating, even frightening, than receiving one from a collection agency, and they are hoping to use those emotions to coerce you into paying the bill.
- If they decide to sue you over the bill it’s useful to have a lawyer involved from the start. If you’re in our New Jersey service area this is more of a concern than if you’re in our Pennsylvania service area, but the truth is a judgment on your credit report can cause lots of problems even in a state where wage garnishment isn’t available to your creditors.
None of these is good news for you. While the lawyer’s efforts may come to nothing and while the involvement of a debt-collection lawyer does not guarantee a lawsuit, involving a lawyer is playing a form of hardball, if only psychologically.
While you don’t want to panic, you might not want to wait.
Having any debt go into collections is not a sign of a healthy financial life. Having a lawyer for a debt collector is also a sign of a somewhat precarious position.
Instead of continuing to struggle with debt collectors of every stripe, you might just want to give some serious consideration to getting lawyers of your own, and filing for bankruptcy.
Not sure if bankruptcy is right for you? Call us for a free consultation. We’ll go over your financial situation and figure out if filing makes sense in your case.