Debt Collection

Wisconsin Department of Financial Institutions Releases Emergency Guidance on Prohibited Debt Collection Practices

by James Gollnick James Gollnick

On April 13, 2020, The Wisconsin Department of Financial Institutions (“WI DFI”) released a guide titled “Emergency Guidance on Prohibited Debt Collection Practices,” along with a cautionary, interpretive letter issued from the WI DFI to a debt collector meant to serve as an example of impermissible practices.  The perceived intent of the guide is to encourage debt collectors to act reasonably during the current pandemic, and also to warn of the debt collection practices that are prohibited by the Wisconsin Consumer Act. Read more

Disabled Veterans Get Automatic Discharge of Federal Student Loans

by Stacie Hackel Snow Stacie Hackel Snow

After more than a year of urging by Democrats and Attorneys General from over 51 states and territories[1] (including Ohio Attorney General David Yost)[2], and more than a month after the introduction of a bi-partisan bill called the Federally Requiring Earned Education-Debt Discharges for Veterans Act, 100% disabled veterans will have their federal student loans fully discharged.[3]   Due to the combined efforts, on August 21, 2019, President Trump issued an Executive Memorandum directing the Secretaries of Education and Veteran Affairs to create a more streamlined process for Totally and Permanently Disabled Veterans to obtain forgiveness of their student loans.[4] Read more

Bill Reducing Ohio’s Statute of Limitations Raises Concerns for Creditors

by Michael Lewis Michael Lewis

Introduced May 21, Ohio H.B. 251[1] has been referred to the House’s Civil Justice Committee. This bill is essentially a re-introduction of the previously withdrawn H.B. No. 694 from May 2018.[2] H.B. 694 was withdrawn from committee consideration in early December 2018. KWA previously reported on this in January.[3]

H.B. 251 would amend R.C. 2305.06 and R.C. 2305.07 by reducing the statute of limitation on written contracts from eight (8) years to three (3) years and from six (6) years to three (3) years on non-written contracts. Section 4 of the bill mandates for written or non-written contracts that, “the period of limitations for causes of action would be three years from the bill’s effective dates, or the expiration of the period of limitations that was in effect prior to the bill’s effective dates, whichever occurs first.” Read more

Ohio House Bill 694 Proposes Shortening of Statute of Limitations

by Stacie Hackel Snow Stacie Hackel Snow

Creditors should keep a watchful eye on the state capital this new year, as there may be a significant updates to Ohio Revised Codes §2305.06 and 2305.07.  On May 22, 2018, Rep. George Lang introduced House Bill 694, which proposes to shorten the statute of limitations for all contracts.  Co-sponsors of the bill include: Rep. Reineke, Rep. Riedel, Rep. Romanchuk, and Rep. Becker. Read more

Judge Issues Final Ruling In CFPB V. WWR

by Jessica Lamoreux Jessica Lamoreux

Judge Nugent issued his final ruling in Consumer Financial Protection Bureau v. Weltman, Weinberg, & Reis Co., LPA on July 25, 2018. This decision was a big win for Weltman and the creditors’ bar generally. In this case, the Consumer Financial Protection Bureau (“CFPB”) argued that Weltman violated the Fair Debt Collection Practices Act (“FDCPA”) by sending letters to debtors on its letterhead, under the theory that the letters constituted an implicit representation that an attorney had been meaningfully involved in the file, when in fact no attorney had been so involved. The Court held that Weltman did not violate the FDCPA in sending demand letters on its letterhead because attorneys were meaningfully involved in the handling of the files on which letters were sent. Read more

Jury Makes Findings in CFPB v. WWR

by Jessica Lamoreux Jessica Lamoreux

The case brought against Weltman, Weinberg, & Reis (“WWR”) by the Consumer Federal Protection Bureau (“CFPB”) moved one step closer to resolution, if not clarity, this month. Senior U.S. District Judge Donald Nugent will issue a verdict after considering the jury’s conclusions of fact, which were returned on two questions:

  • Did WWR’s initial demand letters contain “false, deceptive, or misleading representations or means”? The jury concluded that they did.
  • Did the CFPB prove that WWR’s attorneys were not meaningfully involved in the debt collection process? The jury concluded that it did not.

Read more

A New Barrier: the Least-Sophisticated Consumer & Language Barriers

by Sasha Lemon Sasha Lemon

A majority of federal court circuits have adopted the least-sophisticated consumer standard in analyzing Fair Debt Collection Practices Act (FDCPA) claims. The least-sophisticated consumer standard is to ensure that the FDCPA protects gullible as well as shrewd consumers. Creditor Rights advocates have had to contend with this standard, which essentially lowers the burden for a consumer, for years. Although the standard provides deference to the consumer, it is still fairly objective; it merely asks whether the least sophisticated consumer would have been misled by the actions of the debt collector. Read more

Collecting Through the Bankruptcy Process

by Scott Paris Scott Paris

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act to amend the United States Bankruptcy Code (the “Act”). The changes made to the Act were designed to make it theoretically more difficult for people to file Chapter 7 Liquidation bankruptcy, forcing more filers into reorganization (repayment) through a Chapter 13 bankruptcy. While these changes had the intended effect in the short term, the 2007 financial crisis threw a wrench in the gears of Congress’s intent in amending the Act. According to the U.S. Bankruptcy Courts, the number of filings consistently increased from 2006 through 2011, and by 2010 had reached pre-2005 amendment levels. Since 2011, filings have steadily decreased. This decrease is good for both the economy and the collections industry, but as collection attorneys, knowledge of the Bankruptcy Act and Rules is necessary for a successful practice. Read more

Telephone Consumer Protection Act Compliance

by Scott Paris Scott Paris

The Telephone Consumer Protection Act (“TCPA”) was passed in 1991, largely as a response to what Congress saw as an excess of unsolicited telemarketing and facsimile communications to residential, emergency and mobile telephone numbers. At its inception, the TCPA did not appear to be directed toward the regulation of debt collection phone calls where an existing commercial/consumer relationship existed. However, over the past 20 years the FCC and various Courts have applied the dictates of the TCPA to debt collectors, specifically those who call consumer debtor mobile phones. Read more

Judicial conference increases amounts exempt from execution

by Crystal Duplay Crystal Duplay

Beginning in April 2010, and continuing every 3rd year, the judicial conference shall adjust amounts that are exempt from execution.[i]   This adjustment is based on the consumer price index for all urban consumers or other comparable lists.[ii]  The adjustments include, but are not limited to, exemptions for vehicles, jewelry, wages, and bank attachments.  In 2013, this amount for bank attachments was adjusted from $425.00 to $450.00.  Read more