I Won My Alabama Collection Lawsuit! Now What?
You either received a defense verdict in your favor or the debt collector or debt buyer dismissed the case with prejudice.
Assuming this was not in the context of a settlement (this can sometimes change the dynamics of what it means), then this means you have been found not guilty of what the debt collector accused you of — owing money.
If you do not owe the debt collector money on the account the debt collector sued you on, what does this mean?
It means several positive things:
- The debt collector cannot sue you again for this same account;
- The debt collector must remove this account from your credit report;
- The debt collector cannot transfer or assign this account to another debt collector; and
- The debt collector cannot sell this account to another debt collector.
Let’s look at these points in a little more detail.
The Debt Collector Cannot Sue You Again (Or Collect Again) For This Same Account
You have been found to not owe this debt. So if the debt collector sues you on this account, it is suing you on a debt that you do not owe.
That normally violates the Fair Debt Collection Practices Act (FDCPA) and Alabama state law as it is bogus and frivolous suit. The only purpose of the suit will be to extort money illegally out of you and/or hope that you do not answer and a default judgment is entered against you.
The collection industry, like most industries, has trends. The trend right now is to think consumers, especially in Alabama, are so dumb and stupid that a debt buyer can sue the consumer, lose, and then sue again.
And the collection industry believes no consumer will do anything about it.
And if you do something, say for example you sue the debt buyer and/or the collection lawfirm, then these folks are so outraged and shocked that you would dare to do this! They complain about frivolous suits.
You can’t make this stuff up.
They fail to see the irony in claiming that when you sue them after they illegally sue you twice, somehow they still claim to be a victim.
But the judges we have been in front of are not fooled by this. The law is clear. When there is a violation, the debt collectors have to answer for it.
One step back from actually suing you is when the debt collectors threaten to sue you. After you have won the case. Or they send you collection letters. It is all illegal.
Same problem and same violation as actually suing you. There is no excuse for this and the law does not tolerate this.
I suggest you should not either. Here is an example of an Alabama consumer who did not tolerate receiving collection letters from a law firm after beating the debt buyer in a collection lawsuit.
The Debt Collector Must Remove This Account From Your Credit Report
This is one of the most important points and one that is most often violated by debt collectors after they lose their case against you.
Keep this in mind — when you win your collection case in Alabama this normally means you do not owe the debt to this collector. So, if you don’t owe the debt to this collector, how can the collector report on your credit reports that you owe this debt.
More accurately. It should not.
It is illegal to do this.
But collectors and debt buyers often do this.
Because they rarely get caught and they often get paid on this.
But not with you, right? You are aware of your rights and you won’t allow them to get away with this. Right?
Quick overview of the law.
The FDCPA in section 1692e(8), which deals with misrepresentations, says that debt collectors cannot falsely report on your credit reports. Well, if you do not owe this debt, then if a collector reports it this will normally be a false credit reporting. [I can't think of how it would not but we hate to make absolute statements as there might be an exception somewhere. A side effect of going to lawschool....]
Under the Fair Credit Reporting Act (FCRA), false credit reporting is forbidden. But as a practical matter, there is not much that you can do until you submit a dispute to the credit reporting agencies (Equifax, Experian, Innovis, Trans Union, etc). Then when they notify the debt collector of your dispute, that collector must do a reasonable investgation.
If the collector knows you don’t owe the debt, because it lost its case against you, it seems hard to imagine how it could reasonably investigate and still say you owe the debt.
To the defense lawyers reading this — yes I know you can come up with some reason but I’m talking about a legitimate reason. I’ve heard defense lawyers argue to judges “Judge, we didn’t even know we had sued the consumer so how can we be expected to know we lost.”
“We file so many lawsuits it is really hard to keep up with them.”
These are said with a straight face.
I’m impressed with their ability to “spin” a terrible situation for their client. But I’m unimpressed with these wimpy excuses. Never seen a judge like the excuses either.
Anyway, when the collector does an “unreasonable” investigation and tells the credit reporting agencies to keep this bogus account on your credit report, this violates the FCRA.
You have some choices. Either wait after you have won and see if the debt collector does the right thing by removing the false account from your credit report or you can dispute it with the credit reporting agencies.
There are advantages and disadvantages to each approach and if you live in Alabama let us know and we’ll be glad to look at your individual situation to give you some suggestions.
Bottom line though is if you won your suit, you should not have false credit reporting to deal with — if you do, then take action to get rid of it. Here is an example of an Alabama consumer who won her case, disputed with Equifax, but yet the debt collector (LVNV) kept the bogus account on her credit report. Here is another example of an Alabama consumer suing the debt collector/debt buyer LVNV, Equifax, Experian, and Trans Union after beating LVNV in the collection lawsuit.
The Debt Collector Cannot Transfer Or Assign This Account To Another Collector
We are seeing this more and more.
You get sued.
A few months later you get a letter from a debt collector that says this:
“We have been hired by [the debt buyer who sued you] to collect this debt. If you do not pay this, we will recommend to our client that legal action be taken against you.”
Let’s look at a few obvious problems.
There is no debt to collect.
So this new collector has been hired to collect a bogus debt.
That’s a problem for the new collector — they are collecting a debt they have no legal right to collect.
It’s a problem for the debt collector that lost its collection case against you. Because it is taking action to collect a debt it has no legal right to collect.
Normally the appropriate solution is to invite both the old and the new collector to join you in court for a FDCPA lawsuit. It is interesting to see the blame game that goes on.
We are also seeing this more and more often with the same lawfirm that sued you (and lost) sending you a new collection letter. As if they had forgotten they had sued you and lost.
It is remarkable and cannot be explained by saying the collection lawyers are sloppy or lazy or incompetent.
The collection lawyers we know are none of those things — instead they are very good at collecting debts.
If they are sending you a collection letter after you won your case — and the collection letter is on the same account — it is not an accident in our opinion. You can read about an Alabama consumer who sued the debt collector LVNV and a collection lawfirm called Budzik for continuing to collect after the Alabama consumer won her LVNV collection case.
Instead it is an attempt to force you into paying money you do not owe.
So you can either pay it, ignore it (and possibly get sued or have false credit reporting –see above), or you can sue to stop it.
Get with a consumer lawyer to see which is the best approach for you.
The Debt Collector Cannot Sell This Account To Another Debt Collector
This is similar to the previous entry but we have included it because sometimes debt collectors think it makes a difference if they sell the account to another collector as opposed to simply hiring the other collector to collect the (non-existent) debt.
It does not make a difference.
It is still a cry for help from both collectors for you to consider suing them and letting them pay you money damages.
OK — I’ll admit they don’t view it that way but I don’t know how else to look at it.
They know you don’t owe this debt.
They sell it to some other collector. Why would any other collector pay for it?
To collect the (non existent) debt from you.
Now when we sue both collectors, often the new collector will say they did not know the debt wasn’t owed. If this is true, and they had proper procedures in place, they may escape liability under the “Bona Fide Error” defense.
But they have to throw the original collector under the bus for sending them a bogus account.
Wow. They do not like doing this.
Instead they say things like “Well, we don’t know if you owe the debt. It was just a Small Claims judge after all.”
That happened one time and a federal judge sharply rebuked the lawyer for the debt collector by saying any judge’s order would be followed and she was not going to revisit the issue of whether the debt was owed.
But ultimately, the collectors know when you sue them after they have broken the law that there is a day of reckoning coming.
They don’t like it but that’s the way it is.
So, if you have won your case in Alabama and you do not owe the collector any money, don’t let them get away with selling the account and having another collector illegally collect against you.
Bottom Line — Take Action!
If you have won your case in Alabama — congrats!!
Now be alert for any of these four illegal collection tactics by debt collectors.
Take very seriously any threat or actual suit against you for this same debt.
Check your credit reports to see if this bogus debt is still being reported by the collector that lost its case against you.
If you receive calls or letters from other collectors who have been hired to collect the debt, even if they are collection lawfirms, document this as you may need to sue the (ir)responsible parties.
Finally, if a debt collector says it bought this bogus debt and is threatening you, normally you will want to invite them (and the original debt collector) into court to have a sit down with the judge.
In all of these situations it reminds me of what a lawyer we used to work with would say: ”Someone has some ‘splaining to do.”
If you live in Alabama, feel free to pick up the phone and call us to set up a phone or in person meeting for free. You can call us at 205-879-2447.
You have knowledge — now combine that with decisive action to protect your rights and obtain the legal relief that you are entitled to from these abusive debt collectors.