Posts Tagged ‘debt collection’

Law Firm in New Jersey Strapped in Legal Hassle for Debt Collection Activity

If you find a law firm set to engage in debt collection on behalf of any credit card agency, you can hold that firm responsible for violating State or Federal laws and sue against them immediately. A recent incident in New Jersey shows how Lauri Hudson and her law firm have been strapped into legal hassle for allegedly participating in direct debt collection activity. Not only that, they even sued the debtor Marjorie Chulsky in the Monmouth County court for threatening purpose. Such unauthorized collection practices are the chief reasons for debt management companies to flourish.

Lauri and her law firm have been sued in the court by the plaintiff Marjorie Chulsky. And District Judge Freda Wolfson ruled against the law firm on the ground of transgressing the PSCA (Professional Service Corporation Act). It is a law that prohibits professional corporations to discharge their services in any other domain except their own.

The court proceeding started after offender Marjorie Chulsky brought allegation against Lauri’s law firm for illegally purchasing her $1,195 Master Card debt from her original credit issuer Credit Solution Crop in San Diego in 2008. As a hard copy of evidence she had also produced before the court a bill of sale annexed to her complain file.

The activity on the part of Lauri Hudson’s law firm also goes overtly against the FDCPA laws (Fair Debt Collection Practice Act). Therefore the court is now moving with its judgment based on two distinct violations of FDCPA and PSCA.

Under the provision of 15 U.S.C. §1692e FDCPA laws ‘any false, deceptive and misleading representation or means in connection with the collection of any debt’ will be deemed to be illegal. Here, the exact scenario we find when Lauri Hudson in an attempt to collect the debt from Chulsky sued her in Monmouth County court. According to report, Hudson filled 100 other cases pertaining to debt collection. This is clearly a false or deceptive way of using the law to threaten people. In this respect Chulsky has rightly chosen this provision of the law to take her legal step against her.

Chulsky also made her allegation based on the violation of another provision of FDCPA §1692 e (2)(A). According to this provision a collector cannot misrepresent the ‘legal status of the debt’. Therefore these two laws along with PSCA have been enough to prove the validity of her allegation.

Any law firm has the right to invest in debt obligation but it cannot engage itself in debt collection activity in any way.

However, Chulsky could have taken another legal equipment under the provision §1692f (1) had she challenged the amount of debt incurred. This particular provision delineates that until and unless an amount is ‘expressly authorized by the agreement creating the debt or permitted by law’, no collection activity can be practiced.

Strapped in legal hassle Hudson has appealed to dismiss the claims brought against her individually. She tried to defend her by saying that all the actions were perpetrated on a professional level. However, the judge Wolfson ruled out her claim saying, ‘it is clear that attorneys may be held liable for misleading statements made on behalf of their clients.’

However, Wolfson also banished the possibility of considering the case on the counts of Consumer Fraud Act and Truth-IN-Consumer Contract, Warranty and Notice Act. The judge dismissed the petition because CFA is totally out of context in regard to this case. Because, a debtor cannot be considered as a ‘consumer’, debt is not a ‘sale’ and debt transaction is not ‘merchandise’. And what is most important is that Chulsky did not object the agreement or the contract in any way. Her content of disapproval was focused on the illegal collection practices by law firms.