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Is debt collector violating the FDCPA?

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addmin13

Junior Member
Indiana

I owe back taxes to the state. They outsource to a debt collector. The debt collector sent me a letter on August 10th stating what I owed and to call them and seek arrangements. On September 1st there was a tax levy sent to my financial institution. Funds were frozen in two savings accounts and partial funds were frozen from a checking account. I called the debt collector to have the tax levy removed and to set up payment arrangements. They said they wouldn't work with me because they were able to collect the entire amount owed with the tax levy. I spoke with a manager at the company and mentioned the FDCPA and the 30 days I was allowed in order to dispute the debt. He claims because of Indiana Tax Code 6-8.1-8-4 what they did was legal and doesn't fall under the FDCPA. On September 3rd, the funds were dispersed from my accounts to the debt collector.

Because this is in regards to a tax warrant, does the debt collector not need to abide by the FDCPA? The letter they sent me didn't include the text about having 30 days to dispute they debt. Isn't that a violation? Also, they sent the tax levy to my financial institution and secured the funds before the 30 day time period was up. Isn't that also a violation? When I asked the manager if they were a debt collector, he was reluctant to say "yes", but finally did. Every time I questioned him about the FDCPA he repeated the Indiana Tax Code mentioned above.

Thank you.
 


adjusterjack

Senior Member
Read the tax code.

It trumps the FDCPA.

The debt collector did nothing wrong.

Figure out a way to pay the balance or quit keeping your money in banks.

By the way, your pay can also be garnished without warning. That could be happening soon.
 

FlyingRon

Senior Member
You seem confused about the FDCPA even if it applied in your situation (note that the private debt collector can't issue tax levies so that it would be the state who did that and the federal government and the states are specifically exempted from FDCPA).

The 30 day period isn't some obligatory stay where you can work things out. What it says is that within 30 days of the initial contact you have the right to send in your dispute the debt. The collection activities are only stayed for as long as it takes the collector to respond by sending you the name and the address of the original creditor. Almost certainly you've already received that notice anyhow.
 

addmin13

Junior Member
Read the tax code.

It trumps the FDCPA.

The debt collector did nothing wrong.

Figure out a way to pay the balance or quit keeping your money in banks.

By the way, your pay can also be garnished without warning. That could be happening soon.
I've read the tax code in question. It gives the state permission to employ special counsel or contract a collection agency for the collection of a delinquent tax... I'm not disputing their ability to do that, what I'm questioning, is once they contract the collection agency, don't they fall under the rule of the FDCPA, just like every other collection agency? Because the state employs them, they are immune to it? And since when does state law trump federal law?
 

addmin13

Junior Member
You seem confused about the FDCPA even if it applied in your situation (note that the private debt collector can't issue tax levies so that it would be the state who did that and the federal government and the states are specifically exempted from FDCPA).

The 30 day period isn't some obligatory stay where you can work things out. What it says is that within 30 days of the initial contact you have the right to send in your dispute the debt. The collection activities are only stayed for as long as it takes the collector to respond by sending you the name and the address of the original creditor. Almost certainly you've already received that notice anyhow.
In this case a private debt collector can issue a tax levy. The state delegates that power to them (which I've heard is a legal gray area).

I guess I am confused about the 30 day period. They can collect (by way of levy, in this case) before the 30 days has even passed? How does that work if I dispute the debt and I'm in the right? They issue a refund on the funds seized? I have not sent in a letter disputing the validity of the debt, yet. I still have six days to do so.
 

adjusterjack

Senior Member
I have not sent in a letter disputing the validity of the debt, yet.
On what grounds will you dispute the validity of the debt?

In your first post you wrote:

"I owe back taxes to the state."

If the levy covered even a part of what you owe then there is no disputing the validity of the debt and doing so will not get you any money back.

Answer these questions:

How much do you owe?

How much did the levy take?
 

addmin13

Junior Member
On what grounds will you dispute the validity of the debt?

In your first post you wrote:

"I owe back taxes to the state."

If the levy covered even a part of what you owe then there is no disputing the validity of the debt and doing so will not get you any money back.

Answer these questions:

How much do you owe?

How much did the levy take?
I apologize, I phrased that incorrectly. I don't plan on disputing the validity of the debt. I understand I owe the money and have every intention of paying the debt. I would, however, like to do it in a way that is not detrimental to my finances. I owe(d) $1600 and the levy took $1600. The money in those accounts was for other things though (rent, utilities, child support, etc.). I wanted to set up payment arrangements with them, but it appears that isn't an option now.

I was only referring to disputing the debt in the context of the FDCPA. I was under the impression that they couldn't use a levy or garnishment until the time had passed for me to potentially dispute the debt (the 30 days). I guess I incorrectly assumed the 30 days was a "buffer" in which time I could set up arrangements and avoid the levy (or garnishments). In that way I thought they were violating the FDCPA. One, for not allowing me the 30 days before they collected on the debt and two, for not even stating in the only letter they sent me that I had 30 days.
 

FlyingRon

Senior Member
Again, the 30 days is the window for YOU to file your dispute. All they need do is respond as I stated and they can resume.

The case didn't even go to the collector until after you were notified and 45 days subsequently have passed. You've been notified several times.
 
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adjusterjack

Senior Member
I apologize, I phrased that incorrectly. I don't plan on disputing the validity of the debt. I understand I owe the money and have every intention of paying the debt.
Intending to pay is not the same as paying. You could intend to pay for the rest of your life and still not pay.

I would, however, like to do it in a way that is not detrimental to my finances.
Unfortunately, you waited too long and that ship sailed.

I owe(d) $1600 and the levy took $1600. The money in those accounts was for other things though (rent, utilities, child support, etc.). I wanted to set up payment arrangements with them, but it appears that isn't an option now.
That's right. They've got the money.

The Moving Finger writes; and, having writ,
Moves on: nor all thy Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all thy Tears wash out a Word of it.
(Omar Khayyam)
 

addmin13

Junior Member
Again, the 30 days is the window for YOU to file your dispute. All they need do is respond as I stated and they can resume.

The case didn't even go to the collector until after you were notified and 45 days subsequently have passed. You've been notified several times.
It seems I'm out of luck and I'm just trying to understand at this point.

In regards to the FDCPA, does any time accrued since the original debt was owed start when the original creditor contacted me, or when the debt collector contacted me? The debt has been transferred from the state of Indiana to the debt collector and the debt collector has only sent me one notice and that notice was sent on August 10th. The notice contained the amount of the debt, the name of the original creditor (no address) and information to contact them and set up arrangements. According to the FDCPA, don't they have to also include a statement about disputing the validity of the debt withing 30 days; a statement that, if disputed, the debt collector will obtain verification of the debt and mail it to me; a statement that, upon written request, the debt collector provide me with the name and address of the original creditor? I'm looking at section 809 - Validation of debts in the FDCPA. They didn't include any of that and I'm curious as to why.

Also, say this wasn't my debt and they were mistaken. I send a letter off today disputing the debt (which is still within 30 days of August 10th) and found to be in the right. Would there be any ramifications to them for already having issued a levy and collecting the money?

By the way, thanks for the replies guys. This has been very informative and I really appreciate the time you're taking to help explain things to me.
 

adjusterjack

Senior Member
It seems I'm out of luck and I'm just trying to understand at this point.

In regards to the FDCPA, does any time accrued since the original debt was owed start when the original creditor contacted me, or when the debt collector contacted me? The debt has been transferred from the state of Indiana to the debt collector and the debt collector has only sent me one notice and that notice was sent on August 10th. The notice contained the amount of the debt, the name of the original creditor (no address) and information to contact them and set up arrangements. According to the FDCPA, don't they have to also include a statement about disputing the validity of the debt withing 30 days; a statement that, if disputed, the debt collector will obtain verification of the debt and mail it to me; a statement that, upon written request, the debt collector provide me with the name and address of the original creditor? I'm looking at section 809 - Validation of debts in the FDCPA. They didn't include any of that and I'm curious as to why.
Well, there are no telepaths participating here so you'll have to seek that answer from the debt collector.

Isn't likely to do you any good or make any difference or give you any recourse. It's likely that the debt collector was working on behalf of the tax authority and did not own the debt. It's likely that the debt collector advised the tax authority that you did not respond to the notice and then the tax authority levied your bank account.

So let's concede that the debt collector violated the FDCPA. Then what?

Look at Section 813 - Civil Liability

(a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title with respect to any person is liable to such person in an amount equal to the sum of --

(1) any actual damage sustained by such person as a result of such failure;

(2) (A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000;


You didn't sustain any actual damages. You owed $1600. You were delinquent $1600. They got $1600. You were certainly inconvenienced but not damaged under the law so there's no actual damages and no additional damages.

Next is

(c) A debt collector may not be held liable in any action brought under this title if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.

So, you call up and ask why the debt collector why he didn't do such and such. He looks up the file and says "Oh, we made a mistake, sorry."

Then what do you do?

Also, say this wasn't my debt and they were mistaken. I send a letter off today disputing the debt (which is still within 30 days of August 10th) and found to be in the right. Would there be any ramifications to them for already having issued a levy and collecting the money?
If it wasn't your debt, presumably you would have your tax returns and cancelled checks and other documentation that you would have sent immediately upon notice from the debt collector and would have avoided the levy. So your question is a bit silly, isn't it? No more "what ifs", OK.
 

addmin13

Junior Member
Thanks for the responses guys.

It seems I misunderstood how the FDCPA actually works. In my case, it doesn't protect me at all. Even had they broken the rules collecting the debt, I still owed it so under Section 813, "no harm, no foul". Seems silly, but I guess that's how it works.

I know the FDCPA doesn't protect me from paying the debt (I wasn't trying to get out of paying), but I thought it did protect me from how that debt was collected. According to what I've read here, the state of Indiana can give my debt to a third party, who can fashion a letter about the debt and, theoretically, levy my accounts before I even receive the letter.
 

adjusterjack

Senior Member
It seems I misunderstood how the FDCPA actually works. In my case, it doesn't protect me at all. Even had they broken the rules collecting the debt, I still owed it so under Section 813, "no harm, no foul". Seems silly, but I guess that's how it works.
Yes, that's how it works. A lot of laws work like that.

According to what I've read here, the state of Indiana can give my debt to a third party, who can fashion a letter about the debt and, theoretically, levy my accounts before I even receive the letter.
That's not what happened.

You got the notice on August 10 and the levy was September 1.

And, subject to verification by your bank, it's likely that the levy was done by the state and not by the debt collector. Check on that.

Anyway, it's time you "have the wisdom to accept what you can't change," get over it and move on. We're kicking a dead horse here.
 

addmin13

Junior Member
Yes, that's how it works. A lot of laws work like that.



That's not what happened.

You got the notice on August 10 and the levy was September 1.

And, subject to verification by your bank, it's likely that the levy was done by the state and not by the debt collector. Check on that.

Anyway, it's time you "have the wisdom to accept what you can't change," get over it and move on. We're kicking a dead horse here.
No, it's not what happened, but it COULD have according to what I've read here.

And the levy was done by the debt collector, not the state. Even the disbursement by my bank was directly to the debt collector.

Don't mean to seem like I'm kicking a dead horse, sorry. I find this stuff kind of interesting and like talking about it, even outside of my problem.
 

adjusterjack

Senior Member
No, it's not what happened, but it COULD have according to what I've read here.

And the levy was done by the debt collector, not the state. Even the disbursement by my bank was directly to the debt collector.

Don't mean to seem like I'm kicking a dead horse, sorry. I find this stuff kind of interesting and like talking about it, even outside of my problem.
Then we are back to "no harm, no foul" as you put.

Oh, you are free to file a lawsuit and try to convince a judge of "the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional."

I'm done.
 

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