June 14, 2012
Little guy has little chance against debt collectors
Debt-collection lawsuits dominated the civil caseload at Quincy District Court last year, accounting for 80 percent of the 3,376 cases heard there.
And in upwards of 90 percent of those cases, the debt collectors won, getting judgments to garnish wages and put liens on cars and homes, said assistant court clerk John Dalton.
Consumer protection lawyers say the reason is simple: Defendants are too confused by the process, too poor to hire a lawyer or too scared to show up in court.
Now, some debtors and consumer advocates are fighting what they call unfair and illegal practices by the debt collectors like abusive phone calls and lack of evidence that any debt is owed.
“There are significant problems in the system. We have to do more to protect low-income people who are just being hounded by the creditors,” said Nadine Cohen, who heads the consumer rights unit at Greater Boston Legal Services. “With anyone who has even a little money, (the debt collectors) are very aggressive on garnishing wages.”
Greg DiBella, an unemployed father of three in Quincy, is one of those people. He’s trying to defend himself against a lawsuit from a debt collector seeking about $8,700.
“Their lawyers have called and acted really tough on the phone with me. There’s no compassion,” DiBella said. “I’m just trying to get back on my feet.”
DiBella owned a pizza restaurant in North Quincy for seven years, but it went out of business in 2007, forcing him and his wife to rely on credit cards to survive. One of his daughters is disabled with Down syndrome.
They racked up $6,200 on one credit card, but fees and high interest rates pushed it close to $9,000, he said.
“I kept calling the credit card companies to work with them, and they said no,” said DiBella. “At one point, I was paying about $260 a month, and only $60 was going toward principal. I couldn’t afford it anymore.”
DiBella isn’t tangling with the credit card company anymore but with lawyers who work for a California-based company – Midland Funding – that buys debt for pennies on the dollar and then goes after the debtors.
Legal aid groups like Greater Boston Legal Services can’t do much to help, focusing their limited resources on home foreclosure cases and leaving thousands of people facing lawsuits from debt collectors to fend for themselves.
Dalton, the Quincy court assistant clerk, said Midland Funding is one of the big players bringing lawsuits in that court. But Midland is also a defendant in the crosshairs of consumer lawyers in Massachusetts, Ohio and Minnesota.
Some laws on debt collecting
A creditor must allow you to see any documents that prove that you owe the debt. Failure to do so is an unfair or deceptive act or practice.
Creditors and collection agencies cannot call you at home more than twice for each debt in any seven-day period.
They can’t call you at work if you have requested that they not call. They also cannot use profane or obscene language or tell anyone, including your friends, neighbors, relatives or employers, about your debt, without your written consent.
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