FDCPA or Bankruptcy? Remedies for Arizona Debtors to Stop Collection Abuse and Harassment.

Both the FDCPA and Bankruptcy give Arizona consumers possible remedies for stopping collection harassment and abuse.  The FDCPA allows Arizona consumers to recover damages from third party collectors who have harassed them, thus usually stopping any continued harassment.  Bankruptcy, on the other hand, usually stops collection harassment with an injunction against all collection activity. (I say usually, as sometimes the harassment continues even after filing bankruptcy)

Many Arizona debtors find that they need to file for bankruptcy, but do not have the money needed to pay the lawyer’s fee up front.  Some law firms will sign up the client, but do not file the bankruptcy case until all the lawyer’s fees have been paid — sometimes as much as $2,000 - $3,000 — which may take up to six months or more to pay.  In the meantime, the collection harassment continues with no apparent remedy.

Use Both FDCPA and Bankruptcy!

My experience has been that many Arizona debtors have one or more existing claims against third party debt collectors by the time they meet with a bankruptcy lawyer.  Under the FDCPA, the consumer is entitled to recover damages, including statutory damages of up to $1,000, from the violating collection agency.  If pursued, these FDCPA cases may provide the additional money needed to pay the bankruptcy lawyer’s fees.  So, by using the FDCPA, Arizona consumers are able to ultimately file their bankruptcy cases sooner, and with less money directly out of their own pocket.

If You Are Considering Bankruptcy, Please Call BYBEE LAW CENTER, PLC.

If you are considering filing bankruptcy, and you have collectors calling you about your debts, please call Floyd W. Bybee at (480) 756-8822 for a free phone consultation to see if he can help you.

Fair Debt Collection Practices Act (FDCPA) Prohibits Collection of Fees and Charges Not Authorized by Contract or By Law.

The Fair Debt Collection Practices Act, or FDCPA, prohibits a collector — including collection agencies, bad-debt buyers, and lawyers — from collecting or attempting to collect any amount unless such amount is expressly authorized by the contract or agreement creating the debt, or is permitted by law. 15 U.S.C. § 1692f(1). This includes the addition of interest, collection fees, and attorney’s fees.

If, for instance, you borrowed $1,000 from the credit union, and now the collection agency is asking for $1,000 plus interest, plus some other fee, then you might be a victim of collection abuse.

Collection Agencies Regularly Add Collection Costs to the Debt.

The addition of interest, collection fees, and other charges has become common place for many Arizona collection agencies. In fact, adding 50% to an apartment debt is almost universal these days. The answer to whether such charges or fees are legal is not always clear.

Many Arizona landlords, at the direction of their collection agencies, have added clauses to their lease agreements providing that collection fees will be added to the balance owed in the event the debt is assigned to a collection agency. Some of these collection agencies even specify a certain percent to be added, such as 30% or 50%. Then, on top of these fees, the agencies will add interest. Soon, a $1,000 debt becomes $1,500 then $2,000. When a collection lawyer gets involved, attorney’s fees are added effectively doubling or tripling the original amount claimed to be owed.

Arizona Consumer Sues Tempe Collection Lawyer Over Addition of Attorneys Fees.

My office recently filed suit against a Tempe collection lawyer, Mark A. Kirkorsky and his law firm, Mark A. Kirkorsky, P.C., for adding $3,753.62 in attorney’s fees to a deficiency balance of $13,543.27 on a repossessed truck. That is a 27% surcharge for the lawyer’s fees! All that had been done at that point was the mailing of one form letter.

Even though the loan agreement provides attorney’s fees in the event of legal action, these fees were added in the very first letter sent to the debtor. Our lawsuit alleges, among other claims, that the addition of these fees was illegal under the FDCPA.

What Can Be Done?

If you are an Arizona consumer and have received a collection letter or collection lawsuit showing the amount claimed to be owed is more than it should be, then you need to determine if the collector is overreaching and violating the FDCPA. If so, then not only should you not pay the illegal fees or charges, but you also have a claim against the collection agency or law firm for violating your rights under the FDCPA.

If you think your rights have been violated,

Call Floyd W. Bybee at the BYBEE LAW CENTER, PLC
(480) 756-8822 to set up a free consultation.

Credit Reporting After Bankruptcy; Or How to Start Your "Fresh Start"

Most Arizona consumers file bankruptcy in order to get a “fresh start” on their financial life. Yet, it is not uncommon for this fresh start to be spoiled by one or more creditors that refuse to acknowledge the bankruptcy and to continue to report their accounts to the credit reporting agencies or credit bureaus as if there was no bankruptcy.

Post Bankruptcy Credit Reporting.

Its debatable whether historical information concerning an account pre-bankruptcy can remain on the credit report. However, there is no debate that a creditor cannot report post-bankruptcy information concerning an account such as a current balance owed, a post-bankruptcy charge-off, or a foreclosure proceeding that occurred after the bankruptcy.

Obtaining Copies of Your Credit Reports.

All Arizona consumers should obtain copies of their credit reports about 60 to 90 days after their bankruptcy discharge to see if the creditors have properly updated their accounts to the credit reporting agencies.

The three primary national credit reporting agencies, or credit bureaus, are Experian, Trans Union and Equifax. You can obtain your updated credit report from each of these agencies by going to annualcreditreport.com. These reports should be free unless you have already received your reports within the past year. (There are many look-a-like or sound-a-like websites, but this is the one set up by the reporting agencies as required by federal law. It is advisable to stay away from the others.)

Many Creditors Will Not Update Credit Report Automatically.

Once you have these reports you should review them carefully for errors and to make sure each account included in your bankruptcy has been updated to show a status of “included in bankruptcy.” Some creditors will update the account status to the credit bureaus automatically, but many do not.

Disputes Need to Be Sent Certified Mail, Return Receipt Requested.

If any accounts have not been updated, then you need to send a letter to that particular credit bureau stating that the account was included in your bankruptcy, giving the case number and the filing date, and requesting that the account be updated accordingly.

Your dispute letters must be sent via certified mail, return receipt requested so that in the event your credit report is not corrected or updated, then you have proof of the dispute and proof that the credit bureau received your dispute. If you chose to dispute the accounts on line, which is what the credit bureaus prefer, then you have no proof of your dispute or that the credit bureaus received it. In other words, DO NOT DISPUTE ON LINE.

What to Do If the Accounts Are Not Corrected.

If the dispute process corrects the errors, or updates the report to show the accounts as included in bankruptcy, then you are set. However, if the errors are not corrected, or the updates are not made to each of the accounts, then you need to seek a consumer lawyer to assist you in proceeding against the credit bureau and/or the creditor for false credit reporting.

Contact a Lawyer Experienced in the Fair Credit Reporting Act.

Floyd Bybee of the BYBEE LAW CENTER, PLC represents Arizona consumers who have credit reporting issues under the Fair Credit Reporting Act or FCRA. Bybee exclusively represents Arizona consumers in the areas of false credit reporting, collection harassment, and other consumer credit issues.

If you would like a free phone consultation to see if Bybee may be able to assist you, please call (480) 756-8822.

Two More Courts Hold that Statute of Limitations on Credit Cards in Arizona is Three (3) Years.


Arizona Legislature Changes Statute of Limitations on Credit Card Accounts.

The Arizona Legislature recently changed the law to make most credit card collection cases subject to a six year statute of limitations. A.R.S. Sec. 12-548 now states that "if the indebtedness is evidenced by or founded on . . . a credit card. . ." it is subject to the six year statute of limitations.

The following cases will no longer provide the persuasive precedent that we have previously enjoyed.

Recent Cases.

The East Mesa Justice Court in Maricopa County recently followed the holding in the DSS Financial v. Walrod case and dismissed a collection lawsuit brought by a bad-debt buyer, Action Financial, LLC, holding that the statute of limitations on a credit card account is three (3) years. See Action Financial, LLC v. Long, CC2008005084.

The West Mesa Justice Court of Maricopa County also recently held that the debt, which was an old credit card account, was an open account and thus barred by the three (3) year statute of limitations under A.R.S. § 12-543. See Action Financial, LLC v. Foran, CC2008189319.

The holdings in these two cases do not conclusively settle the debate over the statute of limitations on a credit card debt in Arizona. However, as more and more Arizona courts hold that credit card debts are subject to the three (3) year statute of limitations, bad-debt buyers will be less likely to file these stale suits, or at least more likely to dismiss them if challenged.

What to Do If You Have Been Sued on an Old Credit Card Debt?

The worst thing you can do is do nothing. That is what these bad-debt buyers hope you will do – nothing, so that they will get their judgment. Once a judgment is entered, and unless it is set aside by the court, the debt now becomes collectible even if the debt was stale and beyond the statute of limitations, and uncollectible, when the case was filed. So you must do SOMETHING.

The best something is to fight back. You may have one or more defenses to the suit. The debt may be old, such as the cases noted above, or the bad-debt buyer may not be able to prove that it is the current owner of the debt. Other defenses include identify theft, unauthorized use of the credit card, or fraud.

Help For Arizona Consumers is Available.

Many Arizona consumers believe that they cannot afford to hire an attorney to assist them in defending the lawsuit. However, there are several attorneys in the Mesa-Phoenix area who defend consumers in these debt collection cases, and their fees are reasonable, and likely to be a much better alternative than to have an unwarranted judgment entered against you.

Floyd Bybee of the BYBEE LAW CENTER, PLC represents Arizona consumers who have been sued on old credit card accounts.

If you would like a free phone consultation to see if you might have a defense to the lawsuit, please call (480) 756-8822.

Should I Pursue My FDCPA Claims?

Many times I am asked by Arizona consumers whether they should pursue their claims under the federal Fair Debt Collection Practices Act (FDCPA). My answer is usually yes, and always starts with an explanation of the purposes of the Act.

FDCPA Intended to Protect Consumers From Abusive Collection Practices.

Congress stated that the purpose of the FDCPA is to protect all consumers from abusive, deceptive, and unfair debt collection practices. Even though not all consumers who are abused file suit, or even know they have any protection under the law, each individual consumer who does bring a claim under the law adds to the cumulative effect of coercing collection agencies into complying with the FDCPA. Thus, not only do these consumers recover the damages they have personally suffered as a result of the collection abuse, but the collection agencies are more likely to comply with the law in order to avoid similar court actions from other consumers.

Enforcement of the FDCPA also Levels the Playing Field for Ethical Debt Collectors.

Part of the benefit from enforcing the FDCPA, is that ethical collection agencies — the ones who are polite, and truthful, and respectful — are not put at a competitive disadvantage to those agencies who fail to comply with the FDCPA. That may not seem to be much of a benefit to the consumer, but it really is. Almost all Arizona consumers with whom I meet, are not looking for a way to avoid or delay paying a legitimate debt. They just need the harassment to stop so that they can keep their job, avoid filing bankruptcy, and eventually pay the debts they legally owe. So by raising the compliance level of all collection agencies, fewer Arizona consumers are suffering the effects of collection harassment and will ultimately be in a better position to pay the debts they owe.

I Can Help.

If you are an Arizona debtor and are being abused or harassed by a collection agency or other debt collector, find out what your rights are and whether you have any claims.

Feel free to call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 to set up a consultation.


My office recently filed suit on behalf of an Arizona consumer against National Credit Systems, Inc. out of Atlanta, Georgia for violations of the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA). The suit alleges that National Credit Systems reported an old apartment debt from 1994 on the consumer’s credit report in 2009, even though it was 15 years old. The consumer first learned of National Credit Systems’ reporting of the account when he was attempting to purchase a used Jeep.

FDCPA Prohibits False Credit Reporting.

The FDCPA prohibits debt collectors from reporting any credit information which it knows is false or which should be known to be false. In this case, National Credit Systems reported that the account was less than seven years old, and that the balance owed on the account was $790,977 — for an apartment lease!

FCRA Prohibits Credit Reporting of Collection Accounts More than Seven Years Old.

Accounts which went into collections or were charged off more than seven years prior cannot be reported on a consumer’s credit report. Here, National Credit Systems reported this account to the credit bureaus even though it was nearly fifteen years old at the time.

Debt Collectors Use Credit Reporting to Coerce Payment for Old or Out of Statute Debts.

It is common to see collection agencies or other debt collectors report to the credit bureaus old debts which are too old to sue on, and too old to be reported to the credit bureaus. They do this by misreporting the date of first delinquency to the credit bureaus so these old account slip onto the credit reports. Many times it is only after the consumer is denied credit that he learns that this misreporting has taken place. That is what happened in this case. His first notice that National Credit Systems reported this old debt to the credit bureaus is when he was told he could not get financing on his Jeep. By then, the damage has been done.

Do You Have Old Accounts Reporting on Your Credit Reports?

If you have not looked at your credit reports recently, you should. You can go to www.annualcreditreport.com to obtain your free credit report from each of the three national credit reporting agencies as provided by recent changes to the FCRA. Review your reports to see if any information is incorrect, or if anyone is looking at your credit report without permission.

Contact an Arizona Lawyer for Assistance.

If your credit reports show any significant errors, contact a local Arizona lawyer. He or she can assist you in reviewing your credit report to determine if your rights under the FDCPA or FCRA have been violated. He can also show you how to dispute the incorrect information with the credit bureaus.

If you believe that your credit report contains any significant errors, feel free to call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 to set up a consultation.

Arizona Consumer Sues Gurstel, Staloch & Chargo for FDCPA Violations.

My office recently filed suit on behalf of an Arizona Consumer again the Minnesota law firm of Gurstel, Staloch & Chargo, P.A. (Gurstel also has offices in Tempe, Arizona) for violations of the Fair Debt Collection Practices Act (FDCPA). The lawsuit alleges that Gurstel continued to attempt to collect the debt from the consumer even though she had previously sent them written notice that she disputed the debt and notice that she refused to pay the debt.

Collectors Must Stop All Collection Efforts If Consumer Disputes Debt.

If the consumer disputes the debt in writing sent to the collector within thirty days after receiving the initial written communication from the collection agency, the collector must stop all collection activities until it provides “verification” of the debt to the consumer. Here, Gurstel received the dispute letters and finally stopped its collection efforts for over four months before it began calling her again demanding payment and threatening legal action. Gurstel had never provided verification. These calls violated the FDCPA.

Collectors Must Stop All Communications With the Consumer if the Consumer Sends Notice That She Refuses to Pay the Debt.

The FDCPA provides protection from continued collection harassment if the consumer sends written notice to the collection agency or collection law firm that she refuses to pay the debt. Upon receipt of such a notice, the agency or law firm must stop all communications with the consumer, including letters and phone calls. It does not, however, stop collection efforts such as filing a lawsuit or reporting the account to the credit bureaus.

In the case just filed, the consumer notified Gurstel that the alleged debt was the result of fraud and that she therefore refused to pay the debt. The subsequent phone calls violated the FDCPA.

Arizona Consumer Sues Portfolio Recovery Associates for Collection Harassment

My office recently filed suit on behalf of an Arizona consumer under the federal Fair Debt Collection Practices Act (FDCPA) against Portfolio Recovery Associates, LLC out of Norfolk, Virginia. Portfolio Recovery is one of many companies known as “Debt Buyers” or “Junk Debt Buyers.” These debt buying companies purchase blocks of debts which are charged off by the original creditors and sold for pennies on the dollar. The debt buyers then try to collect the debts sometimes using collection tactics which violate federal law.

For instance, the Arizona Consumer in this suit alleges that Portfolio Recovery repeatedly called her at work after being told that she cannot accept personal calls at work. They even left a message on one of her co-worker’s voice mail to “pass along” to the debtor.

The FDCPA prohibits debt collectors, including these “Debt Buyers” or “Junk Debt Buyers,” from calling an Arizona consumer at her place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such calls.

The FDCPA also forbids debt collectors from contacting third parties, including co-workers, friends, family, and neighbors, except to obtain location information. Calling and leaving a message with a co-worker or other third party is not done with the intent to obtain location information — its to done to harass the Arizona debtor and perhaps embarrassment them into paying a debt they either do not owe or one that they cannot afford to pay at this time.

I have filed many lawsuits over the past several years against collection agencies who participate in these types of illegal collection activities.

If you are an Arizona consumer who has been subjected to these types of collection harassment, please call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a free phone consultation.

Do You Need an Arizona Consumer Lawyer?

If you are an Arizona consumer who has been abused or harassed by a collection agency, or been sued on a delinquent credit card account or auto deficiency balance, then a consultation with an Arizona lawyer with experience in consumer protection law is important.

I am surprised by the number of Arizona consumers who tell me that the other lawyers they have consulted with advise them that even though the collection agency, car dealer, credit bureau, etc. has abused them, committed fraud, or otherwise violated their rights under the law, they are told by these same lawyers that nothing can really be done–that it costs too much to pursue the claim. Even when the consumer has been sued on an old credit card debt or an auto deficiency balance, these lawyers tell the consumers to try to settle the claim by offering to pay the debt buyer money even though the consumer has a complete statute of limitation defense to the lawsuit.

Should you consult an Arizona consumer lawyer? The answer is yes. Consult with a lawyer not only experienced in consumer law, but one who has practiced in the Arizona courts and is familiar with the local judges and local attorneys on the other side. Know what your rights are.

Experience counts! ARIZONA experience counts even more!!!

If you need a consultation regarding a consumer issue, please call Mesa, Arizona consumer attorney Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822.