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7th Circuit rules on debtor issues

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The 7th Circuit Court of Appeals handed down a decision today addressing issues that have frequently arisen under the Fair Debt Collection Practices Act, which have caused some splits at the Circuit level. In its opinion, the court combined two cases from Indiana and two from Illinois that dealt with similar issues.

The four cases in the opinion include Tammy A. Evory, et al. v. RJM Acquisitions Funding LLC, et al., 06-2130 to 2132, 06-2134, and 06-2157, and Kevin I. Captain v. ARS National Services, Inc., 06-3129 from the U.S. District Court, Southern District of Indiana, Indianapolis Division. Judge David Hamilton presided over both cases. The Illinois cases are Kelly and Karla Lauer v. Mason, Silver, Wenk & Mishkin, LLC, et al., 06-2271 and Philip Jackson, et al. v. National Action Financial Services Inc., et al., 06-3162, 06-3327-06-3439, and 06-3446.

In the opinion authored by Circuit Judge Richard Posner, the court determined there are three overlapping groups of issues to be addressed: the application of the Fair Debt Collection Practices Act, 15 U.S.C. 1692, to lawyers; the proper treatment under the act of settlement offers; and the role of Federal Rules of Civil Procedure12(c) in deciding claims of violations of section 1692e.

The 7th Circuit concluded that any written notice sent to the attorney of a consumer being contacted by a debt collector must contain the same information required by the act that would be sent to the consumer directly. It would be odd if a consumer with an attorney would be excused from receiving information to which he or she is entitled under the statute, wrote Judge Posner.

In the opinion, the judges decided that a representation by a debt collector that would not deceive a competent attorney, even if he or she is not a specialist in consumer debt law, would not be actionable under the act; however misleading or misrepresentation toward an attorney with information a lawyer may not be able to determine, such as the balance of the consumer's debt, would be actionable.

In terms of proper treatment under the act of settlement offers, the 7th Circuit wrote the settlement offers should include language such as "We are not obligated to renew this offer," so even unsophisticated consumers can understand that the debt collector may or may not present a similar offer again. Consumers often interpret offers such as "act now and receive 30 percent off ... if you pay by March 31st" or "we would like to offer you a unique opportunity to satisfy your outstanding debt" as one-time only offers and may not have any further opportunity to settle their debt for less than the full amount if they do not take the offer at that time. By using terms such as "not obligated," the debt collector can let the consumer know the company may or may not extend this offer again.

The 7th Circuit reversed and remanded Evory, Captain, and Lauer for further proceedings consistent with the opinion. In Captain, the 7th Circuit ruled that the District Court erred in dismissing the complaint for failure to state a claim because settlement-offer charges are lawful under the act and the challenge to the lawfulness of the $15 a day representation was made to a lawyer.

In Evory, which is a pure settlement-offer case with no communication with attorneys, the 7th Circuit ruled the dismissal of the complaint was an error.

In Lauer, the 7th Circuit ruled the District Court's dismissal of the plaintiff's complaint on grounds that the communications with a consumer's attorney are beyond the reach of the act was an error.

The court affirmed Jackson.

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  1. Indianapolis employers harassment among minorities AFRICAN Americans needs to be discussed the metro Indianapolis area is horrible when it comes to harassing African American employees especially in the local healthcare facilities. Racially profiling in the workplace is an major issue. Please make it better because I'm many civil rights leaders would come here and justify that Indiana is a state the WORKS only applies to Caucasian Americans especially in Hamilton county. Indiana targets African Americans in the workplace so when governor pence is trying to convince people to vote for him this would be awesome publicity for the Presidency Elections.

  2. Wishing Mary Willis only God's best, and superhuman strength, as she attempts to right a ship that too often strays far off course. May she never suffer this personal affect, as some do who attempt to change a broken system: https://www.youtube.com/watch?v=QojajMsd2nE

  3. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  4. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  5. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

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