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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. The is an unsigned editorial masquerading as a news story. Almost everyone quoted was biased in favor of letting all illegal immigrants remain in the U.S. (Ignoring that Obama deported 3.5 million in 8 years). For some reason Obama enforcing part of the immigration laws was O.K. but Trump enforcing additional parts is terrible. I have listed to press conferences and explanations of the Homeland Security memos and I gather from them that less than 1 million will be targeted for deportation, the "dreamers" will be left alone and illegals arriving in the last two years -- especially those arriving very recently -- will be subject to deportation but after the criminals. This will not substantially affect the GDP negatively, especially as it will take place over a number of years. I personally think this is a rational approach to the illegal immigration problem. It may cause Congress to finally pass new immigration laws rationalizing the whole immigration situation.

  2. Mr. Straw, I hope you prevail in the fight. Please show us fellow American's that there is a way to fight the corrupted justice system and make them an example that you and others will not be treated unfairly. I hope you the best and good luck....

  3. @ President Snow - Nah, why try to fix something that ain't broken??? You do make an excellent point. I am sure some Mickey or Minnie Mouse will take Ruckers seat, I wonder how his retirement planning is coming along???

  4. Can someone please explain why Judge Barnes, Judge Mathias and Chief Judge Vaidik thought it was OK to re weigh the evidence blatantly knowing that by doing so was against the rules and went ahead and voted in favor of the father? I would love to ask them WHY??? I would also like to ask the three Supreme Justices why they thought it was OK too.

  5. How nice, on the day of my car accident on the way to work at the Indiana Supreme Court. Unlike the others, I did not steal any money or do ANYTHING unethical whatsoever. I am suing the Indiana Supreme Court and appealed the failure of the district court in SDIN to protect me. I am suing the federal judge because she failed to protect me and her abandonment of jurisdiction leaves her open to lawsuits because she stripped herself of immunity. I am a candidate for Indiana Supreme Court justice, and they imposed just enough sanction so that I am made ineligible. I am asking the 7th Circuit to remove all of them and appoint me as the new Chief Justice of Indiana. That's what they get for dishonoring my sacrifice and and violating the ADA in about 50 different ways.

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