1.3 Additional NCLC Resources
This treatise comprehensively covers a consumer’s rights when the consumer is sued in a collection action or where the consumer’s income or property is subject to seizure for an unsecured debt. However, this treatise cannot cover all areas of consumer law in detail. This treatise should be read in conjunction with other NCLC treatises, which cover certain types of collections or consumer rights in far greater detail.
A common collection lawsuit seeks a deficiency—that is, the remaining balance on secured credit after a creditor forecloses on the consumer’s home, repossesses the consumer’s car or manufactured home, or otherwise seizes and sells the consumer’s property pursuant to a security interest. The creditor sells the property and deducts the sale price and other fees from the amount due on the loan. The creditor (or a debt buyer) then sues for the remainder of the original balance due, called a deficiency.
Deficiency actions raise many unique defenses and counterclaims, which are examined in detail in two other NCLC treatises. Home Foreclosures2 focuses on foreclosure of real property, including a chapter on manufactured homes when such homes are treated as realty under state law.3Repossessions4 comprehensively covers repossessions of motor vehicles, manufactured homes (when treated as personalty), and household goods.
Chapter 10, infra, reviews general consumer defenses to a collection action brought by the federal government. Collection actions on student loans are so pervasive—and involve so many special issues—that they require a treatise of their own.5
This volume frequently refers to the federal Fair Debt Collection Practices Act, state debt collection law, and tort law in discussing consumer counterclaims and independent affirmative actions against the creditor or collection attorney. These subjects are examined in depth in NCLC’s Fair Debt Collection.6 Reference should also be made to NCLC’s Unfair and Deceptive Acts and Practices7 and Consumer Class Actions.8
One of the recurring themes in this treatise is the importance of the consumer’s credit report in a collection action. The credit report is a key investigative tool and can be particularly helpful in cases involving identity theft, mistaken identity, or disputes over the amount owed.
A review of the consumer’s credit report can also indicate if it has been reviewed by the creditor. If so, this information will reveal what the creditor should have known about the debt and can therefore help prove that a creditor was seeking payment on a debt it should have known was not owed (for example, because the debt was discharged in bankruptcy).
Moreover, consumers being sued upon a debt will invariably have negative information on their report. An important step for a consumer prevailing in the collection action will be to try to clean up that credit report. All these issues are examined in more detail in NCLC’s Fair Credit Reporting.9
Bankruptcy can be an important consumer strategy in dealing with a collection action or a court judgment. In addition, a complete defense on a debt is that the debt has been previously discharged in bankruptcy. While Chapter 12, infra, discusses the bankruptcy option, particularly in the context of a judgment for a creditor, see NCLC’s Consumer Bankruptcy Law and Practice for a complete analysis of all consumer bankruptcy issues.10
Collection actions often involve past-due electric, gas, or water utility charges. While this treatise will consider such collection actions, there are a number of other approaches to dealing with such charges—including federal and state benefits, utility arrearage forgiveness programs, and protections against shutoff—all of which are detailed in NCLC’s Access to Utility Service.11
The federal Fair Credit Billing Act and other Truth in Lending Act provisions have an impact on a collection action involving credit cards or other open-end credit. These issues are discussed in Chapters 4 and 5, infra, but are described in more detail in NCLC’s Truth in Lending.12
Chapter 12, infra, briefly touches on challenging the enforcement of arbitration awards obtained by creditors that used arbitration as an alternative to a court proceeding. Resisting and responding to such an arbitration proceeding is examined in far more detail in NCLC’s Consumer Arbitration Agreements.13
Other relevant NCLC publications include Surviving Debt14 and Instant Evidence.15Instant Evidence is a handy guide to the Federal Rules of Evidence and raising objections and motions in court. Many state evidence rules parallel the federal rules. Instant Evidence is designed to sit on the attorney’s table at trial—it is twenty-seven pages, spiral-bound to lay flat, and laminated to hold up to constant use. It can also be annotated with a dry-erase pen (included) and the annotations can easily be erased for the next trial.
Surviving Debt is an inexpensive guide for a lay audience (and paralegals and attorneys new to consumer law) on steps that families can take to deal with financial distress—from which debts to pay first, whether to refinance, and dealing with debt collectors to how to respond to threats of utility termination, foreclosure, repossession, or eviction. Some consumer attorneys hand out this book to clients, potential clients, or consumers that the attorney cannot represent.
2 National Consumer Law Center, Student Loan Law (2019), updated at www.nclc.org/library.
3 See also National Consumer Law Center, Mortgage Servicing and Loan Modifications (2019), updated at www.nclc.org/library (discussing steps to prevent foreclosure).
4 National Consumer Law Center, Repossessions (9th ed. 2017), updated at www.nclc.org/library.
5 National Consumer Law Center, Student Loan Law (6th ed. 2019), updated at www.nclc.org/library.
6 National Consumer Law Center, Fair Debt Collection (9th ed. 2018), updated at www.nclc.org/library.
7 National Consumer Law Center, Unfair and Deceptive Acts and Practices (9th ed. 2016), updated at www.nclc.org/library.
8 National Consumer Law Center, Consumer Class Actions (10th ed. 2020), updated at www.nclc.org/library.
9 National Consumer Law Center, Fair Credit Reporting (9th ed. 2017), updated at www.nclc.org/library.
10 National Consumer Law Center, Consumer Bankruptcy Law and Practice (12th ed. 2020), updated at www.nclc.org/library.
11 National Consumer Law Center, Access to Utility Service (6th ed. 2018), updated at www.nclc.org/library
12 National Consumer Law Center, Truth in Lending (10th ed. 2019), updated at www.nclc.org/library.
13 National Consumer Law Center, Consumer Arbitration Agreements (8th ed. 2020), updated at www.nclc.org/library.
14 National Consumer Law Center, Surviving Debt (12th ed. 2020), updated at www.nclc.org/library.
15 National Consumer Law Center, Instant Evidence (3d ed. 2019).