Collection Actions: 11.7.8 FCRA Violations for Reporting Obsolete Information
The FCRA has two provisions restricting obsolete information.
The FCRA has two provisions restricting obsolete information.
The FCRA requires tenant screening companies “to clearly and accurately disclose all information in the consumer’s file” upon request, including the “sources of [this] information.”685 Following the Supreme Court’s decision in TransUnion L.L.C. v. Ramirez,686 however, a denial of information alone may not be sufficient for standing.
For most FCRA requirements, a tenant screening company that negligently fails to comply with the requirement is liable to the consumer for actual damages sustained because of the failure, as well as court costs and reasonable attorney fees in the case of a successful action.688 For willful violations, a consumer is entitled to actual damages or statutory damages ranging from $100 to $1000 and such punitive damages as the court may allow—plus court costs and reasonable attorney fees.
In evaluating whether to bring an FCRA claim, it is important to consider the limits on FCRA claim and if claims under alternative laws would be superior—or should be pleaded in the same case. In addition, consider the following factors:
This chapter examines laws that protect debtors’ essential income—including wages, benefits, and retirement or pension payments—from creditors. It includes a detailed analysis of the protections afforded these exempt sources of income when they are deposited into bank accounts, as well as protections for bank accounts in general.
State exemptions seek to balance the need for security in old age against the possible abuse of retirement accounts to shelter unreasonable amounts from creditors. Some exemption statutes protect retirement funds, or particular types of retirement funds, so far as they are “reasonably necessary” for the retiree’s needs,555 while others set a dollar cap on the exemption.556
States generally make postjudgment discovery proceedings available to creditors to force judgment debtors to answer questions about their assets. The creditor may have the right to issue interrogatories to the debtor, summon the debtor to a debtor’s examination to answer questions in person, and issue a subpoena duces tecum requiring the debtor to produce assets or records.
In addition to the criteria set forth above, the Code offers some guidance as to what the plan may do but establishes few limitations.
When legal, evidence of collection abuse and of the client’s credibility might be obtained by the consumer recording a collection telephone call. This option is only available in certain states, because in other states recording a phone call without consent is a criminal offense. There are also legal ethical considerations if an attorney advises the client to record a telephone call.
In essence, a voluntary1 bankruptcy case is a legal proceeding, brought by a debtor, that seeks relief specifically provided for by a federal statute, the Bankruptcy Code.2 The bankruptcy case must be brought in the United States District Court, which has jurisdiction over all bankruptcy cases, but bankruptcy cases are normally automatically referred to the bankruptcy court for the district, a unit of the district court.3 Therefore, the actual bankruptcy petit
For individuals, there are two types of relief that are usually used. The first is liquidation under chapter 7 of the Code. In a liquidation case, sometimes referred to as a straight bankruptcy, any substantial nonexempt4 assets of the debtor are converted to cash and distributed to creditors according to certain statutory rules. The individual debtor ordinarily receives a discharge, which absolves them from any responsibility to pay most debts and also provides various other protections.5
The purposes of bankruptcy are usually described as twofold: (1) a fresh start for the debtor and (2) equity among creditors. In most cases involving consumer debtors, the first is by far the more significant, because there are typically few assets to be distributed, equitably or otherwise, to the creditors involved.
Under the 1984 amendments to the Bankruptcy Reform Act, the bankruptcy court is a “unit” of the federal district court in each judicial district.14 Its powers, however, are greatly diminished compared to those that were originally contemplated by the drafters of the 1978 Act.
There are several possible avenues for appeals from the bankruptcy court. The path to be taken depends upon the wishes of the parties, the practice adopted by the federal district court and judicial circuit where the bankruptcy court is located and, in some cases, the consent of an appellate court.
Another provision of the 2005 Act affects the automatic stay for two subcategories of repeat filers, but only as to the enforcement of real property liens. Section 362(b)(21) of the Code renders the automatic stay inapplicable to enforcement of a lien on, or a security interest in, real property when the debtor is ineligible for relief under section 109(g) of the Code or has filed the case in violation of a prior court order limiting new bankruptcy case filings.
The acts prohibited by the automatic stay are set out in a series of overlapping statutory provisions.71 This section discusses those provisions, which are subject to a variety of exceptions.
The stay bars “the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case . . .
In many a routine chapter 7 bankruptcy, the only event of any real importance between filing and discharge is the meeting of creditors, sometimes colloquially called the “first meeting of creditors” or the “section 341(a) meeting” in honor of the relevant statutory provision. While it may pose occasional problems, this proceeding is usually routine and uneventful.
Once the time for objecting to a discharge has passed in a chapter 7 case and proof of the debtor’s completion of a financial education course has been filed, with a few limited exceptions, the debtor is entitled to a discharge.326
Another issue that unfortunately often arises concerns the remedies available against government entities for violations of the stay.
One further issue is the best way to go forward procedurally in seeking a remedy for a violation of the stay. Although several courts have held that relief under section 362(k) is available by motion,374 it may be preferable to proceed by complaint pursuant to the adversary proceeding rules, especially if injunctive relief or a contempt remedy is sought.375 This procedure will eliminate any potential issues about the due process rights of the defending party.
While the scope of the stay is broad and the sanctions to enforce it are powerful, the duration of its protections may be short-lived. A common creditor response to the bankruptcy petition is to file a proceeding seeking relief from the automatic stay. The court may grant relief, upon motion of a party, terminating, annulling,380 modifying, or conditioning the stay. Only the bankruptcy court has the power to grant relief from the automatic stay.381
The Code sets out strict time limits for stay litigation involving stays of acts against property.
Normally, any proceeding must include as parties all persons who will be ordered by the court to do something or whose interests will be seriously affected if the action is successful. Thus, both Federal Rule of Civil Procedure 19 and Federal Rule of Bankruptcy Procedure 7019 generally provide that such indispensable parties must be joined. While these rules are not specifically incorporated in Federal Rule of Bankruptcy Procedure 9014, that rule does provide that notice shall be given to the party against whom relief is sought.405