All too often I have potential clients come to me with complaints that they have been treated unfairly
by a debt collector. I listen to situations where the
collector used profane language or spoke in a harassing voice, how
a collector threatened to file suit or send the debtor to jail for
failure to make payment. These collection tactics all clearly
fall within the boundaries of conduct directly in violation of the
Fair Debt Collection Practices Act (“FDCPA”). One major detail can
derail the entire case. The FDCPA is the statute
enacted to protect consumers from
unfair and abusive treatment from debt collectors in their
efforts to collect consumer debts and not all debts fall under this
category.
Many consumers do not understand what a consumer debt is and
that all debts are not covered under the Act. In today’s blog
I explain the definition of what a consumer debt is and is
not. The statute specifically states that to succeed on a
claim under the FDCPA, a consumer must present evidence that the
debt being collect what a consumer debt
or a debt “primarily for personal, family, or household
purposes.” Some examples of these types of debt include
delinquent credit card accounts, auto loans, medical bill,
utility bills, your mortgage or student loans. Another way to
determine whether a debt is considered a consumer debt is whether
at the time you made the purchase whether it was for personal
use.
The FDCPA does not cover debts that are non-consumer or related
to your business. Some examples of debt that are
classification as business debt and not covered under the FDCPA
are:
- Taxes. Taxes, including property, state
and federal income taxes are not consumer debts. While this
may seem contrary, taxes are not considered a consumer debt because
no one voluntarily “incurs” tax debt for personal, family, or
household purposes. - Domestic support obligations. Most
courts consider Child Support or Alimony payments as non-consumer
debt. - Personal guarantees of business debts.
Personal guarantees of business debts are not consumer debts.
They were incurred to be utilized for a business, and thus they
remain business debts. - Legal fees. If your legal fees are
incurred for family or household purposes, they will be considered
consumer debt, however if they are incurred in connection with a
business dispute then they will be considered non-consumer or
business debt and not covered under the FDCPA. - Accident liabilities. These are not
consumer debts and are considered business debts. Subrogation
claims from an insurance company are similarly not included as
consumer debts. Though the vehicle may be for personal use
there was no voluntary transaction that led to the debt. i.e.
the accident with the vehicle was not a voluntary transaction, it
was an accident. - Parking tickets. Parking tickets are not
consumer debts.
If you have any questions regarding whether a collector is
calling to collect a debt that may or may not be a consumer debt
contact SmithMarco P.C. for a free
case review.