Debt Collection

Question 1

If a creditor repossesses collateral that was purchased for $4,000 or less, what is the result? What are the exceptions?

Answer 1

The debtor is not liable for any remaining debt owed.

(1) Debtor wrongfully damages collateral, or
(2) Debtor refuses proper repossession demand.

Question 2

When is repayment unenforceable?

Answer 2

(1) Physical harm to the debtor’s person or property is threatened,
(2) Harm to the debtor’s reputation is threatened, or
(3) Excessive interest (exceeding 45%), plus a creditor with a reputation for using or threatening violence.

Question 3

What federal law governs debt collection?

Answer 3

The Fair Debt Collection Practices Act (“FDCPA”).

Question 4

To whom does FDCPA not apply?

Answer 4

Creditors themselves.

Question 5

May a debt collector communicate directly with a debtor knowing the debtor is represented by an attorney?

Answer 5

No, unless the attorney fails to respond to a communication within a reasonable time.

Question 6

Within what timeframe is a debt collector not allowed to contact a debtor?

Answer 6

9:00 p.m. - 8:00 a.m.

Question 7

May a debt collector contact a debtor’s place of employment?

Answer 7

No, if he knows the employer prohibits such communication. (One chance to call.)

Question 8

What are the parameters under which a debt collector may not harass or abuse a debtor?

Answer 8

A debt collector may not:

(1) Use or threaten violence,
(2) Harm or threaten a person’s reputation,
(3) Use profane language,
(4) Publish a list of debtors to refuse to pay,
(5) Call a person with an intent to annoy, harass, or abuse, or
(6) Call a person without meaningfully disclosing their identity.

Question 9

What are the parameters under which a debt collector ay not use false, deceptive, or misleading statements or actions?

Answer 9

A debt collector may not:

(1) Suggest an affiliation with federal or state government,
(2) False state the amount or status of a debt,
(3) Suggest nonpayment will result in arrest, imprisonment, garnishment, or seizure of property,
(4) Suggest the debtor committed a crime,
(5) Threaten to communicate false credit information, or
(6) Fail to disclose that a communication is from a debt collector.

Question 10

When must a debt collector terminate communication with the debtor? What are the exceptions?

Answer 10

Upon a written refusal to pay the debt or a written request to end communication.

Exceptions: To advise that further efforts to collect the debt are being terminated or that certain remedies may be invoked.

Question 11

A debt collector may contact third parties in what scenario and under what parameters?

Answer 11

To locate the debtor, and the debt collector must:

(1) ID himself without indicating he is a debt collector,
(2) State he is seeking location information, and
(3) Not state the person owes a debt.

The debt collector may not contact the person more than once, nor may he send a postcard.

Question 12

Where is proper venue for legal action arising out of a debt owed?

Answer 12

(1) Where the debtor lives,
(2) Where the debtor signed the contract, or
(3) Where the real property is located (if applicable).

Question 13

When are garnishment orders available?

Answer 13

Only after the court has issued a judgment against the debtor.

Question 14

Garnishment of wages not re: the support of a person may not exceed:

Answer 14

The lesser of:

(1) 25% of the debtor’s disposable earnings, or
(2) The amount by which the debtor’s disposable earnings exceed 30x the federal minimum wage.

Question 15

Garnishment of wages re: support of a person may not exceed:

Answer 15

50% of debtor’s disposable earnings if the debtor is supporting a spouse or dependent child, or

60% of the debtor’s disposable earnings if the debtor is not supporting a spouse or dependent child.

Question 16

What is the fee an employer may take for garnishing an employee’s paycheck?

Answer 16

The greater of $12 or 3% of the amount to be deducted.

Question 17

What are the remedies for discharge due to a garnishment order?

Answer 17

(1) Up to 6 weeks of lost wages,
(2) An order requiring the employee’s reinstatement, and
(3) Fees and attorneys’ fees for the legal action.

Question 18

Attachment before judgment is available only under what circumstances?

Answer 18

If at least one of the defendants:

(1) Is a nonresident of Indiana,
(2) Has left Indiana with intent to defraud,
(3) Is concealed so that a summons cannot be served,
(4) Is removing or about to remove property outside of Indiana, or
(5) Has sold or disposed of property with fraudulent intent (or is about to do so).

Question 19

What is a proceedings supplemental?

Answer 19

When a defendant remains unwilling or unable to pay the amount due, the plaintiff may bring an action to further involve the court.

Question 20

Where is a judgment lien on real property automatic?

Answer 20

In the county of the issuing court. Other counties must be notified by delivering a certified copy of the judgment to the clerk of court of the county where the real property is located.

Question 21

What may be excluded from bankruptcy proceedings?

Answer 21

A debtor’s equity interest in a residence, up to $19,300 in value, and

(1) Other real property or tangible personal property up to $10,250,
(2) Deposit accounts and cash up to $400 in value,
(3) Any property held has a tenant by the entireties,
(4) Health aids,
(5) Interests in retirement plans or public pensions,
(6) Interests in HSAs,
(7) Deposits to tax deductible education savings accounts made at least one year before the bankruptcy filing,
(8) Workers’ comp benefits,
(9) Unemployment compensation,
(10) Rights to tax refunds, and
(11) Veteran disability benefits.