If you owe money to creditors or are in financial trouble, you may be tempted to use your credit cards to make payments to the individual, instead of completing a debt collection program. Unfortunately, doing so without a judgment creditor-debtor service is not only unproductive but illegal.
As stated in The Consumer Debt Collection Practices Act (CDA), a judgment debtor service is defined as an agreement between a creditor and a debt collection attorney or the attorney’s firm that the debt will be collected by taking a specific action. In most cases, this means taking a debtor to court to obtain an order for payment of funds owed.
The primary duty of the debt collection attorney is to:
- The purpose of the “creditor consent agreement” is to avoid paying the funds and therefore to set up a new judgment to protect the credit of the company that issued the credit. Another reason the consent may be used is to prevent the debtor from paying the funds to avoid paying a judgment. Again, if a fraudulent conveyance occurs, the CDA protects the recipient of the money from finding out about the fraudulent conveyance and from setting up a new judgment. In some cases, the CDA also protects the creditors from learning that they have won a judgment against a debtor in a civil suit.
- One reason that the CDA was enacted was to provide protection to the debtor from: (a) attempts to collect funds by means of deception; (b) threats of violence or other litigation; (c) attempt to intimidate debtors into paying a judgment; and (d) attempts to commit deceptive conduct related to financial records. As previously stated, the new law protects the debtor from these types of activities. In addition, the fee collection lawyer who obtains the debtor’s financial records will need to disclose this information to any subsequent creditors and law firms that obtain the records.
- Collection lawyers will commonly seek judgments for fraudulently using consumer credit cards in order to collect outstanding debts. Such judgments generally provide the collector an automatic stay of the payment. Such automatic stays generally bar the debtor from recovering the debt until either (a) the court issues an order granting the creditor’s motion for nonsuit or (b) a substantial amount of time has passed. In other words, if the judgment has become irrevocable the collection lawyers may not pursue collection efforts.
Collection lawyers can be very useful when a consumer believes that he or she is the victim of fraud or false advertising. New York law firms can be extremely helpful in protecting the rights of their clients. Learn how to collect on a judgment in New York. By retaining a collection lawyer early on, the customer has a good opportunity to get out from under a mountain of debt. If the customer is unable to resolve the problem through negotiation, then the law firms may be able to successfully recover legal fees and other liabilities associated with the case.