Debt collectors often indicate that a Las Vegas bankruptcy is in on the horizon. The letters, the phone calls, and other tactics are an enormous hassle for debtors, and state and federal governments have all passed laws designed to curb the types of things that debt collectors can do when trying to collect on debts. Most of the time they obey these laws; other times they don’t. One tactic federal law expressly forbids them from using is claiming that debtors could go to jail for not paying on a private debt (debts to the government are a different matter). Recently, the New York Times has discovered that debt collectors are finding a way around this requirement by joining forces with local district attorneys of all people. Here is what you need to know and what to do if this happens to you:
1. Any letters referring to a bounced check that display a district attorney’s seal are not from the D.A.’s office but are instead from a debt collector. Two debt collection agencies to watch out for in particular are CorrectiveSolutions and BounceBack, of California and Missouri, respectively.
2. The D.A. benefits because the debt collector slaps on a high fee for charging debtors to attend financial responsibility courses, though it’s unclear how that money goes to the D.A.’s office.
3. Any money sent by debtors to merchants to whom they issued a bad check is sent straight to the debt collection agencies and are never reviewed by D.A.’s offices to see if the debtors committed any crime, which they mostly don’t.
4. Generally, proving that someone deliberately defrauded a merchant by bouncing a check is difficult for prosecutors to do, so if you receive one of these letters you should know that there is no evidence that you have committed a crime.
5. If you can pay on the amount on the bounced check to the merchant, do so. Honest mistakes happen.
6. However, the fee for attending the financial responsibility course is challengeable, so contact an attorney to understand your rights.
The people interviewed by the Times appeared to have just made honest mistakes, such as trying to pay a check on an account that had either been frozen or quickly depleted due to a divorce. If you made an honest mistake as they did, don’t pay for courses that teach you how not to be a criminal and instead talk to a Las Vegas bankruptcy lawyer to handle the situation and any other debt problems you might have.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-803-9251 to set up your free consultation.