Suing on a Debt That Has Already Been Paid
- Under the federal Fair Debt Collection Practices Act (FDCPA), a debt collector is not allowed to sue you after you repay a debt. However, you must send the debt collector a dispute letter within 30 days of receiving a notice of the unpaid debt. If you wait more than 30 days to dispute the debt, the debt collector can assume you accept responsibility and then the judge would have to decide the case, according to the Georgia Office of Consumer Protection. This assumes that the debt collector does not withdraw the case after finding a mistake with your debt.
- You can sue the debt collection company under the FDCPA for the greater of $1,000 or actual damages per violation if it pursues a lawsuit and does not verify the debt. Because you can sue the debt collector for each FDCPA violation, you can add illegal actions, such as harassing phone calls, to your case and potentially collect several thousands of dollars more than the company claims you owe.
- It's important to fully review the contract on the original debt. Debt collectors sometimes can add interest and fees while they waits for your payment. Some states expressly disallow debt collectors from adding any charges to a debt, no matter what the contract, but most states allow this as long as the contract with the original creditor includes interest and fees. However, debt collectors usually can add service fees related to some debt -- such as when a merchant charges the creditor for a dishonored check or legal fees -- even in states that refuse to let debt collectors add charges to an account.
- When you send your dispute lender to the debt collector, clearly state which charges on the account you dispute and include as much supporting information as possible, such as canceled checks. Also, state that you in no way claim responsibility for the debt. Unless you feel comfortable adhering to FDCPA provisions and possibly filing a lawsuit or defending yourself against one, you should also hire a lawyer.
