Sign in to follow this  
graym

How does Debt Validation apply to co-signers?

Recommended Posts

My girlfriend has a loan which was co-signed by somebody else.  The debt collector sent out an initial notice to both parties (they live 400 miles apart) which contained the standard rights to dispute the debt within 30 days etc.  She timely sent in a letter of dispute, (certified # included in the letter and she has proof they signed for it within 30 days), and they have not yet responded to her request for validation.  The co-signer also sent in a dispute letter, but we believe the co-signers dispute might have been outside of the 30 day period.  Neither party has received any validation at all, and they have not attempted to contact her without validation, but they have called the co-signer without validation.

 

So the question here is, does one single debt validation request timely sent stop ALL collection of the debt, or is it specific for each co-signer as in they can contact the co-signer?  I'd assume they are violating the FDCPA and should not be calling either party if one party sent in a timely debt validation request but just want to make sure. 

Share this post


Link to post
Share on other sites

Sorry...specific to the individual...not both.

 

Do you have anything I can read that states this?  That just seems ridiculous to me.  If the personally who originally took out the loan is disputing it, they can completely ignore that and call the co-signer attempting to collect knowing their claim is fully disputed by the original borrower?

Share this post


Link to post
Share on other sites

Do you have a link to something I can read that addresses this?  I can't find anything on the matter. 

 

From the FDCPA:

 

(b ) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

 

It seems pretty clear to me that it states they must cease collection of the debt itself.  Calling a co-signer is an attempt to collect the debt, is it not?  It doesn't state that they must cease collection pursuant only to the person that disputed the debt, but must cease collection of the debt itself.  Since it's the exact same debt they are calling a co-signer about, how is that in compliance with the FDCPA?  That would be my analysis which very well might be wrong.  I just can't seem to find any information on the matter specific to co-signers which would support the conclusion you both are stating that this is specific to each individual, and not specific to the debt itself.

Share this post


Link to post
Share on other sites

I don't know of any case law that specifically covers this. My reasoning is that by cosigning, the cosignor agreed that if the debtor doesn't pay for whatever reason, you will.  That gives the creditor the right to hassle you independently.

Share this post


Link to post
Share on other sites

co-signers are jointly and severally liable for the debt.  Just because one of the debtors disputes a debt does not automatically mean the other debtor disputes it as well.  What happens if you did not dispute the debt?  Does that mean the creditor is not permitted to take payment from you even though the other party disputes it?  Of course not, that's silly.

Share this post


Link to post
Share on other sites

co-signers are jointly and severally liable for the debt.  Just because one of the debtors disputes a debt does not automatically mean the other debtor disputes it as well.  What happens if you did not dispute the debt?  Does that mean the creditor is not permitted to take payment from you even though the other party disputes it?  Of course not, that's silly.

 

How does this have anything to do with their obligations under the FDCPA debt validation clause?  it would appear your attempting to apply apples to oranges here.  You give a hypothetical situation wondering what would happen if she didn't dispute the debt which is completely irrelevant to the topic because she did dispute it.  The question presented was how does a timely dispute affect their ability to continue collecting the debt from a co-signer.  From everything it states in the FDCPA, they are required to cease collection of the debt.  Logically, that should apply to all co-signers since it's the same debt.  You are the one contradicting the FDCPA statutes by stating they can continue attempting to collect from a co-signer, I'm only asking for something that would support the statements you are making because I can't find anything at all that would even remotely support your stance on this issue. 

Share this post


Link to post
Share on other sites

I don't know of any case law that specifically covers this. My reasoning is that by cosigning, the cosignor agreed that if the debtor doesn't pay for whatever reason, you will.  That gives the creditor the right to hassle you independently.

 

That is the agreement made by co-signing however I disagree with the assertion that they have the right to hassle independently.   A co-signer is only providing a guarantee that they will pay in the event the original party does not.  In a case like this, the original party is disputing that any money is owed, which the debt collector can't prove.   If the debt collector can't even validate the debt to the original party, what right would they have to go after the co-signer?  It would seem, as you stated, just to be a strategy of harassment.   Going through a co-signer doesn't negate the fact they are attempting to collect the debt without validating the debt.

Share this post


Link to post
Share on other sites

That is the agreement made by co-signing however I disagree with the assertion that they have the right to hassle independently.   A co-signer is only providing a guarantee that they will pay in the event the original party does not.  In a case like this, the original party is disputing that any money is owed, which the debt collector can't prove.   If the debt collector can't even validate the debt to the original party, what right would they have to go after the co-signer?  It would seem, as you stated, just to be a strategy of harassment.   Going through a co-signer doesn't negate the fact they are attempting to collect the debt without validating the debt.

 

You can disagree all you want but until a court rules that collecting against borrower A prohibits collecting against co-signor B when DV was done by borrower A it is meaningless.  In this situation unless the co-signor is willing to file a FCDPA suit for violating his rights by continuing collection without validating and get a court to rule for him then you are just arguing to argue.  You asked if they CAN do it?  They ARE doing it.  Get a court to rule they can't.

 

I agree with the others.  You have two separate people that are jointly and separately liable for the debt.  BOTH must timely invoke their rights to use them.  If co-signor did not DV within 30 days they can keep calling him/her.  The same way they could choose to sue only one of the parties and that would be legal too.  The creditor can go after them separately therefore their rights are separate.

Share this post


Link to post
Share on other sites

And, since we can't find anything that specifically states they can't go after the cosigner if the original debtor disputes...my suggestion is...see if there is a www.naca.net lawyer in your area that will discuss this with you, and please, report back.

Share this post


Link to post
Share on other sites

How does this have anything to do with their obligations under the FDCPA debt validation clause?  it would appear your attempting to apply apples to oranges here.  You give a hypothetical situation wondering what would happen if she didn't dispute the debt which is completely irrelevant to the topic because she did dispute it.  The question presented was how does a timely dispute affect their ability to continue collecting the debt from a co-signer.  From everything it states in the FDCPA, they are required to cease collection of the debt.  Logically, that should apply to all co-signers since it's the same debt.  You are the one contradicting the FDCPA statutes by stating they can continue attempting to collect from a co-signer, I'm only asking for something that would support the statements you are making because I can't find anything at all that would even remotely support your stance on this issue. 

 

We'll just have to agree to disagree.  The original obligor sending a DV letter in no way gives you the same rights as the one who sent the DV.  

 

Also the FDCPA section you quoted is silent on the issue of multiple guarantors.  

Share this post


Link to post
Share on other sites

You can disagree all you want but until a court rules that collecting against borrower A prohibits collecting against co-signor B when DV was done by borrower A it is meaningless.  In this situation unless the co-signor is willing to file a FCDPA suit for violating his rights by continuing collection without validating and get a court to rule for him then you are just arguing to argue.  You asked if they CAN do it?  They ARE doing it.  Get a court to rule they can't.

 

I agree with the others.  You have two separate people that are jointly and separately liable for the debt.  BOTH must timely invoke their rights to use them.  If co-signor did not DV within 30 days they can keep calling him/her.  The same way they could choose to sue only one of the parties and that would be legal too.  The creditor can go after them separately therefore their rights are separate.

 

Well let's take it back a step.  If they have no paperwork to validate the debt, how can they even establish that there is a co-signer and that they aren't just harassing an innocent third party by claiming they are a co-signer?

Share this post


Link to post
Share on other sites

You didn't say they have no paperwork.  You said they didn't respond. 

 

Your question boils down to...if the primary doesn't ask for validation within 30 days, but the cosigner does, can they "assume the debt is valid" and hassle both.

 

The answer is...get a lawyer.  You MIGHT have a point, but, we know of no case law specifically covering this.

Share this post


Link to post
Share on other sites

And, since we can't find anything that specifically states they can't go after the cosigner if the original debtor disputes...my suggestion is...see if there is a www.naca.net lawyer in your area that will discuss this with you, and please, report back.

 

Agreed, and I think this is our next step.  I just thought that you all already knew of existing case law since your responses seemed confident.  First things first, I need to contact her co-signer to find out when he sent in his debt dispute letter.  I know he sent one, I just don't know if it was within 30 days.   Since they are calling, I assumed he didn't get it in within 30 days and was wondering if that gave them the right to call hence the thread, but it's also quite possible he did respond within 30 days and they are just breaking the law.

Share this post


Link to post
Share on other sites

You didn't say they have no paperwork.  You said they didn't respond. 

 

Your question boils down to...if the primary doesn't ask for validation within 30 days, but the cosigner does, can they "assume the debt is valid" and hassle both.

 

The answer is...get a lawyer.  You MIGHT have a point, but, we know of no case law specifically covering this.

 

I don't know if they have paperwork but as of yet they have not provided any.  Both parties requested validation.  The primary borrower definitely sent it in within 30 days, I am just unaware if the co-signer sent his in within 30 days as well or if it was sent in just after 30 days.  Again, I don't know the answer to that yet and it's quite possible both parties requested validation within 30 days.

 

The original loan was taken out in 2002.  The original loan defaulted in 2007 and went to a debt collector.  She worked out a payment plan with the debt collector and thought she had paid off the loan.  At the end of 2013 it would appear this debt was sold again to another debt collector, and they are demanding payment in full immediately.  So, thinking the loan was paid off already, she sent in a request for debt validation with this new debt collector.   Hence, why both parties are disputing this.  My assumption would be that the paperwork no longer exists considering the original loan was taken out 12 years ago, and defaulted over 7 years ago.  The debt is not being reported to the CRA's either, likely because the original default is over 7 years ago.

Share this post


Link to post
Share on other sites

I don't know if they have paperwork but as of yet they have not provided any. 

 

They don't have to provide ANY paperwork as part of debt validation even if they both requested it within the 30 days.  ALL they have to provide is the amount they claim is owed along with the name and address of the original creditor.  They only have to have actual paperwork if there is a judgment already or they intend to go to court and use it as evidence or the court requires it.  NOTHING in the FCDPA requires they send statements, contracts, account agreements etc. when DV is invoked.

Share this post


Link to post
Share on other sites

This could be new ground.

 

1692g(a)

 

"Within five days after the initial communication with a consumer in connection with the collection of any debt..."

 

Under the FDCPA, they could both be consumers.  That could imply that if both consumers are contacted, both consumers would need to receive the validation notice as was done in this situation.  Or, if contact with one consumer applies to the other consumer, the other consumer did not have to receive a notice in the first place.

 

Now, can one consumer invoke rights for another consumer? 

 

Let's say Consumer B, the cosigner, sends a C&D but does not inform Consumer A.  As as a result, Consumer A is sued because the debt collector applied that C&D to both consumers and no longer contacted Consumer A.  Now, Consumer A is upset because he didn't know about the C&D and now has to deal with a lawsuit when he would have been willing to settle the debt.  But, since he had not heard from the debt collector again (due to the C&D), he assumed they had given up and did not contact them about a settlement.

 

If one consumer can invoke rights for another consumer, then one of the consumers should be able to send a validation request which would apply to both consumers.  But if one cannot invoke rights for another party, then that other party has to take advantage of those rights on his own.  Until the courts rule one way or the other, we're just guessing and making assumptions.

Share this post


Link to post
Share on other sites

After speaking with her co-signer, he did send in his dispute letter within 30 days so both parties sent in timely dispute letters and neither party has received anything in return.  They also aren't just calling him, but they are robo-calling him daily leaving voicemails.  The original phone call in which they both spoke with the Debt Collector, the lady identified herself as an Attorney even though a search of her given name from the phone call doesn't list any registered Attorney's in Ohio where the call originated from.  Unfortunately, that phone call was not recorded on our side. I've attached the original notice which states at the top Attorney's At Law under their firm name.  I was under the impression that you can't list Attorney's At Law in a debt collection notice as it gives off the impression of a threat of legal action unless an Attorney has personally reviewed the records which doesn't apply to mass-mailings like the letter she received.

 

The letter also states National Collegiate Trust is the current creditor, but they are definitely not the original creditor and a quick Google search shows them as a large buyer of student loan debt.  Most of all, the fact that they are harassing her co-signer really annoys her considering she believes this debt has been paid in full.  Daily Robo-calls is quite an excessive form of harassment in my personal opinion. 

 

Time to just get the ducks in a row and bring this to an Attorney.  If we do file an FDCPA violation suit, it will be quite interesting to see how they defend it considering their closest listed office is 600 miles away.  I would assume venue is proper to file where the letter(s) and phone calls were received.

WeltmanRedacted0001.pdf

Share this post


Link to post
Share on other sites

After speaking with her co-signer, he did send in his dispute letter within 30 days so both parties sent in timely dispute letters and neither party has received anything in return.  They also aren't just calling him, but they are robo-calling him daily leaving voicemails.  The original phone call in which they both spoke with the Debt Collector, the lady identified herself as an Attorney even though a search of her given name from the phone call doesn't list any registered Attorney's in Ohio where the call originated from.  Unfortunately, that phone call was not recorded on our side. I've attached the original notice which states at the top Attorney's At Law under their firm name.  I was under the impression that you can't list Attorney's At Law in a debt collection notice as it gives off the impression of a threat of legal action unless an Attorney has personally reviewed the records which doesn't apply to mass-mailings like the letter she received.

 

The letter also states National Collegiate Trust is the current creditor, but they are definitely not the original creditor and a quick Google search shows them as a large buyer of student loan debt.  Most of all, the fact that they are harassing her co-signer really annoys her considering she believes this debt has been paid in full.  Daily Robo-calls is quite an excessive form of harassment in my personal opinion. 

 

Time to just get the ducks in a row and bring this to an Attorney.  If we do file an FDCPA violation suit, it will be quite interesting to see how they defend it considering their closest listed office is 600 miles away.  I would assume venue is proper to file where the letter(s) and phone calls were received.

 

If the law firm mailed the notice they can use their letterhead.  It is illegal for a JDB to use the attorneys name when the law firm is not involved.

 

Just head STRAIGHT to a consumer attorney.  There are a litany of them out there willing to sue National Collegiate Trust.  They are a JDB of out of statute private student loan debt.  They break FCDPA laws right and left and file bogus suits.  You have NO trouble finding someone to take this on contingency.

Share this post


Link to post
Share on other sites

If the law firm mailed the notice they can use their letterhead.  It is illegal for a JDB to use the attorneys name when the law firm is not involved.

 

Just head STRAIGHT to a consumer attorney.  There are a litany of them out there willing to sue National Collegiate Trust.  They are a JDB of out of statute private student loan debt.  They break FCDPA laws right and left and file bogus suits.  You have NO trouble finding someone to take this on contingency.

 

So it went from the original Creditor to one JDB which then later sold it to a 2nd JDB in National Collegiate Trust who is now outsourcing collection to a third JDB referencing the 2nd JDB as the current Creditor.  

Share this post


Link to post
Share on other sites

So it went from the original Creditor to one JDB which then later sold it to a 2nd JDB in National Collegiate Trust who is now outsourcing collection to a third JDB referencing the 2nd JDB as the current Creditor.  

 

No.  It went from the OC to JDB #1.  Who then sold to National Collegiate Trust:  JDB #2.  WWR is the law firm and also debt collectors that JDB#2 hired to collect on the account.  

Share this post


Link to post
Share on other sites

No.  It went from the OC to JDB #1.  Who then sold to National Collegiate Trust:  JDB #2.  WWR is the law firm and also debt collectors that JDB#2 hired to collect on the account.  

 

Isn't this the same thing as what i just said? 

Share this post


Link to post
Share on other sites

Isn't this the same thing as what i just said? 

 

No because the law firm is NOT a junk debt buyer.  Being a collector does not automatically make you a buyer but being a buyer DOES automatically make you a collector.  A debt collector and a debt buyer are two different things until the buyer duns the consumer then they are one and the same.

Share this post


Link to post
Share on other sites

So apparently they did send the validation request to her co-signer, and addressed it to both of them which is why she never received validation.  As he was out of town, he didn't get it until today when he returned home and checked his mail.  I can't see how that satisfies the FDCPA.  They had both parties addresses and sent out 2 notices of the debt to both addresses because they had contacted both parties.  Both parties sent back dispute letters listing each of their addresses.  Yet, their response to both parties is grouped up and only sent to one address?   It looks like an attempt to save at mailing costs, but I would have a hard time believing it is in compliance with the law as she hasn't received the requested validation and yet they've continued attempts to collect.

 

I'm guessing they are getting ready to sue, and assuming they do, it's definitely worth a counter-suit because as we established on the last page, there is no case law here on how this all applies to co-signers and it would be interesting to see a ruling on it.  She still fully disputes the debt, and at this point might as well just send a cease and desist and wait for a lawsuit.  It looks like they are fully focused on going after the co-signer though, they didn't even send her the paperwork and only sent it to the co-signer and they are currently only calling the co-signer.  Figures too, because the co-signer is not in the same position to defend the debt as the original borrower is.   

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this