Is it still 30 days of Debt Collection?
Sigh.
I'm going to finish this if it kills me.
In Wisconsin, we have the Wisconsin Consumer Act, which applies to almost every debt a person could owe (almost every debt. Almost. That's a big qualifier, even though it doesn't seem like it). One big protection the Wisconsin Consumer Act provides is that it prohibits creditors from imposing attorney's fees on almost every debt it covers. (Almost! every debt.)
Which means that in Wisconsin, at least, you're generally protected from claims that you have to pay the creditors' attorney's fees if you lose your case; so when you default on your credit card and a debt collector comes calling and you make them sue you, you can rest assured that you will not have to pay, if you lose, the debt collector's attorney's fees.
Usually.
(Wow. That's three big qualifiers there: almost every debt, generally protected, usually not have to pay. See why lawyers stay in business?)
There are, like all laws, exceptions to this rule. Mortgages are one exception -- your mortgage lender (in some cases) can tack on attorney's fees.
Another exception comes from the Fair Debt Collection Practices Act (FDCPA), and provides a back door for debt collectors to try to get their attorney's fees back from you if you sue them and lose. The FDCPA giveth, and the FDCPA taketh away, in some cases, as can be seen by this rule:
On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney's fees reasonable in relation to the work expended and costs.
That's what the law says. So if you, the debtor, sue a debt collector "in bad faith" and to harass the debt collector, they can turn the tables on you and get their attorney's fees, from you.
The law sets a pretty high bar for what a debt collector would have to prove. If your case is "minimally colorable," in the words of one court, you won't owe them fees -- so you've got to have some kind of claim, even if it's not a very good one. And if you win on some, but not all, of your claims, you probably won't owe fees either, at least in the Seventh Circuit Court of Appeals, which ruled in 2003 that an entire action had to be brought in bad faith and to harass, not just a part of it.
In that case, Horkey v. J.V.D.B. & Assoc., Inc., the debtor sued on four different claims all stemming from a debt collector calling her at work. (I mentioned Horkey back on day 20, here.) She won on 3 of the 4 claims, but the court denied her a ruling on the 4th. J.V.D.B. then asked for attorney's fees, claiming that the action was brought in bad faith.
The Seventh Circuit Court of Appeals slapped that contention down, affirming the district court and noting:
In fact, at this juncture any bad-faith accusations would more appropriately be directed at J.V.B.D. for appealing the denial of its attorney's fees, but that issue is not before us.
It would have been neat for a court to turn a motion for fees on its head, and award fees based on someone seeking an award of fees, but we can always go down that rabbit hole later on.
Debt collectors who want to get their fees back have to prove that the debtor acted in bad faith and to harass the debt collector, and winning the case isn't enough to prove that, in most instances. A complete lack of evidence can be proof that a debtor acted in bad faith and to harass, said the Court in Jacobson v. Healthcare Financial Services, Inc., E.D.N.Y.2006, 434 F.Supp.2d 133, so a father whose son's debt appeared on his credit report would have been well-advised to drop that suit before filing for summary judgment.
Keep in mind, though, that simply weak cases aren't enough, either: The law should, and does, encourage people to press new claims or argue for new interpretations, as long as they do so in good faith, so merely presenting a weak, or novel, idea, generally doesn't mean you'll pay the other side's fees if you lose. So you could, say, sue a library for violating the FDCPA, and even if you lose (because you were wrong from the start?) you won't automatically pay the fees for those high-powered library lawyers.
That library case is kind of a fascinating one in its own right, and deserves a closer look.
The case of Riebe v. Juergensmeyer & Assocs, an Illinois federal case under the FDCPA, arose because someone's daughter didn't return a library book and the library wanted to get paid for its book.
Now, ordinarily, things might end with that, unless it's me you're dealing with, or unless you're the library's lawyers, who for some reason thought it would be a good idea to threaten the library patron -- a minor-- with arrest under the Illinois criminal laws. To collect $29.95, the lawyers threatened criminal liability.
That wasn't the end of it, either, because the minor's parents got their own lawyer, who threatened to sue for $31,000 if the case wasn't settled out of court.
The case wasn't settled, and the minor's parents did sue, and the entire case came down to the question of whether a fine imposed for borrowing a library book and not returning it was a "debt" under the Fair Debt Collection Practices Act.
No, the court decided, it's not a debt, because a "debt" means that there was a consumer transaction and borrowing a library book isn't a consumer transaction, it's a public privilege. Because there was no underlying transaction, the Court reasoned, there was no "debt" as far as the FDCPA was concerned.
So the plaintiffs lose, and the defendants, pressing their luck, ask for an award of attorney's fees -- claiming that it was bad faith to write strongly worded letters and demand $31,000 when everyone involved knew it was a "fine" and not a "debt," but the Court denied the request for fees, noting that there was at least a novel argument to be made:
[D]espite Defendants' characterization of the lawsuit as absurd, the facts of this case are sufficiently unique to bring an action (albeit unsuccessful) under the statute, especially in light of the recent debate of what constitutes a "debt" under the FDCPA.
The bottom line? If you're going to sue a debt collector, make sure you have a good reason for doing so.
And return your library books on time.
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