The long recession has forced even debt collectors to resort to innovative but abusive collection efforts. Threatening debtors with imprisonment for failing to pay debt seems to be a common debt collector strategy in some states. Some states apparently have not repealed laws which provide for debtor prisons. Fortunately, in California, there are no debtor prisons, unless of course, a judgment has been issued and debtor fails to show up for a debtor examination. In that situation, a bench warrant of arrest will issue against debtor for contempt of a court order toappear. So, even in California, a debtor may end up in jail under certain circumstances. Does bankruptcy dissolve a warrant of arrest in this example? YES, strange as it may seem, the filing of a bankruptcy causes the withdrawal of the warrant of arrest.
Recently, the U.S. District Court froze all the assets of a California based debt collector called Rumson, Bolling & Associates which operated out of Van Nuys. The Federal Trade Commission alleges that that the debt collector engaged in unlawful debt collection practices and ripped off its small business clients. The court also appointed a permanent receiver to run the business while the FTC moves forward with its case against the three companies and six persons behind the operation. The debt collector’s website said “Oftentimes business will give up collecting on a past due account due to difficult debtors or time constraints. Rumson, Bolling & Associates believes that there needs to be a way for businesses to have a chance collecting on their past due accounts.”
What kind of abusive collection efforts did this debt collector engage in exactly? According to the FTC, the defendants’ collection methods included : 1. Threatening debtors with physical harm and death; 2. Threatening debtors’ pets with physical harm and death; 3.Threatening to desecrate the bodies of deceased relatives; 4. Use of obscene and profane language; 5. Improperly revealed consumers’ debts to third parties such as employers, co-workers, neighbors, and family members; 6. Falsely threatened debtors with lawsuits, arrest, seizure of their assets, or wage garnishment; 7. Falsely claimed that debtors would be liable for legal fees incurred in the collection of the debt.
Let’s re-enact a typical collection call from Rumson and Bolling:
RB: Hello, wake up you deadbeat! This is Mr. Ivan from Rumson & Bolling collecting the $500 that you owe your dentist.
Debtor: Rumson & who?
RB: You dare question who I am, you insect! If you do not send me a postal money order or a certified check for $500 plus $5,000 of legal fees incurred for collecting your debt before the end of business today, I am going to kill you dead.
Debtor: Sir Ivan, did you just threaten to kill me?
RB: Not only will I kill you dead, I will feed your cat to a pit-bull on steroids.
Debtor: Sir, did you just threaten to kill Mr. Bigsley, my Siamese cat?
RB: Not only will I kill you and your cat dead, I know where your father is buried. I am going to dig up his corpse, piss on his coffin and sell his skeleton to UCLA med school!
Debtor: But Mr. Ivan, I just lost my job. Will you take my Rolex as payment?
RB: I will take your Rolex as a 10% down-payment after I shove it down your throat after I tell your wife, your mother, your grandmother, your next door neighbor and your doctor that you are a no good @#$% deadbeat who owes your dentist $5,500!
Named as defendants in the FTC’s complaint are Forensic Case Management Services, Inc, doing business as Rumson, Bolling & Associates, FCMS, Inc. Commercial Recovery Solutions, Inc. and Commercial Investigations, Inc, Specialized Recovery, Inc. dba Joseph, Steven & Associates and Specialized Debt Recovery, Commercial Receivables Acquisition, Inc. dba Commercial Recovery Authority, Inc., etc.
Bankruptcy will protect you from these predatory debt collectors while allowing you to keep most if not all of your assets
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