University of Southern California

Dealing in Debt: The High-Stakes World of Debt Collection After FDCPA

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Note by Lauren Goldberg
From Volume 79, Number 3 (March, 2006)

Judi Norwood graduated from Arizona State University in the late 1990s. Due to the downturn in the economy, Judi was unable to find a job and consequently defaulted on the relatively small amount of money due on her MBNA credit card, about $2000. After pursuing Judi for months, the credit card company abandoned its efforts. Believing the bad situation was behind her, Judi moved to Florida, married a surveyor, had a son, and began her current job as a waitress. In the subsequent years, the small family saved $5000 to put toward a down payment on a home. Less than a week before the deal was set to close, Judi was targeted by an attorney at Asset Acceptance, a consumer small-debt-buying company, hoping to collect her old MBNA debt. Without presenting adequate information about the debt’s validity, the attorney threatened suit in small-claims court unless Judi immediately paid her debt, which Asset Acceptance claimed had risen to nearly $7000. This amount far exceeded the original debt and was equivalent to nearly twice the credit limit on the card. Because Judi was unaware that she was not legally obligated to pay an arguably time-barred debt, she felt cornered and settled the suit for significantly more money than she originally owed to MBNA.

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