Federal vs. state

While the Fair Debt Collection Practice Act (FDCPA) is a federal law that protects consumers against the illegal practices of creditors, many states have adopted their own laws. We asked Steve Recordon, an attorney from San Diego, California whose firm represents individuals who have been sued or harassed by debt buyers, to explain when cases are filed in federal vs. state court. Here’s what he told us:

It depends on the type of case, but the answer to that question has an interesting twist to it. A telephone harassment suit is going to be filed only in federal court. Why? Well, if you tried to file it in state court, the debt collector's attorneys are going to remove it to federal court anyway, so you might as well start there. If it's already resulted in a lawsuit, the lawsuit is going to be filed in state court. What an attorney will do is file an answer and a cross-complaint in that case alleging violations of the federal or state statute.

If a lawsuit is filed in state court, technically, you could just file a cross-complaint in state court and then walk over to federal court and file just the FDCPA violation there. So, you have a couple of different strategic moves and attorneys approach it differently.

State debt collection laws

Recordon says that most states have enacted laws that are similar to the federal FDCPA. They also have a private attorney general provision so that the debt collector, if he violates the law, has to pay the attorneys’ fees of the debtor. In California, the statute is called the Rosenthal Act; it's very similar to the Fair Debt Collection Practice Act, but on the state level.

Here’s how it comes into play, according to Recordon, “Let's say a debt collector files a lawsuit for a credit card in state court. In this situation, the Rosenthal Act will come into play. So does the federal statute, but normally, what will happen with the federal statute, if that's violated, is that it will be prosecuted in the federal courts. So, it gives both the state and federal courts jurisdiction.”

If you’ve been sued or harassed by a debt buyer / collection agency, contact an attorney whose practice focuses in this area of the law to discuss your situation. Consultations are free, without obligation and strictly confidential. To contact an experienced attorney, please click here. We may be able to help.