Tinsley v. Integrity Financial Partners, Inc.

In Tinsley v. Integrity Financial Partners, Inc., decided on February 11, 2011, the U.S. Court of Appeals for the Seventh Circuit ruled that the Fair Debt Collection Practices Act (FDCPA) does not bar a debt collector from continuing to contact the debtor’s attorney for payment after the collector receives notice from the debtor to stop communications. Filing bankruptcy may be the only solution to get a creditor from collection activities. In bankruptcy, a debtor gets the benefit of the automatic stay.

In Tinsley v. Integrity Financial Partners, Inc., the Seventh Circuit rejected the debtor’s claim that the debt collector violated the FDCPA by calling his attorney to ask for payment after he exercised his FDCPA right to cease communications from the collector.

The FDCPA says, with some exceptions, a debt collector must stop communications with a debtor if the debtor notified the collector in writing the consumer refuses to pay a debt or wants the debt collector to stop further communications with the debtor.

In the case, the debtor argued the collector’s communication to his attorney should be treated as a communication with the debtor because his attorney was the debtor’s agent. The Seventh Circuit said the debtor’s reading of the statute would cause “serious problems for the structure and operation of” other FDCPA provisions. Replacing the word “lawyer” with “consumer,” either because a lawyer is a “consumer” or a communication to a lawyer is an indirect communication to a debtor, would make it illegal for a debt collector to communicate either with the debtor or a lawyer once a collector knew a debtor had a lawyer. A debt collector who knows a debtor is represented by an attorney would communicate only with the attorney.

The court said the debtor’s reading of the statute would deny meaning to the FDCPA section on communications with third parties that lets a debt collector to communicate with a debtor’s attorney. Also, the debtor’s interpretation was not supported by the FDCPA’s definition of “consumer,” which does not include a debtor’s lawyer.

Since according to the case, the debtor was out of luck in stopping collections activities, filing bankruptcy may be the solution to help a debtor negotiate with creditors. A creditor talking to a bankruptcy attorney may be more likely to settle a debt knowing the debtor may file bankruptcy, leaving the creditor with less for every dollar claimed.