Cavalry Portfolio Services, LLC is the defendant in a proposed class action in which a New York resident claims the company violated state and federal law by omitting material information from a debt collection letter.
According to the complaint, the letter “strongly suggests” to the plaintiff that she will be sued if she does not pay the purported obligation, warning that her account may be referred to a “collection law firm” and explaining the possible consequences of a judgment against her. Considering the defendant’s reference to a judgment, the case claims the letter should have also informed the plaintiff that some types of income cannot be collected through litigation, as specified under state law:
“If a creditor or debt collector receives a money judgment against you in court, state and federal laws may prevent the following types of income from being taken to pay the debt:
1. Supplemental social security income, (SSI);
2. Social Security;
3. Public assistance (welfare);
4. Spousal support, maintenance (alimony) or child support;
5. Unemployment benefits;
6. Disability benefits;
7. Workers’ compensation benefits;
8. Public or private pensions;
9. Veterans’ benefits;
10. Federal student loans, federal student grants, and federal work study funds; and
11. Ninety percent of your wages or salary earned in the last sixty days.”
The omission of this information, the lawsuit argues, could affect the plaintiff’s decision to pay the alleged obligation. Under the false impression that “any and all types of income” could be collected from her, the woman may decide to submit a payment she might not have otherwise made, the case concludes.