A proposed class action filed by two Wisconsin consumers alleges that Dobberstein Law Firm, LLC; BCG Equities, LLC; and Guardian Credit Union improperly attempted to collect an obligation included in a pending bankruptcy and misled a consumer regarding his last payment on a defaulted debt.
One plaintiff claims that after he initially filed for bankruptcy, Guardian illegally obtained a default judgment against him regarding his outstanding account balance of $5,511.33 despite being informed that the debt was included in the man’s pending bankruptcy proceedings.
“By continuing to pursue a default judgment against [the plaintiff] after he had filed for bankruptcy, Guardian violated the automatic stay imposed under the bankruptcy code and thus sought to collect a debt to which it was no longer legally entitled,” the suit explains.
After the man’s debt was discharged, the case says Guardian transferred the account to defendants BCG Equities and Dobberstein Law Firm, who allegedly sent a collection letter that listed a greater balance than the amount awarded in the default judgment. The suit attributes the increase in balance to post-judgment interest and claims the letter failed to properly disclose that the debt amount was subject to change.
The second plaintiff also takes issue with a collection notice sent by Dobberstein Law Firm in relation to his defaulted car loan of $27,991.71. The letter listed a “last activity date,” which the case argues could have been interpreted as a reference to the most recent payment made on the account. According to the suit, however, the date referred to a defaulted installment payment.
“A misrepresentation that a payment has been made misleads the consumer about the amount of time the debt remains valid and potentially, that the debt is valid when it is not,” the complaint reads, arguing that the debt collector’s misrepresentation could have caused the plaintiff to miscalculate the statute of limitations on the obligation.