Verdict serves as a warning to debt collectors in Minnesota

A Missouri woman was awarded $83 million by a jury who found that she was wrongly harassed over a debt that she did not owe. The woman was taken to court by Portfolio Recovery Associates LLC after the company claimed that she had a past due credit card debt of $1,000. However, the debt actually belonged to a man in the same area with a similar name.

The $83 million judgement was broken down into two separate parts. First, she was awarded $250,000 because the debt collector violated the Fair Debt Collection Practices Act. Additionally, she was awarded $82,990,000 in punitive damages due to malicious prosecution on the part of the debt collector. A representative for PRA Group Inc., the parent company of Portfolio Recovery, said that it would challenge the award.

Those who are familiar with debt collection practices say that many debt collectors will try to use fear as a method of compelling payment. However, those who are told that they owe a past due debt should first ask for verification that the debt is valid. Those who know and assert their rights may be less likely to face legal action or deal with an account in collection staying on their credit reports.

Anyone who is struggling with overwhelming debt may wish to consider filing for bankruptcy. An attorney may be able to explain how filing for bankruptcy may stop creditors from making phone calls or sending collection letters. If a debt is discharged, creditors cannot take any further action to compel payment of that debt. Therefore, it may be an effective tactic that will keep creditors at arms-length and allow a debtor to obtain a fresh financial start.

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