New FDCPA Lawsuit Claims Statute of Limitations on Debt

A plaintiff has come forward to file a new Fair Debt Collection Practices Act (FDCPA) lawsuit in the U.S. District Court for the Eastern District of New York on March 14, 2018.

The plaintiff, Mendel R., is bringing this complaint against Rosicki, Rosicki & Associates, Uwanyne M. Esq., and Megan S., Esq. Mendel says he is a citizen and resident of the State of New York and an American consumer according to FDCPA legal definition. He claims the FDCPA statute of limitations on debt was violated by the defendants.

The loan in question, which is allegedly time-barred under the FDCPA statute of limitations on debt, was originally a home loan through HSBC Bank which went into default status during 2009, according to Mendel.

The bank filed the next year for foreclosure of the home. This initial bank foreclosure was dismissed on Aug. 25, 2014. The plaintiff alleges that the mortgage debt became time-barred under the statute of limitations on debt on March 6, 2016.

When the statute of limitations on debt has passed, the debt may no longer be attached to the real estate legally and it loses its legal weight in court. The debt itself may remain valid despite no longer being tied to the home or business property, however.

According to the lawsuit, the FDCPA allows banks and mortgage companies in these circumstances to seek debt repayment voluntarily if efforts are made without threat or legal proceedings.

The defendants in this case were originally hired by HSBC Bank as counsel for the initial foreclosure, alleges the plaintiff. Because of this status, there could be no doubt—according to the plaintiff—that they knew the home loan was time-barred prior to starting the second foreclosure after the statute of limitations on debt had expired.

Yet on Nov. 10, 2017, Rosicki, Rosicki & Associates et al. allegedly sent Mendel R. a collection letter breaking down the debt of $587,871.60 accordingly:

• Principal Balance: $392,715.02
• Accrued Interest: $130,398.28
• Late Charges: $2,993.64
• Escrow Balance: $59,439.74
• Miscellaneous Charges: $415.00
• Attorney’s Fees: $1,485.00
• Search: $425.00

The lawsuit mentions that it is a violation of New York City regulations for a debt collector to send a communication to a debtor without it containing debtor rights information pertaining to time-barred accounts.

This letter as addressed to Mendel had no such information and allegedly was followed by the filing of foreclosure in the Supreme Court of the State of New York.

The foreclosure filing allegedly contained fraudulent information concerning the original date of default. Supposedly, the loan had been ‘re-aged’ conveniently to an accelerated due date of March 1, 2012 when the property was already in initial foreclosure.

The defendants are accused by the plaintiff of doing this willfully and knowingly, given the fact that they were the counsel of record during that first action.

Mendel states through his counsel that this is an attempt to trick him into making a payment. Once a payment is made on a time-barred debt, the clock starts over again on the statute of limitations. He says the defendants are liable for violations of the FDCPA and New York City and state law. He is asking for treble damages with attorney and court costs included.

The FDCPA Lawsuit is Case No. 1:18-cv-01567-ERK-CLP in U.S. District Court for the Eastern District of New York.

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DISCLAIMER: Debt collection itself is not illegal. However, debt collection firms collecting on consumer debts must adhere to the FDCPA. Even though debt attorneys are investigating these companies, their debt collection practices may be legal.