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When is a “Debt” not a “Debt?”

Michael Rapp Sept. 17, 2012

An Attorney walks into my office and asks, “I have a client that is being harassed about some money they allegedly owe. Is that covered by the FDCPA?” My answer is “That depends.”The Fair Debt Collection Practices Act, like so many statutes, defines its own terms. “Debt” is defined to mean:

“any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family or household purposes, whether or not such obligation has been reduced to judgment.” 15 U.S.C. Section 1692a(5).

Collection agencies can attempt to collect on obligations or accounts which may not fall into the category of “debts” according to that definition.

Here are some examples where the courts have typically agreed are NOT debts:Tort claims are not “debts” because they do not arise from a “transaction.”

Child support payments are not “debts” either because the obligation to pay does not arise from a “transaction.”

Marital settlement agreement or Divorce agreement are also not considered a “debt.”

A court’s contempt citation is not a “debt.”

Taxes are not “debts.” It doesn’t matter if it is income taxes, taxes on property and motor vehicles, a bill from the tax man is generally not a “debt.”

Money owed for alleged shoplifting or for criminal restitution is also generally not a “debt” either.

However, just because something may not be a debt, doesn’t mean that no help exists. Kanas and Missouri consumers should contact the Consumer Legal Clinic, LLC if they are unsure whether an alleged account or obligation is covered by the FDCPA.