Tuesday, May 27, 2014

Judge Posner's Collections Letter Template

Courts don’t often help lawyers out by providing templates, but Judge Posner’s opinion in Bartlett v. Heibl, 128 F.3d 497 (7th Cir. 1997) offers a form letter for those seeking to collect certain consumer debts. In the underlying lawsuit, the plaintiff sued Heibl, a lawyer, for violation of the Fair Debt Collection Practices Act, claiming Heibl’s collection letter was so confusing it didn’t meet the Act’s required notice provisions. This copy is somewhat grainy (and written in the dreaded Courier font), but still readable:


The Seventh Circuit agreed, concluding Heibl’s letter was confusing and impliedly contradictory. The court noted, for example, the confusion created by reference to the one-week and thirty-day time periods:

On the one hand, Heibl's letter tells the debtor that if he doesn't pay within a week he's going to be sued. On the other hand, it tells him that he can contest the debt within thirty days. This leaves up in the air what happens if he is sued on the eighth day, say, and disputes the debt on the tenth day. He might well wonder what good it would do him to dispute the debt if he can't stave off a lawsuit. The net effect of the juxtaposition of the one-week and thirty-day crucial periods is to turn the required disclosure into legal gibberish. That's as bad as an outright contradiction.

Id. at 501.

To avoid future uncertainty, the court offered a suggested revision to Heibl’s letter that would comply with the notice requirements of the Act:

I have been retained by Micard Services to collect from you the entire balance, which as of September 25, 1995, was $1,656.90, that you owe Micard Services on your MasterCard Account No. 5414701617068749.

If you want to resolve this matter without a lawsuit, you must, within one week of the date of this letter, either pay Micard $316 against the balance that you owe (unless you've paid it since your last statement) or call Micard at 1–800–221–5920 ext. 6130 and work out arrangements for payment with it. If you do neither of these things, I will be entitled to file a lawsuit against you, for the collection of this debt, when the week is over.

Federal law gives you thirty days after you receive this letter to dispute the validity of the debt or any part of it. If you don't dispute it within that period, I'll assume that it's valid. If you do dispute it—by notifying me in writing to that effect—I will, as required by the law, obtain and mail to you proof of the debt. And if, within the same period, you request in writing the name and address of your original creditor, if the original creditor is different from the current creditor (Micard Services), I will furnish you with that information too.

The law does not require me to wait until the end of the thirty-day period before suing you to collect this debt. If, however, you request proof of the debt or the name and address of the original creditor within the thirty-day period that begins with your receipt of this letter, the law requires me to suspend my efforts (through litigation or otherwise) to collect the debt until I mail the requested information to you.

Id. at 501-02.

I think the revised letter could still be misunderstood, but that’s a result of the complexity of the Act, not the language of the letter itself. This example certainly isn’t the only way the original letter could have been redrafted to improve clarity. But a lawyer could use this revised letter as a template for future collection letters with some assurance (at least in the 7th Circuit) that a court wouldn’t later find the letter confusing or ambiguous.

We lawyers like to use the fancy words we learned in law school to make ourselves sound smart and to encourage others to recognize we are lawyers with special training. But, as this case demonstrates, a lawyer can shoot himself in the foot by using those fancy words at the expense of clarity.

Last week I talked about client letters, and even though this letter was to a creditor, it’s also a good reminder to be clear in your client letters. If you aren’t clear, you client could misunderstand the implications of the litigation or potential outcomes, leading to an unhappy client and potential malpractice suit. You should draft clear, concise letters no matter the recipient, but they’re especially important when written to a non-lawyer.

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