CONSUMER TOPICS

Question:  What is a collection suit?

Answer:  The words "collection suit" generally refer to a suit by a creditor holding a claim upon a contract against a debtor.  A collection suit might be brought by a credit card company against its customer, or the holder of a promissory note against the maker of the note.  A collection suit is not necessarily a simple matter.  There may be defenses, such as failure of consideration, whether there was compliance with consumer protection statutes that govern the particular type of transaction, statute of limitations, misrepresentation, or whether a waiver or an accord and satisfaction occurred.  Often a collection suit is settled by an arrangement where the debtor makes installment payments over a period of time to the creditor.

Question:  What are consumer protection statutes?

Answer:  There are a large number of statutes that protect consumers in particular types of transactions - for example, health studio contracts; home improvement contracts between property owners and contractors; contracts that are solicited at the homeowners residence, which are often referred to as home solicitation contracts; contracts between buyers and sellers of property and real estate brokers, such as listing agreements; and contracts between vehicle owners and car repair agencies.  State laws often specify what terms and condition must be set forth in contracts with consumers.  Often the statutes provide that the consumer has the right of rescission (in other words, a right to cancel the contract) if the vendor has failed to comply with the statute.  Consumer protection statutes cover credit card transactions and the relationship between banks and their customers.  Some consumer protection statutes are created under federal law and apply in all of the states, while other consumer protection statutes are enacted by individual states and only protect the citizens who are residents of the particular state.