Iowa law requires a creditor to provide a debtor with a written notice of their right to cure a delinquent amount before a lawsuit can be filed to collect a consumer debt such as a credit card, line of credit or personal loan. The notice must provide the debtor at least 20 days to pay the defaulted amount. The notice to cure also has to include a statement of the total amount to be paid, plus an itemization of the charges. Failure to correctly itemize the total payment due can lead to a dismissal of the lawsuit.
A recent ruling from the Iowa District Court in Fremont County shows the consequences of a creditor failing to provide an adequate notice to cure. Capital One Bank and its attorneys had sent a notice to cure that failed to itemize the amount owed. Although the notice said how much was due in total, it failed to say how much of the amount was for late charges, interest, overlimit fees and actual credit card charges. The lawsuit brought by Capital One was also filed in a county that was neither the residence of the defendant debtor nor the county where the loan was made, another requirement of Iowa law. Lastly, at the time the debtor received the Capital One credit card she was not old enough to enter into a binding contract. As a result of all these errors by Capital One, the Court dismissed the lawsuit brought by Capital One and awarded the debtor damages and costs and ordered Capital One to pay the debtor’s attorney’s fees. If you’re facing similar debt collection tactics contact us at Nancy L. Thompson Law Office.