Heredia v. Capital Management Services, L.P.

Dist. Ct. erred in granting defendant-debt collector’s motion to dismiss instant Fair Debt Collection Practices Act (FDCPA) action, alleging that defendant’s dunning letter that told plaintiff-debtor that debtor could satisfy debt by paying lesser amount than what was owed, and that creditor “may file 1099C form” with IRS because of the lesser payment was misleading under FDCPA. IRS requires creditor to file 1099C form if it has forgiven $600 or more in principal, and amounts stated in instant letter indicated that creditor was willing to forgive less than $600 if plaintiff paid requested amount. As such, plaintiff could plausibly allege that it was misleading to unsophisticated debtor to state that creditor may file 1099C form where creditor never would file such a form with IRS. Moreover, defendant’s reference to 1099C form might instill angst to debtor to extent that said reference pertained to threat to involve IRS with collection of instant debt, and that said threat was designed to intimidate debtor into paying debt.