Start My Answer
loading...

Restitution – Definition

George Simons | October 19, 2022

George Simons
Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD-MBA. In his spare time, George likes to cook, because he likes to eat.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: Restitution is basically another word for compensation. Here is SoloSuit's guide on restitution and how it can apply in debt collection lawsuits.

Restitution is a court-ordered payment one party makes to another to compensate them for damages caused by the crime. All US states have laws requiring convicted defendants to pay restitution to their victims. Here's all you need to know about this form of payment and how it works.

When does restitution apply?

Not every case warrants the need for restitution. However, the court can award restitution if:

  • It's necessary for rehabilitation.
  • It's required to make the victim of the crime feel 'whole' again.
  • If the victim suffered financial losses due to the defendant's crime.

Restitution applies in different contexts, especially in personal injury cases. Examples of such cases include sexual assault, drunk driving, identity theft, etc.

Real-life examples of restitution orders

The Fair Debt Collections Practices Act usually governs the activities of a debt collector. When a creditor or debt collector violates this act, they might be subject to a fine. In addition, in some cases, the court might order restitution for certain offenses.

For instance, in the summer of 2021, a Washington state court ordered Machol & Johannes, a Denver-based debt collection agency, to return approximately $475,000 to at least 5,000 consumers in Washington. In addition, the court ordered the company to forgive up to $250,000 in fees and costs for many more consumers in the state.

This ruling was triggered by a lawsuit filed by the Washington State Attorney General, Bob Ferguson, over a series of unlawful debt collection practices by the agency. According to the lawsuit, the collection company had failed to offer consumers garnishment exemptions as required by law. They also charged consumers fees and other costs despite not collecting any money from them.

Further investigations also revealed that the company operated illegally without a license between 2011 and 2012.

That aside, the AG's office found that the company had failed to inform consumers that they could legally protect a portion of assets in their accounts from garnishment. As a result, the collection agency garnished more than was allowed by debt collection laws.

The ruling required the company to return the money collected during the period they operated without a license. The reasoning behind this order was that the company should not have collected money from consumers if it was not operating legally in the first place.

Is restitution the same as a fine?

Although these two usually involve financial payments, they are quite different from each other. The main goal of restitution is to compensate the victims of a crime. On the other hand, fines are paid as a form of punishment for the defendant's crime.

What to do if contacted by a debt collector

From the example above, it's clear that many debt collection companies violate the rights of consumers across the country. But they tend to get away with it because many consumers are not aware that the law protects them from such practices. Additionally, some consumers are even more afraid of being in debt than actually confronting debt collection companies when they violate their rights.

For this reason, it's becoming increasingly important to understand how to protect yourself from unfair practices by debt collectors. Here's how:

Do not ignore debt collectors

Debt collectors will try to reach you as many times as possible unless you ask them to stop. Ignoring them won't make them stop contacting you. Instead, it gives them more reasons to use different tactics to recover the amount you allegedly owe.

Ask for debt validation

If a debt collector contacts you about a debt, the most important thing is to ask them, in writing, to verify the debt. The debt collector must prove that you owe the debt when you ask for verification. This buys you some time to evaluate your options. Send a formal debt verification request by mailing a Debt Validation Letter to the collection agency.

Know your rights

The FDCPA protects you from unfair debt collection practices. Generally, debt collectors cannot:

  • Keep calling you if you ask them to stop.
  • Discuss the debt with anyone else other than you or your attorney.
  • Report false information on your credit report.
  • Use aggressive or abusive language when contacting you.
  • Contact you before 8 a.m. and after 9 p.m.
  • Threaten you with violence or jail if you don't settle the debt.
  • Lie about who they are.
  • Lie about the amount you allegedly owe.

If a debt collector has violated the FDCPA, you may eligible for compensation (also known as restitution) of up to $1,000 per violation.

What if a debt collector files a lawsuit against you?

Since debt collectors can't contact you when you ask them to stop, the only time they may be able to contact you is to inform you of their next course of action. In most cases, they'll let you know that they plan on filing a lawsuit against you.

If they file the lawsuit, you'll receive a Summons and Complaint letter. The Summons is a document confirming that you're being sued. The Complaint explains why exactly you're being sued. For example, if you defaulted on your payments, the Complaint will list that down as a reason for the lawsuit.

You will have up to 35 days to respond to the debt lawsuit, depending on which state you live in. After the deadline is up, a default judgment may be granted to the debt collector which gives them the right to garnish your wages or put liens on your properties to get the money back. This is why you should never ignore a debt collection lawsuit.

In your response, you should respond to each reason listed in the Complaint document for the lawsuit. You can either admit, deny, or claim you don't understand some or all of the allegations brought against you. In that case, the other party will have to prove that you owe the debt.

SoloSult makes responding to a debt collection lawsuit much easier and straightforward. Instead of filling out complex paperwork and wondering where to send it while done, you can use SoloSuit to draft your Answer in just 15 minutes.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

Get Started

We have answers.
Join our community of over 40,000 people.

You can ask your questions on the SoloSuit forum and the community will help you out. Whether you need help now or are just looking for support, we're here for you.

Ask a Question.

>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

How to Answer a Summons for debt collection in all 50 states

Here's a list of guides on how to respond to a debt collection lawsuit in each state:

The Ultimate 50 State Guide

Debt collector guides

Are you being contacted by a debt collector? We’re making guides on how to resolve debt with each one.

Arbitration

If the thought of going to court stresses you out, you’re not alone. Many Americans who are sued for credit card debt utilize a Motion to Compel Arbitration to push their case out of court and into arbitration.

Below are some resources on how to use an arbitration clause to your advantage and win a debt lawsuit.

Bankruptcy

Bankruptcy is a great way to legally resolve debt, but it's usually best to consider it as a last resort. Here are some bankruptcy guides to help you decide which debt resolution option is best for you.

Check your case status

Don’t have time to go to your local courthouse to check the status of your case? We’ve created state guides on how to check the status of your case throughout the US, complete with online search tools and court directories.

Credit

Debt has a big impact on your credit. Below is a list of guides on how to repair and improve your credit, even while managing major debt, along with other credit-related resources.

Debt collection FAQs

Find answers to some of our the most commonly-asked questions about debt collection below.

Debt collection documents and templates

If you're dealing with debt, these documents and templates will help you respond, protect your rights, negotiate, and resolve your debts.

Debt relief

We’ve created a specialized guide on how to find debt relief in all 50 states, complete with steps to take to find relief, state-specific resources, and more.

Debt settlement

Debt settlement is one of the most effective ways to resolve a debt and save money. We’ve created state guides on debt settlement. Find out how to settle in your state with a simple click and explore other debt settlement resources below.

Eviction

Facing an eviction? The following guides will help you navigate your situation with confidence.

Federal debt collection laws

Knowing your rights makes it easier to stand up for your rights. Below, we’ve compiled all our articles on federal debt collection laws that protect you from unfair practices.

Legal aid

Helping people find access to justice is at the heart of Solo's misison. If you're dealing with a legal debt issue, the following guides will help you through it.

Medical debt

Having a health challenge is stressful, but dealing with medical debt on top of it is overwhelming. Here are some resources on how to manage medical debt.

Personal finance

Learn how to manage your finances and overcome crushing debt. Check out our personal finance guides below.

State debt collection laws

Debt collection laws vary by state, so we have compiled a guide to each state’s debt collection laws to make it easier for you to stand up for your rights—no matter where you live.

Statute of limitations on debt

Like all debt collection laws, the statute of limitations on debt varies by state. So, we wrote guides on each state’s statutes and more.

Stop collection calls

Do you keep getting calls from an unknown number, only to realize that it’s a debt collector on the other line? If you’ve been called by any of the following numbers, chances are you have collectors coming after you, and we’ll tell you how to stop them.

Wage garnishment

Forgot to respond to your debt lawsuit? The judge may have ordered a default judgment against you, and with a default judgment, debt collectors can garnish your wages. Here are our guides on how to stop wage garnishment in your state, plus other wage garnishment resources.

The Debt Hotline

Hosted by Team Solo, The Debt Hotline breaks down debt and personal finance topics with help from attorneys, financial experts, and industry pros. We respond to real questions to help you navigate debt with knowledge and courage.

Other debt resources



Contents