Kelly Shelton

Financial stress keeping you up nights?  Debt collectors harassing you?  Receiving threatening phone calls?  Trouble dealing with financial stress?  Falsely accused of owing money?  Unsure of your legal rights?  You're not alone!  You have powerful rights -- learn 10 debt collection laws to protect yourself.

Most of us have at least one thing in common - we have debt. If you've ever been late on a car payment, you may have received a few "friendly reminders" from a debt collection agency or bank.  However, if you've ever been REALLY late or missed a debt payment, you may have even dealt with behavior bordering on creditor harassment. Some creditors call repeatedly at home and work; some may make threatening comments or ultimatums. This can be the most financial stress imaginable.

Debt collectors understand it can be embarrassing if you're struggling to pay your debts, and even more embarrassing to be accused of not paying them.  They often use this knowledge to intimidate you into believing you're powerless.  Being late on a bill doesn't make you a bad person. It also doesn't take away your rights. It simply means you're having a difficult time.  As long as you're trying to repay the debt, however slowly, you deserve respect and professionalism (even from your creditors).

You Have Powerful Rights!

If you have debts to pay, we encourage you to pay them. It's also important to know your rights so you can defend yourself against creditor harassment. Learn the basics of debt collection laws to protect you.

The Fair Debt Collection Practices Act (FDCPA) is a federal law requiring debt collectors to treat you fairly. It outlines your rights and is designed to protect you from abusive debt collection practices.  Technically it's meant for collectors, but many creditors also abide by it's laws. There are also many state laws to protect you. Check with your State's Attorney General's Office for more information on state debt collection laws.

There are a few definite rules collectors, attorneys or any third party representing a creditor has to follow in contacting you. The debt must be consumer or personal debt. The FDCPA does not apply to business debt.

Ten Basic Laws to Protect You from Creditor Harassment:

1. No Intimidation or Creditor Harassment:  They cannot threaten violence or physical harm to you, your reputation, or property.  Debt collectors also cannot use abusive language.
2. They cannot call you before 8 am or after 9 pm of your time zone, unless you agree.
3. They cannot call you at work once you tell them your employer prohibits such calls at work.
4. They cannot contact you after you have written them a letter asking them to cease communication with you.
5. They cannot call repeatedly or call without identifying themselves as collectors.
6. They cannot make false statements such as:                                                                            

·        Falsely represent the character, amount, or legal status of your debt;

·        Claim to be attorneys or government representatives;

·        Imply you've committed a crime or threaten your arrest;

·        Threaten action they do not intend to take, or cannot legally take;

7. They cannot add interest, fees, or charges not authorized in the original credit agreement.
8. They cannot deposit a post-dated check prior to its date.
9. They cannot publicize your debt except to a credit bureau. Debt collectors cannot notify you with postcards (others could read about your debt.)
10. They are allowed to contact other people only to find out where you live, your phone number, or where you work.  They cannot contact a third-party more than once or tell anyone except your attorney that you owe money.

What to Do:

Financial stress from debt is one of the most difficult situations people face in today's society, the best course of action is to head off creditor harassment before it happens.  If you have more bills than you can afford to pay, then pay your most important bills first: (mortgage, rent, car payment -- secured debt first. Then pay your utilities etc. things you need to live.) 

Call your creditor first - If you cannot pay a bill on time, promptly call the creditor and explain your situation.  This often keeps them from turning over your bill to a collector.  It's in their best interest to work with you and get their money directly.

Write a cease letter - If you call the creditor and don't get anywhere, the simplest way to stop creditor harassment is to write the collector a cease letter.  Federal law requires collection agencies to stop their efforts to collect after they receive a written request. The letter should state why you cannot pay and your plans for future payment.  If it applies, include any prior abusive tactics of the collector's employees and the resulting distress it caused you.

It's very important to keep a copy of the letter, and send it certified mail (return receipt requested.) If a cease letter doesn't stop the creditor harassment, a letter from your lawyer usually will. 

If a creditor violates the law it's important to keep good notes of date, time and details of any creditor harassment (including phone recordings and/or voice mail). Visit the Federal Trade Consumer Protection website for more helpful information. Then complain in writing to the following agencies:

The Federal Trade Commission

    Bureau of Consumer Potection

   Washington, DC  20580

Your State Attorney General's Office Bureau of Consumer Affairs

     The Better Business Bureau

What if a debt collector tries to collect a debt I don't believe I owe?   

Knowing your legal rights is the best way to protect yourself from creditor harassment and to begin dealing with financial stress in a healthy and lasting way.

How to Stop False Collections:  Follow certain steps, under the FDCPA, and a person in this situation can get the debt collector to stop.

1. Send a certified letter asking for verification of the debt. 

a.    A debt collector properly verifies the debt by sending photocopies of documented proof that you owe the debt. 

b.    The debt collector needs to provide a letter offering to verify the debt within 5 days after their initial collection attempt. There are some variations to this rule whereby the debt collector can modify their obligations somewhat. But no matter what, if you dispute the debt you need to ask the debt collector to verify the debt immediately.

2. Ask the debt collector to stop contacting you because you dispute the debt.
3. Once the debt collector has been told that you dispute the debt, they are barred from contacting you to try and collect the debt or putting negative information on your credit report (but they can still call to let you know they are going to sue you).

This ability to have a debt verified is an important part of the FDCPA. So important, that even inadvertent violations constitute violations of this Act.  Seeking the council of a local attorney to evaluate your case -- many will do an initial consult for free.