Nearly everyone starts life as an adult with little or no debt, with the possible exception of student loans. However, over time, people accumulate credit cards, take out loans to purchase automobiles, and obtain mortgages to purchase homes. If you fall behind on your credit card or loan payments, especially if you’re several months in arrears, you’ll often have to deal with debt collectors. That’s never a pleasant experience; however, in the recent past, debt collectors could be downright menacing. Thanks to laws such as the Fair Debt Collection Practices Act, borrowers who’ve fallen on hard times no longer have to deal with debt collectors’ harassing tactics. Take a close look at this law, so you have a better understanding of how it could affect your situation.
The Fair Debt Collection Practices Act
Congress passed the Fair Debt Collection Practices Act (FDCPA) in 1966 and amended it in 2006. The law covers credit cards, mortgages, medical debt, and other types of personal or household debt. However, the act doesn’t cover business debts or collections by the original creditor. The Fair Debt Collection Practices Act places limits on what debt collectors can do when attempting to collect consumer debt. In particular, this law protects borrowers from unsavory collection agencies that use harassment when dealing with borrowers. If you’ve fallen into arrears on a mortgage or some other type of personal debt, and you’re expecting to deal with debt collectors, here are some of the things the law prohibits these agencies from doing.
1. Prohibition from Contacting Borrowers at Inconvenient Times and Places
The FDCPA prohibits collection agencies from contacting borrowers before 8am or after 9pm. Additionally, if the debt collector knows you cannot receive a call at your work or place of business, it cannot call you at that location.
2. No Harassment
Collection agencies cannot harass consumers. They cannot threaten you or use abusive or profane language when discussing your debts. They also cannot harass or threaten other people in pursuit of your debts.
3. Dealing with Your Attorney
If a debt collector knows you’ve hired an attorney to assist you in addressing your debt issue, then the collection agency must deal with that attorney. If you’ve hired an attorney and a debt collection agency calls you, then you should provide your attorney’s contact information.
4. Ending Contact with Debt Collectors
If a consumer wishes debt collectors to cease contacting them, they may do so. They have to prepare a written letter and send it to the debt collection agency indicating they wish no further communications from that agency. While this will limit the collection agency’s ability to contact a borrower, they can still use other legal means in their attempt to collect the debt.
How to Deal with a Collection Agency
If contacted by a collection agency, you should first talk with the collector to see if the matter can be resolved. This is true even if you believe you don’t owe the debt or think you’re being contacted by mistake. In other words, don’t just ignore that first call. If you believe that the collector is correct, you can attempt to settle the debt. If you believe the debt collector has made a mistake, you can also request more information on the debt to determine the best way to address the issue. If you feel the debt collection agency is violating the FDCPA, you could report the company to your state’s Attorney General and the Federal Trade Commission (FTC). Additionally, some states have their own laws about debt collection, and your Attorney General’s office can help you understand your rights in your state.
Other Ways to Handle Debt
While the Fair Debt Collection Practices Act can protect you from being harassed by collection agencies, it can’t protect you from your debt. If you’ve run up a lot of credit card debt, you’ll have to pay it off one way or another. Many families have chosen a technique called debt relief (or debt settlement) as a way to get out from under their debt. To start, the individual in need of debt relief contacts a debt relief company such as National Debt Relief to negotiate a debt settlement on his or her behalf. National Debt Relief has a proven track record for being able to negotiate settlements with credit card companies where the debt has been reduced by 50% or more. Debt relief like this can have an effect on your credit rating, but this is usually just for the short term and doesn’t have nearly as drastic an effect as filing for bankruptcy.
If the idea of debt relief appeals to you, be sure to go to the National Debt Relief’s website and fill out the free debt analysis form you’ll find there. The company charges no upfront fees so you have nothing to lose – except maybe half your debt!