If you have been unable to pay off your debts for quite some time, you can expect that a debt collection agency will soon be harassing you. As their name suggests, they are in charge of collecting debts from delinquent debtors. They are oftentimes a third party agency hired by the creditor. They call you at work and even at home. They send you letters through snail mail or email. And if you still refuse to pay up, they will initiate the process of filing a case against you.
It is important to remember that once the collection is turned over to a debt collection agency, your debt will already be listed as a bad one in your credit history. This will be reflected on your credit report and in effect, will lower your credit score.
Consumer Protection from the FDCPA
Sometimes, debt collection can get nasty and the government has put up strict restrictions through the FTC or Federal Trade Commission. The FTC enforced the FDCPA or the Fair Debt Collection Practices Act to make sure that the debt collectors are neither deceptive, unfair or abusive when they start collecting your debt payments. Any debtor of a personal loan or debt is protected by this act. Business incurred debts are the only exception to this rule.
Upon receiving your case from the creditor, they will begin getting in touch with you to inform you about it. The debt collection agency will send you a “validation notice” through mail. This is usually sent within the first 5 days after the initial contact. This document will indicate the amount of money that you owe, the creditors name and the procedure that you have to follow in case the collection is not necessary.
If the collection information is incorrect and you do not owe the creditor money, you need to inform them as soon as possible so they can correct it. You can send a letter within 30 days to inform them of such and proceed to ask for verification of that particular debt. The collector should refrain from getting in touch with you until they have proof that you are indeed the debtor they need to contact.
Debt collectors are notorious for resorting to pestering calls to get debtors to pay up. If you can relate to that, then you should know that they have a time limit. They are not allowed to call before 8am or after 9pm. And if you are not allowed to take personal calls at work, then you can inform them in writing or even verbally of such arrangement and they should follow suit.
As bothersome as they may appear, you need to talk to them at least once. At least, you need to say that you are not the debtor that they are after or to tell them that you cannot pay. If you want to tell them that you do not want them to call you, it is best to do it in a letter. Send it through certified mail. Pay for a return receipt so you have proof. They should only get in touch with you to confirm your request or to tell you that they will be taking a more serious action.
If the agency cannot get in touch with you, they may talk to someone else but just to ask about how you can be reached. They are not supposed to talk to anyone about your debt, apart from your lawyer of course – at least if you are represented by one.
Should you decide to pay through the debt collection agency, you can discuss with them how to do that. If they are collecting more than one debt, you can choose which one you want to pay off first.
While this Act can protect you, that does not remove your responsibility to pay off your debts. They still have the power to sue you. If they win in court, they can ask the bank to hand over the funds from your account or even your employer to withhold a part of your wages, known as wage garnishment, depending on the specifications given by the judge. That does not include any federal benefits that you may have.
In case a debt collection agency violates any of these, you can sue the collector within one year. However, take note of the specific laws in your state as some have varying violation premises. The attorney general can assist you in determining the legal course of action against debt collection entities that have violated collection laws. A state or federal court can try the case and could award damages if proven that illegal collection methods were used. The case could be filed by an individual complainant or could be undertaken by a group of people against the same defendant known as class action lawsuit. The court has the discretion of awarding as high as $500,000 or 1% of defendant’s net worth, whichever is lower of the 2. The court can even award $1,000 even without much evidence the complainant went through actual damages.
For a list of the unfair practices of debt collection agencies, visit the FDCPA FAQ on the FTC website, specifically the for more details. For complaints, visit the nearest Attorney General in your State and also the Federal Trade Commission.
For financial advice, give NationalDebtRelief.com a call. Or fill up the form on this page and a financial expert will get in touch with you.
National Debt Relief helps people nationwide resolve $10k or more in unsecured debt. Our debt coaches negotiate with creditors on your behalf so that you pay a fraction of what you owe and can become debt free in as little as 24-48 months.
