Consumer Law

Debt Collection FAQs

By M. Stan Herring

The Federal Trade Commission has posted an article that gives a very good overview of what debt collectors can and cannot do when they contact you. The FTC says that the Fair Debt Collection Practices Act covers "personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn?t cover debts you incurred to run a business."

Just because the FDCPA covers such a range of debts doesn't mean debt collectors can contact you in certain ways. For instance, they aren't supposed to call before 8am and after 9pm unless you agree otherwise. They cannot contact you through writing or orally at your place of work, either. However, avoiding a debt collector won't make the problem go away. You might want to talk to them to discuss options to repay the debt. Also, talking with a debt collector can let you know if you are being wrongfully charged for a debt that isn't yours. If you want the collector to stop contact you, you must submit a notification in writing.

Make a copy of your letter. Send the original by certified mail, and pay for a ?return receipt? so you?ll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit. Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.

The debt collector can contact the attorney representing you instead of you personally. If you don't have an attorney, they may contact neighbors or relatives or coworkers but only to obtain basic information like your name and address...they cannot discuss anything about your debt with anyone else. Debt collectors are required to send you a "validation notice" within five days after they first contact you. To get the collector to stop contacting you, you must send a letter within 30 days of receiving the validation notice.

Here is a list of some of the things debt collectors are prohibited from doing:

Harassment. Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:

use threats of violence or harm;
publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
use obscene or profane language; or
repeatedly use the phone to annoy someone.
False statements. Debt collectors may not lie when they are trying to collect a debt. For example, they may not:

falsely claim that they are attorneys or government representatives;
falsely claim that you have committed a crime;
falsely represent that they operate or work for a credit reporting company;
misrepresent the amount you owe;
indicate that papers they send you are legal forms if they aren?t; or
indicate that papers they send to you aren?t legal forms if they are.
Debt collectors also are prohibited from saying that:

you will be arrested if you don?t pay your debt;
they?ll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so; or
legal action will be taken against you, if doing so would be illegal or if they don?t intend to take the action.
Debt collectors may not:

give false credit information about you to anyone, including a credit reporting company;
send you anything that looks like an official document from a court or government agency if it isn?t; or
use a false company name.
Unfair practices. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:

try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt ? or your state law ? allows the charge;
deposit a post-dated check early;
take or threaten to take your property unless it can be done legally; or
contact you by postcard.

Debt collectors have the ability to sue you to collect the debt. This enables them to obtain a garnishment order against you, wherein a third party, like your bank, is required to turn over funds from your account to pay the debt.

However, not all funds can be garnished. The below are exempt:

-Social Security Benefits -Supplemental Security Income (SSI) Benefits -Veterans? Benefits -Civil Service and Federal Retirement and Disability Benefits -Service Members? Pay -Military Annuities and Survivors? Benefits -Student Assistance -Railroad Retirement Benefits -Merchant Seamen Wages -Longshoremen?s and Harbor Workers? Death and Disability Benefits -Foreign Service Retirement and Disability Benefits -Compensation for Injury, Death, or Detention of Employees of U.S. Contractors Outside the U.S. -Federal Emergency Management Agency Federal Disaster Assistance

If you have had problems with debt collectors, such as harassment, and have questions or concerns, feel free to contact us through our website or by calling 204-879-2447.

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Full post as published by Alabama Consumer Blog on March 13, 2010 (boomark / email).