First of all, you cannot be arrested and jailed for failing to pay a debt
(except for back child support). And a creditor or bill collector
CANNOT just confiscate your tax refund or withdraw money from your bank account
(the IRS can seize your accounts for back taxes). If you have a collateralized
loan, they simply take (repossess) the asset.
If you have uncollateralized debts (i.e. credit cards), typically, commercial
creditors will place your account with a collection agency. If that does
not yield the desired results, they will then proceed to sue you to win
a judgment against you.
When collections are sent to debt collectors, they must follow the terms
set forth in the
Fair Debt Collection Practices Act (FDCPA) in all collection efforts. If the FDCPA is violated, a debtor may sue
the collection agency for damages and attorney fee as well as the individual
debt collector within 12 months. (1)
By knowing your rights, there are several actions you can take to prevent
yourself from becoming a victim of creditor harassment. Here we will explain
the FDCPA and explain those rights.
The purpose of the FDCPA is to protect debtors from abusive, humiliating
and unfair practices during collection actions by third parties debt collectors,
Creditor vs. Collection Agency (Debt Collector)
If the owner of a local dry cleaner calls to collect a debt you owe, that
is perfectly legal and is not covered under the FDCPA. The reason that
is not covered is that the owner is not classified as a debt collector
according to the definitions set forth by the FDCPA. The rules only apply
to debt collection agencies and their employees.
When Debt Collectors Can Contact You
As a third party collector, a debt collector must follow stringent guidelines
set forth by the FDCPA:
CANNOT contact a debtor outside of these hours:
Between the hours of 8:00 AM - 9:00 PM
Collector and debtor can
mutually agree to a more convenient time that may fall outside of the hours stated
Where Debt Collectors Can Call
Debt collectors are permitted to call debtors at their homes or offices.
If a debtor tells a debt collector to not call their place of work, the
CANNOT call there again. This can be accomplished either verbally or in writing.
- You can also get collectors to stop calling your home (cell) phones by
requesting it in writing.
Who Debt Collectors May Call
- They may call associates, neighbors, and relatives to attempt to get your number
are prohibited from disclosing that they work for a debt collection agency
Theyare prohibited from revealing the nature of the call, i.e. debt collection
They can only call each third parties
What Debt Collectors Can Do
Under the terms of the
FDCPA debt collectors
can only tell a debtor about the debt and request payment
- Debt collectors may be authorized to work out a payment schedule or settlement
Debt collectors are prohibited from harassing debtors, threatening arrest,
or bodily harm - It is illegal
Debt collectors are prohibited
from lying and telling a debtor that she will be sued unless the creditor
is, in fact, ready to do so
It is very important for you to understand your legal rights as they relate
to every one of your debts as well as what each creditor's rights
are. You are more than likely up against lenders with far greater legal
resources than you, so having someone like the professionals at the
Law Offices of James C. Shields would benefit you greatly.
Contact us today to discuss your situation, get advice on protecting your rights,
and discuss the best course of action.