Creditor Harassment - Know Your Rights

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 FDCPA

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:

  1. Debt collectors CANNOT contact a debtor outside of these hours: Between the hours of 8:00 AM - 9:00 PM
  2. 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.

  1. If a debtor tells a debt collector to not call their place of work, the collector CANNOT call there again. This can be accomplished either verbally or in writing.
  2. You can also get collectors to stop calling your home (cell) phones by requesting it in writing.

Who Debt Collectors May Call

  1. They may call associates, neighbors, and relatives to attempt to get your number
  2. They are prohibited from disclosing that they work for a debt collection agency
  3. Theyare prohibited from revealing the nature of the call, i.e. debt collection
  4. They can only call each third parties one time

What Debt Collectors Can Do

  1. Under the terms of the FDCPA debt collectors can only tell a debtor about the debt and request payment
  2. Debt collectors may be authorized to work out a payment schedule or settlement
  3. Debt collectors are prohibited from harassing debtors, threatening arrest, or bodily harm - It is illegal
  4. 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 (2)

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.

Article Resources

(1) https://www.nolo.com/legal-encyclopedia/free-books/small-business-book/chapter4-4.html]

(2) https://www.investopedia.com/terms/f/fair-debt-collection-practices-act-fdcpa.asp

https://www.consumer.ftc.gov/articles/debt-collection-faqs