The Facts About Debt Collection

Dealing with a debt collection agency is definitely one of the more stressful things in life. If you have fallen behind with your payments to one or more of your creditors, the odds are you will soon be hearing from a debt collector, if you haven’t already.

Debt collectors are people who attempt to collect debts owed to other people. Lawyers who collect debts are also considered debt collectors.

If you are currently experiencing this situation or feel that you may be in the near future, it is a good idea to know the facts surrounding debt collection. It is also important to know your legal rights when dealing with these collection agencies.

Normally, you will not hear from a debt collection agency until you have missed several months’ worth of payments to the creditor. By this time, the creditor has taken a loss on your account and has either sold it at a discounted price to a collection agency or is using an in-house agency to try and get payment from you. Either way, your missed payments will be reported to the credit bureaus.

Federal law requires that debt collectors treat you fairly and with respect. These are some basic guidelines to what a debt collector can and cannot do.

  1. A debt collector is allowed to contact you but only after 8am and no later than 9pm, unless you agree otherwise. They may get in touch with you in person, by telephone, or by mail, telegram, or fax. If your employer prohibits it, they may not contact you at your workplace.
  2. If you have an attorney representing you in this matter, the debt collector must contact the attorney directly, not you. They are allowed to contact other people but only to find out an address or phone number for you. If they have personally spoken with you, they are not allowed to call others.
  3. A debt collector may not harass you or use profanity. They also may not threaten you in any way, either directly or implied.
  4. A debt collector may not lie or make misleading statements when speaking with you or anyone else. They cannot say they are someone else. They are not allowed to discuss your financial situation with a third party.
Debt Collection FAQs

Having financial problems is a difficult and stressful situation. If you are also dealing with a debt collection agency, the pressure can be overwhelming. The Federal Trade Commission is in charge of enforcing the Fair Debt Collection Practices Act (FDCPA). This act protects consumers from unfair and deceptive collection methods.

Here we offer some of the most frequently asked questions regarding debt collectors as well as practical answers to help you get through this tough financial period.

What debts are covered under the FDCPA?

The Act covers household, personal and family debts, including money owed on a car loan, medical bill, mortgage and credit cards. It does not cover bills owed to run a business.

When is a debt collector allowed to contact me?

Unless you agree to it, a debt collector can only contact you between the hours of 8am and 9pm. If your employer prohibits call to the workplace, a debt collector may not contact you at your place of employment. You must inform the debt collector about this policy, either verbally or in writing.

Is it possible to stop a debt collector from contacting me?

You might want to consider speaking with the debt collector initially to find out the specifics about why they are contacting you. If, after speaking with them, you decide you don’t want them to contact you again, tell the collector (in writing) to stop contacting you.

Make a copy of your letter and send it by certified mail (return receipt requested) to the debt collection agency. Once the agency receives your notification, they cannot contact you unless it is to verify that they will not call you again. Sending this letter to the debt collection agency does not release you from what you owe. You can still be sued to collect the debt.

Can a debt collector talk to other people about my debt?

If you have an attorney representing you about this debt, the debt collector is required to speak with the attorney, not to you. Collectors may only speak with other people in an attempt to get a phone number or address for you. Normally, they are allowed to contact a third party only once.

What information does the debt collector have to give me about the debt?

Within five days of speaking with you, the debt collector must send you written notification stating how much money you owe, the name of the creditor seeking payment, and steps to take if you want to initiate a dispute.

What are debt collectors not allowed to do?

Debt collectors are not allowed to harass or threaten you or any third party they contact regarding you. They may not make repeated phone calls in an annoying manner or use obscene or profane language. They may not make threats, either directly or implied, towards you.

They also may not claim that they are attorneys or work for the government. They cannot accuse you of committing a crime by owing a debt. Debt collectors may not give false information to anyone, including credit bureaus.

I receive federal benefits. Can they be garnished?

Many federal benefits are excluded from garnishment. These include: social security benefits, veteran’s benefits, service member’s pay, military annuities and survivor’s benefits, and student assistance.

What happens if a debt collector sues me for payment?

If a debt collector files a lawsuit against you for the money owed, you must respond to the lawsuit. You can do this either personally or through an attorney. To preserve your legal rights, you must notify the court by the specific date mentioned in the lawsuit.

If I think a debt collector has used questionable methods when dealing with me, what can I do?

You can report any problems or concerns to your state Attorney General’s office and to the Federal Trade Commission.