If you are drowning in debt and receiving daily phone calls from at least one debt collector, it’s important that you know your rights. Thanks to the Fair Debt Collection Practices Act (FDCPA), there are laws designed to protect you from that unwanted communication.
What collectors can’t do
The FDCPA spells out several things debt collectors are prohibited from doing. For example, they cannot call you before 8 AM or after 9 PM or call you multiple times a day. In addition, they are not to call you at work without your permission. The collector is also not to discuss your debt with friends or family members and is prevented from misrepresenting the status of a debt or claiming to be affiliated with some governmental entity.
How to stop those harassing phone calls
According to the FDCPA, you can stop phone calls by sending the debt collector a cease and desist letter. This letter communicates to the debt collector that he or she is not to contact you anymore. You need to send your letter registered mail and return receipt requested so you can prove that it was received.
What collectors can do
Once the collector receives this letter, they can only reach out to inform you that they will not be contacting you anymore or to notify you that they plan on taking legal action, such as starting a lawsuit against you.
If they contact you for any other reason, you can report it to your state’s attorney general’s office or to the Better Business Bureau. And if the harassment continues, you could hire an attorney and try filing a lawsuit against the collection agency. However, this can be difficult as many agencies are headquartered offshore.
People Also Read
Debt Relief
Can debt collectors and loan companies call your employer?
Debt Relief
How To Stop 99% Of All Calls From Debt Collectors
The worst thing they can do
Let’s suppose you owe $5,000 to a credit card company that has sold your debt to a collection agency. The agency may have paid less than $100 for the debt but that doesn’t change the fact that you still owe $5,000. If you fail to pay it off, the collection agency could file a suit. If you were to fail to show up for your court date, the debt collector could get a summary judgment. If you make an appearance, the collector might still get a judgment.
Once the agency has a judgment, they may be able to put a lien on your home. If you were to ever sell the home, that $5,000 would come off the top. In other words, if you thought you had $10,000 in equity, you would end up getting only $5,000 while the collection agency received the other $5,000. This makes it a lot more challenging to sell your home since you would have to deal with this first.
Bankruptcy or debt settlement?
Bankruptcy or debt settlement could be better options than letting a debt collection agency get a judgment and put a lien on your house. A Chapter 7 bankruptcy would discharge most of your unsecured debts including personal loans, lines of credit, medical and credit card debts.
Many people choose debt settlement instead of filing for bankruptcy as an alternative to bankruptcy. A debt settlement firm can negotiate settlements to reduce the debt amount on your unsecured debts.
Legitimate debt settlement companies
Keep in mind that a legitimate debt settlement company will not require any payments upfront. It is actually illegal! The money you send them should be deposited into an FDIC- insured trust that only you can manage. You will pay nothing until and if the company successfully settles your debt and provides you with a payment plan you approve.
If a debt collector oversteps their bounds, report them immediately. But the best way to make them go away is by resolving your debt.
Content Disclaimer:
The content provided is intended for informational purposes only. Estimates or statements contained within may be based on prior results or from third parties. The views expressed in these materials are those of the author and may not reflect the view of National Debt Relief. We make no guarantees that the information contained on this site will be accurate or applicable and results may vary depending on individual situations. Contact a financial and/or tax professional regarding your specific financial and tax situation. Please visit our terms of service for full terms governing the use this site.
FAQs
Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe. In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.
What are 2 things that debt collectors are not allowed to do? ›
Debt collectors cannot harass or abuse you. They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take. They also cannot make repeated calls over a short period to annoy or harass you.
What debt collectors don't want you to know? ›
Debt collectors don't want you to know that you can make them stop calling, they can't do most of what they tell you, payment deadlines are phony, threats are inflated, and they can't find out how much you have in the bank. Furthermore, if you're out of state, they may have no legal recourse to collect.
What are the illegal tactics of debt collection? ›
falsely claim you've committed a crime. threaten to sell a debt to a third party, and claim that, as a result, you'll lose defenses to payment you had against the creditor, such as a breach of warranty. communicate false credit information, like failing to state that you dispute a debt.
What not to tell a debt collector? ›
Don't provide personal or sensitive financial information
Never give out or confirm personal or sensitive financial information – such as your bank account, credit card, or full Social Security number – unless you know the company or person you are talking with is a real debt collector.
What is the 777 rule in collections? ›
Consumers are well-protected when it comes to debt collection. One of the most rigorous rules in their favor is the 7-in-7 rule. This rule states that a creditor must not contact the person who owes them money more than seven times within a 7-day period.
How long before a debt becomes uncollectible? ›
Statute of limitations on debt for all states
| State | Written | Oral |
|---|
| Alaska | 6 years | 6 |
| Arizona | 5 years | 3 |
| Arkansas | 6 years | 3 |
| California | 4 years | 2 |
46 more rowsJul 19, 2023
9 Ways to Turn the Tables on Debt Collectors
- Don't Wait for Them to Call. Consider picking up the phone and calling the debt collector yourself. ...
- Check Them Out. ...
- Dump it Back in Their Lap. ...
- Stick to Business. ...
- Show Them the Money. ...
- Ask to Speak to a Supervisor. ...
- Call Their Bluff. ...
- Tell Them to Take a Hike.
By paying the collection agency directly, the notification of the debt could stay on your credit report longer than if you attempt to use another option, like filing for bankruptcy. When institutions check your credit report and see this information on it, it may harm your ability to obtain loans.
How to get rid of debt collectors without paying? ›
You can sue the debt collector for violating the FDCPA. If you sue under the FDCPA and win, the debt collector must generally pay your attorney's fees and might also have to pay you damages. If you're having trouble with debt collection, you can submit a complaint with the CFPB.
Fair Debt Collection Practices Act
Calls before 8:00 a.m. or after 9:00 p.m. unless the collector knows such times are more convenient for the debtor. "Unfair or unconscionable means to collect or attempt to collect a debt" Any conduct to harass, oppress, or abuse.
Can you evade debt collectors? ›
Ignoring or avoiding a debt collector is unlikely to make the debt collector stop contacting you. If you believe you do not owe the debt, you should tell the debt collector. If the debt is yours and you can't afford to pay it, you may be able to decide with the debt collector.
What if a debt collector refuses payment? ›
Your creditors do not have to accept your offer of payment or freeze interest. If they continue to refuse what you are asking for, carry on making the payments you have offered anyway. Keep trying to persuade your creditors by writing to them again.
What's the worst a debt collector can do? ›
Even if you owe money, debt collectors aren't allowed to threaten, harass, or publicly shame you. You have the right to order a debt collector to stop contacting you, and they must comply. If there's a mistake, and you really don't owe the debt, you can take steps to remedy the error.
How do you outsmart a debt collector? ›
You can outsmart debt collectors by following these tips:
- Keep a record of all communication with debt collectors.
- Send a Debt Validation Letter and force them to verify your debt.
- Write a cease and desist letter.
- Explain the debt is not legitimate.
- Review your credit reports.
- Explain that you cannot afford to pay.
Lack of current information on debtors. Difficulty identifying and contacting debtors. Difficulty in accessing the most valuable information. Takes too long to locate debtors when sorting through all the data.
What are the three things debt collectors need to prove? ›
Similarly, a debt collector must prove the following facts to win their case in court:
- The debt collection agency owns your debt and has the legal right to sue.
- You owe the debt.
- The amount they claim you owe is accurate.
Top 7 Debt Collector Scare Tactics
- Excessive Amount of Calls. ...
- Threatening Wage Garnishment. ...
- Stating You Have a Deadline. ...
- Collecting Old Debts. ...
- Pushing You to Pay Your Debt to “Improve Your Credit Score” ...
- Stating They “Do Not Need to Prove Your Debt Exists” ...
- Sharing Your Debt With Family and Friends.
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
What two debts Cannot be erased? ›
While the specifics vary somewhat among the different chapters, the most common examples of non-dischargeable debts are: Alimony and child support. Certain unpaid taxes, such as tax liens. However, some federal, state, and local taxes may be eligible for discharge if they date back several years.
