U.S. Debt Collection 101

You are spending time with loved ones. The phone rings. You glance at the caller ID. You ignore the call. You look up to questioning and expectant faces. You swallow hard, shrugging your shoulders as you tell a lie, “Wrong number.” It was no wrong number. It was the dreaded debt collector. Now, rather than run and hide, educate yourself. You have rights. At least, in the United States you do. These are the rights of debtors who reside in America. By knowing these rights you can actually turn the tables on the debt collector bullies. The Fair Debt Collection Practices Act (FDCPA) is for all the people who owe money and could not even sit down and enjoy their dinner in peace.

  • If you get a debt collection call and they start talking arrest and incarceration, they are violating the law. The only time that’s a concern is if you actually get a court summons that you ignore. Child support and taxes are the only serious debts that will land you in jail quickly. If the debt collection call is about an unpaid credit card bill and they bring up the dreaded word “jail”, threaten to file a complaint against them for violating the federal law outlined in the FDCPA
  • If you get an open postcard, open to any of the viewing public, regarding debt collection, the law has just been broken. The privacy of your debt information is protected by law. Debt collectors cannot publish this information or even allude to it by asking thirds parties, like friends, families or co-workers, for information about you. The only question they can ask other people is for your contact information and they are only allowed to bother them once where that is concerned.
  • It is against the law for you to be hassled for money you don’t legitimately owe. You will probably get a letter demanding payment and allowing you a discretionary period to deny responsibility. Write them a letter explaining their mistake and the burden is then upon the agency to verify the truth of the claim.
  • Illegal harassment of debt collectors is described as: threats of violence or harm; obscene or profane language; repeated telephone calls; telephone calls between the hours of 9pm-8am; telephone calls at place of employment; any contact at all if you have told them to stop contacting you. You have the right to be left alone. However, they may step it up a notch and file a lawsuit if the debt is a whopper and legitimately owed.

If you receive a court summons to a debt collection lawsuit, consider the possibility that it is a forgery. Look up the address and contact information of the court listed on the summons. Do not use the contact information on the paper you received. It could be a forged summons with decoy contact information that relays you right back to the debt collectors posing as court officials. So, go to the horse’s mouth and determine if the summons is legit.

A key factor about the protections afforded to consumers by the FDCPA is that these regulations only apply to non-original debt collectors. The original company that you incurred the debt with can call as much as they like to collect. However, once they sell your delinquent debt to another agency, new rules apply that are in your favor.

And, be proactive. Keep documentation of everything: the times, duration and tenor of all phone calls, copies of all correspondence, copies of every bill and statement. Pay attention to the time guidelines. This is how it could go:

  • Debt collector calls you and you speak with them
  • They now have five days to provide you with a statement of your debt.
  • If the statement does not arrive within five days of original phone call, game over for debt collector. You can now tell them if they contact you again you will file harassment charges.

If calls continue, demand their contact information for written correspondence. Compose a cease and desist letter demanding they stop contacting you and send it via certified mail, return receipt requested.

If you legitimately owe the debt and are interested in repaying it, many companies will negotiate a reduced balance. However, stay in the driver’s seat. They will make offers but stick with your own parameters. Offer to pay ten or fifteen percent of what you owe them and don’t back down. Chances are, they will take it. Remember, they bought your debt for pennies on the dollar. They will be happy to get anything.