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Dealing With Debt Collectors

HandelontheLaw.com Staff Writer

Monday, January 13, 2014



Dealing With Debt Collectors
Debt Collectors

Ah, credit, credit, credit: what a wonderful/terrible invention. Credit funded a good portion of the American Revolution, financed the higher education of millions of Americans and empowered otherwise ineligible homebuyers. Credit – or the abuse of it by lenders and borrowers - has also crippled millions of American consumers. If you have credit problems, particularly with debt collections, your problems not new and you are certainly not alone.

Nearly 40 years ago (in 1977) and in response to unfair debt collection practices, the U. S. Congress passed the “Fair Debt Collection Practices Act.” This Act and its amendments work to “level the playing field” between debtors. The Act requires certain behavior by creditors.

First, the creditor’s first communication with the debtor must indicate that any information the creditor obtains will be used to collect the debt and every communication with the debtor must clearly indicate that it is from a debt collector.

Second, if the debtor gives a written request for the original creditor’s identity within the 30-day debt verification period, the creditor must provide the original creditor’s name and address.

Third, the creditor must advise the debtor of his/her right to dispute the debt or any part of it.

Fourth, if the debtor sends a written request for verification and/or dispute of the debt within the 30-day debt verification period, the creditor must both give written verification of at least the debt amount and the original creditor and report the fact that the debt is disputed to any credit bureau that lists the debt.

Fifth, if the creditor sues, he/she/it must sue in the venue where the debtor lives or the contract was signed.

The Act also forbids certain “abuse and deceptive” behavior by creditors.

First, creditors may contact debtors by telephone only between the hours of 8:00AM – 9:00PM according to the debtor’s local time.

Second, if the debtor delivers written notice to the creditor to stop contacting the debtor, then the creditor must not contact the debtor in any way except communications that the creditor intends to stop collection attempts or intends to pursue other legal remedies (such as a suit) or actually sues the debtor.

Third, the creditor may not repeatedly call a phone number to annoy, abuse or harass.

Fourth, if the creditor is advised or has reason to know that the debtor’s employer prohibits collection calls at work, the creditor must stop calling the debtor’s workplace.

Fifth, if the creditor knows or has reason to know that the debtor is represented by an attorney, the creditor may not contact the debtor directly.

Sixth, if the debtor makes a written request for verification of the debt or for the name/address of the original creditor within a 30-day validation period, the creditor may not contact the debtor between receipt of the request and mailing of the information to the debtor.

Seventh, the creditor may not use any misrepresentation or deceit.

Eighth, the creditor may not publish the debtor’s name or address on a list of bad debts.

Ninth, the creditor may not seek any amounts over and above amounts allowed by law.

Tenth, the creditor may not make false threats of arrest or legal action against the debtor.

Eleventh, the creditor may not use abusive language, including cursing, toward the debtor.

Twelfth, the creditor may not discuss the debt with anyone other than the debtor, his/her spouse or his/her attorney (though they may contact neighbors/coworkers to locate the debtor).

Thirteenth, the creditor may not use “embarrassing media” such as envelopes indicating that the communication is about a debt.

Fourteenth, the creditor may not report or threaten to report false information on the debtor’s credit report.

What, then, are some steps that a debtor can take to protect himself/herself under the “Fair Debt Collection Practices Act” and otherwise?

First, keep records of your debts and payments on debts for at least 7 years.

Second, negotiating with the original creditor for payment arrangements might sidestep debt collection calls altogether, so try to negotiate before the situation gets to third-party debt collection.

Third, with the first communication by the creditor, send a written demand for verification of the debt and the original creditor’s name and address.

Fourth, send any communications to the creditor by certified mail, return receipt requested.

Fifth, keep records of all correspondence with creditors.

Sixth, if you reach an agreement for payment of the debt, insist on having it in writing and keep that document, as well.

Seventh, if you make payments on the debt, use a personal check only if it comes from a separate account you’ve set up to pay the collector, or use your financial institution’s online bill pay service. Ask your credit union or bank for details.

Eighth, if you are sued, hire a lawyer who specializes in Consumer Law or Debt Collections. Many creditors bring suits with little or no proof of the actual debt and/or after the statute of limitations has expired and you can win the suit with an experienced attorney who can prove those deficiencies.

Ninth, if the creditor violates any provision of the “Fair Debt Collection Practices Act,” file a complaint with the Federal Trade Commission here https://www.ftccomplaintassistant.gov/#&panel1-3, and with your state’s Attorney General, who you will find here http://www.naag.org/current-attorneys-general.php, and with the Association of Credit and Collection Professionals here http://www.acainternational.org/about-file-an-ethics-complaint-209.aspx

Tenth, file your own suit against the creditor within 1 year of the violation. An experienced Consumer Law lawyer or Debt Collection lawyer can advise you of the requirements and damages but the rule of thumb is that a successful plaintiff (you) may be awarded damages for losses caused by the violations, attorney’s fees and court costs, and up to $1,000.00 in statutory damages.



DO’S AND DON’TS

DON’T be intimidated by the process or the people.

DO keep records of your debts and payments on debts for at least 7 years.

DO try to negotiate with the original creditor.

DO send a written demand for verification of the debt and the original creditor’s name and address.

DO send any communications to the creditor by certified mail, return receipt requested.

DO keep records of all correspondence with creditors.

DO insist on having any payment arrangements in writing.

DON’T use your personal accounts to make payments. Use a personal check only if it comes from a separate account you’ve set up to pay the collector, or use your financial institution’s online bill pay service.

DO hire a lawyer who specializes in Consumer Law or Debt Collections if you are sued.

DO file the following complaints against a creditor who violates the “Fair Debt Collection Practices Act”:
a. with the FTC here https://www.ftccomplaintassistant.gov/#&panel1-3
b. with your state’s Attorney General, found here http://www.naag.org/current-attorneys-general.php
c. with the Association of Credit and Collection Professionals here http://www.acainternational.org/about-file-an-ethics-complaint-209.aspx

DO file your own suit against the creditor within 1 year of the violation.


By Kathy Catanzarite

[Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information cannot be guaranteed. Readers act on this information solely at their own risk. Neither HandelontheLaw.com, or any of its affiliates, shall have any liability stemming from this article.]


Source: Handelonthelaw.com Staff Writer

Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information can not be guaranteed. Readers act on this information solely at their own risk. Neither the author, handelonthelaw.com, or any of its affiliates shall have any liability stemming from this article.





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