Debt collection laws protect you from unfair debt collection practices. Under federal and state laws, debt collectors must follow certain rules, and you also have certain rights. If you have collectors contacting you, consider the main debt collection laws.
Our guide gives you an overview of your rights and the rules that debt collectors must follow.
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What debt collection laws should I know?
There are some key debt collection laws that can help protect you and your credit score. These are the main laws you should know:
Fair Debt Collection Practices Act (FDCPA)
The FDCPA specifically describes what debt collectors can and cannot do. By law, there are rules they must follow and certain tactics they cannot use, such as being deceptive or abusive. There are also certain times when they can and cannot call you. the FDCPA It covers debts such as credit cards, mortgages and medical bills.
Fair Credit Reporting Act (FCRA)
Thanks to the FCRA, you are legally allowed to know what is in your credit report and dispute any errors. By having an accurate credit report, lenders, employers and insurance companies have a clearer idea of your creditworthiness.
State laws Most states have debt collection laws similar to federal ones. Some also have unfair and deceptive acts and practices that may include laws related to debt collection. Although these laws vary, in general, they help regulate debt collection practices so that the consumer is not deceived or mistreated so that he pays more.
Can a debt collector call me at work?
According to the FDCPA, debt collectors cannot call you to inconvenient or unusual places, which may include your workplace. For example, hospitals, schools and restaurants are examples of workplaces that qualify.
No matter where you work, you have the right to tell the debt collector to stop calling you at work. You can tell them that because of the FDCPA, they cannot call you at your workplace. If they persist, you can file a complaint with the Federal Trade Commission or your state attorney general's office.
When can you call me a debt collector?
Under federal law, debt collectors cannot contact you at unreasonable times, they can only call you between 8 a.m. and 9 p.m. your local time If they call you after that time, it is a violation of the FDCPA.
A debt collection agency can contact you by phone, mail, fax or email. If you do not want a debt collector to contact you, or communicate with you in a certain way, you can tell them to stop or specify how you prefer to be contacted.
By law, they should end communication with you unless they inform you that their efforts are terminated or to inform you that the debt collector may invoke specific remedies for payment.
Who can a debt collector call?
Debt collectors can only discuss your debt with you, your spouse, your lawyer, your executor or your parents (if you are a minor), but you can call other family members or friends to look for it. By contacting those other people, they cannot say they are with a debt collection agency and cannot call that person a second time.
This is the type of information that debt collectors can receive from other people:
- Your adress
- His phone number
- His workplace
What can debt collectors say?
Debt collectors cannot say things about their debt that are abusive, misleading or lies. By law, you can request anything they say in writing, such as how much you owe and to whom, before making any payment.
This is what debt collectors cannot say or do:
- Harass you
- Threaten it with harm or violence
- Use profane language
- Misrepresent what you owe
- To falsely state that I could be arrested
- Call you repeatedly to bother you
- It collects fees and interest in addition to the actual amount owed, unless the agreement includes an additional accumulation of fees or interest.
- Take or threaten your property (unless it is legal, as in the case of a secured loan with your vehicle as collateral)
How much can debt collectors ask for?
A debt collector can only ask for the amount he owes, including outstanding fees, charges and unpaid interest, but cannot ask for more. Debt collectors must send you a written validation letter within five days that specifies how much you owe and to whom.
If you believe that a debt collector is asking for more than you really owe, send a letter stating and verifying that you do not owe that amount or request verification of the debt. You must send your response letter within 30 days of being contacted by a debt collector, or the amount originally declared is assumed to be true.
Can I ask the collector his name?
Yes, you can ask the debt collector for your name and the name of the company for which you are charging. If you are not given your name or if you think it is a suspicious company, request a debt verification letter. Within five days, they must send you a written notice with the details of the debt, including the name of the company and how much you owe.
What does a debt verification notice include?
A debt verification notice includes details about what you owe and to whom. Debt collectors are required to send it to you within five days after your initial contact.
This is what a debt verification notice must include:
- Amount of debt you owe
- Creditor's Name
- A statement that the debt is assumed to be valid unless you file a dispute within 30 days after the first contact
- A statement that if you dispute the debt or request more information within 30 days, the collector must verify the debt in writing by mail
- A statement that if you request information about the original creditor, you must receive it within 30 days
By law, you have the right not to communicate with debt collectors or pay the debt until it is verified.
Yes, you can ask a debt collector by phone or mail to stop contacting you and they should do so. You can officially declare in a letter of termination and withdrawal that you do not want the debt collector to contact you.
From that moment, they can only contact you to inform you that your efforts are ending or to tell you what the debt collector will do next.
If they do not stop contacting you, you can inform the debt collector of the Federal Trade Commission or the attorney general of your state.
What should I do if a debt collector violates debt collection laws?
If a debt collector violates any of the debt collection laws, you must file a complaint.
You can inform a debt collector at:
- The Federal Trade Commission
- The state attorney general
- Office of Consumer Financial Protection (CFPB)
- The Association of Credit and Collection Professionals
- The Better Business Bureau
How can I avoid scams?
Debt collectors are legally prohibited from engaging in unfair practices, but they must still consider suspicious tactics. You want to avoid scams that could harm you financially.
Understand the statute of limitations of your debt
Before continuing, make sure you understand whether the debt is something you legally owe or not. If the statute of limitations has passed, that is, how long a lender can collect that debt, then you are not legally obligated to pay it.
For example, a credit card debt may have an expiration term or it is too late for the defense to win in court if they sue it for it.
The statute of limitations depends on the type of debt and the state in which you live, or the state in your credit agreement. If you are not sure if you have the debt legally, be sure to request a debt validation letter.
You may also want to talk to a lawyer before making a decision about whether to pay. Paying even a portion of a debt can cause more harm than good, because it restarts the statute of limitations and allows the debt collector to sue you for payment.
No matter what, you should still respond to any debt collector who says he owes money. If you ignore a debt collector or a lawsuit, the debt collector could obtain a court ruling and garnish wages.
Understand what happens when you make a payment
Making a payment acts as a representation that you accept the debt as yours and make it more difficult to dispute it later.
If you make a payment of a debt that is prescribed, the payment can restart the statute of limitations and your debt is considered to be paid according to the state in which you reside. That is why it is essential to know your rights and verify the debt even before making a partial payment.
Know the signs of a scam
Recognize when a debt collector can be a scam to avoid paying something that is not yours or a debt that is outside the statute of limitations.
These are the main signs of a debt collection scam or practices that you should consider:
- You are not sent a complete debt validation letter with how much you owe and to whom you owe it
- They charge you additional fees and interest beyond what you owe
- Threaten to sue him for payment
- They tell you that you have to pay immediately (even by phone)
- They lie to you, like saying that if you pay a small amount, they will eliminate the rest of the debt.
- They look fake or dishonest
- They keep contacting you after you've asked them to stop
I need a lawyer?
A lawyer is not required when dealing with debt collectors, but they can help you in your situation so that you do not end up paying more than you owe or for a debt that is not even yours. A lawyer can also help you identify and dispute collection errors or other types of errors on your credit report that could be lowering your credit score.
Consider a lawyer if you feel you are swimming in debt, have debt collectors who call you and are not sure what to do, or have questions about your situation. Getting professional help can save you money and time in the long run.
How do debt collections affect my credit?
Debt collection can reduce your credit score because it is an overdue or never paid debt. The lenders want to see that you are a responsible borrower and if your debts have been collected, it means that you did not pay on time.
Paying debts, either through a collection agency or other means, can improve your score. You can reduce your debt utilization rate because you are using less of your available credit. You can also reduce your debt / income ratio, which is another factor in your credit score. Making timely payments and paying off your debt are great ways to repair your credit.
How can I navigate the debt collection laws?
You can investigate each law thoroughly to protect yourself and know your rights or seek professional help. Debt collection laws can be difficult to navigate, especially when you are not familiar with them. Professional help can relieve stress and clarify uncertainties if you have questions, especially if you feel that something is unfair or wrong.
Although the Lexington Law does not manage debt collection, they are a great resource for learning to navigate credit repair. Contact Lexington Law today to learn how credit repair can help you.