Strategies for Handling Collection Agents
The last thing you need when are you struggling with debt is unwanted attention from creditors. If you are already living with overwhelming debt, creditor harassment can quickly make a bad problem worse. The reality is that you almost certainly are aware that you are overdue on paying a debt that a collector is asking about. Still, creditors can be unrelenting in their efforts to make you pay money that you do not have.
There are means in which creditors and debt collectors are permitted to contact you about your debts. However, many times, these communications cross a legal threshold and become unlawful creditor harassment. You do not have to endure harassment, and there are several strategies available to you to assert your rights and stop the practice. Below, we cover your rights when dealing with creditors and how you can efficiently stop the worst of harassment.
How the Fair Debt Collection Practices Act Helps You
The Fair Debt Collection Practices Act, or FDCPA, is a federal law that dictates when and how creditors are permitted to communicate with you. FDCPA is designed to protect debtors from creditor harassment and predatory practices.
Unfortunately, many collection agents will attempt to circumvent FDCPA rules or defy them outright. Many debtors do not understand their rights, and debt collectors will make no effort to educate them.
FDCPA law stipulates that a debt collector cannot:
- Call you repeatedly or at inconvenient times. Many collection agents will resort to frequent phone calls, often from different numbers, to reach you and pressure you to pay off a debt. Sometimes, they will deliberately call at unreasonable hours – or call multiple times in a row – as a means of intimidation. It is unlawful for debt collectors to call you at any time before 8 AM or after 9 PM.
- Use abusive language, yell, or otherwise attempt to intimidate you. Some debt collectors will pursue an abrasive approach, using frequent profanities or screaming into the phone. They may resort to manipulative techniques, claiming you are a bad person for failing to pay your debt. Any abusive contact violates the law.
- Threaten to tell others about your debt or bother loved ones or colleagues. A frustratingly common technique used by debt collectors is to claim they will publicize the fact that you owe a debt. This, in and of itself, is unlawful, as collection agents are not allowed to publish lists of debtors and their obligations. They might also threaten to call your friends, family, and employer and inform them of the debt. While collection agents can contact these third parties to confirm personal information about the debtor – say, their current phone number or address – they cannot say they are trying to collect a debt without violating the law. Debt collectors are only able to report unpaid debts to credit reporting agencies – no one else.
- Call you at work if you ask them to stop.Because there is a limited window in which debt collectors are lawfully permitted to call you, many will attempt to do so while you are on the clock. There is nothing inherently illegal about this practice until it continues after you ask them to stop. Once you have made it clear that you cannot take personal calls at work, collection agents cannot continue to attempt to contact you during work hours without breaking the law.
- Conceal their identity.You have a right to know who is calling and asking about a debt. You also have a right to know who currently controls your debt; when debts become seriously delinquent, they are often sold off by the original lender to collection agencies who then aggressively pursue payment. A creditor must identify themselves and the entity that they work for when asked.
- Misrepresent their affiliation. Because debt collectors are attempting to convince you to pay by any means necessary, some will resort to claiming to be someone they are not. Creditors might insinuate that they work for the United States government or are a licensed attorney, for example, hoping that perception of authority might compel you to pay sooner. Collection agents may not claim to be or be affiliated with someone they are not.
- Misrepresent the amount you owe. Especially unscrupulous debt collectors will sometimes inflate the amount that is actually owed on a debt in an attempt to further profit. Doing so is patently illegal, but some debtors may not realize what they actually owe once interest and other penalties are factored in and inadvertently pay more than what is obligated. You have a right to audit the extent of the debt, which we will cover in more detail below.
- Threaten an action they cannot legally take. A common strategy for debt collectors is to threaten a debtor with a lawsuit if they continue to fail to repay a debt. Should a collection agent win that lawsuit, they will likely be authorized to garnish the debtor’s wages. In theory, explaining this to a debtor is not inherently unlawful. However, there are situations where a creditor may not be able to pursue legal action, including when the statute of limitations on a debt has expired. In these instances, a creditor cannot threaten to do something they cannot legally do. They also cannot exaggerate the extent of the legal options they do have, such as claiming a lawsuit will result in a debtor losing their home.
As you can see, FDCPA protections are exhaustive and drastically limit what actions creditors can take. That may not step collection agents from attempting unlawful acts, but there are easy strategies that can quickly put a stop to bad creditor behavior.
Asserting Your FDCPA Rights
If a debt collector is harassing you or otherwise engaging in illegal conduct, you should consider taking steps to assert your rights under FDCPA law. In order to properly do so, you should keep careful written records suspected unlawful behavior. This includes when creditors call, the name of whom you spoke to (remember, they are required to truthfully identify themselves), the name of the collection agency they work for, and the specifics of what you believe was illicit conduct.
Often, simply acknowledging FDCPA and that you are aware of your rights will compel many debt collectors to stop. You can explain that you know you have a right to file complaints with the Consumer Financial Protection Bureau and Better Business Bureau. If necessary and if you are so inclined, you can threaten to file a civil lawsuit against the creditor for their continued violations. A successful civil suit can net you up to $1,000 in damages, though it will not absolve you of the underlying debt.
Beyond that, debt collectors are required to stop calling you or attempting in-person visits if you ask them to stop. Instead, you may request that all communications regarding an outstanding debt be made in writing. From then on, any creditor who calls you or makes an in-person visit to ask about a debt is violating the law.
You have another tool in your arsenal under FDCPA when combatting creditors. Debtors have a legal right to request that a debt collector validate the unpaid being debt. In layman’s terms, a collection agent must prove that a debtor actually owes the debt and that they have the right to collect it.
As we mentioned above, collection agencies will purchase delinquent debts from the original lending institutions. Sometimes, debts can change multiple hands with several transfers of ownership. As a debtor, it can be difficult to understand who currently owns your debt and therefore to whom you owe payment.
Creditors are required by law to send you a debt validation notice, in writing, within 5 days of their initial contact with you. This notice should lay out the amount that is allegedly owed and to whom it is owed to. It should also state that you have the right to dispute the debt within 30 days of your receiving the notice. If you choose not to dispute the debt within 30 days, the creditor has the legal right to assume you owe the debt and can thus continue pursuing repayment.
To protect yourself as a debtor, you should always request proof for the validation of a debt, even if you know you owe money. This request must be made in writing, and using certified mail is recommended to prove that you sent the notice within the 30-day time limit. The collection agency must then produce hard evidence that it acquired or was assigned your debt from the original lending institution. If the debt changed hands multiple times, this requires producing proof of multiple transfers of ownership.
Some collection agencies do not keep thorough or organized records and will therefore be unable to produce the evidence required to prove they own the debt. If they cannot do so, they can no longer contact you about payment for the debt; they also cannot report your nonpayment to credit reporting agencies. Even if they are able to produce the necessary evidence, debt collectors cannot continue to contact you about payment until the validation has been completed.
If a debt collector is unable to validate a debt but still contacts you about repaying it, they are breaking the law under FDCPA. Furthermore, should they attempt to report nonpayment to a credit reporting bureau, you can easily dispute the item without a costly legal process. Simply make a copy of your debt validation request letter, along with evidence that it was sent in the appropriate timeframe, and the credit bureau should remove the debt once it cannot verify it with the creditor.
Why Dismissing Creditors Is Not Enough
With all of the FDCPA tools at your disposal, you might think you are in the clear when you take steps to limit how creditors can contact you. While blunting the worst of creditor harassment is important, you must understand that doing so does not address the underlying debt. So long as that debt exists, and an entity can verify that they own it, you run the risk of being sued by a debtor.
As we briefly mentioned above, losing a lawsuit from a debtor can subject your paycheck to wage garnishment. Unfortunately, a creditor might be more emboldened to consider legal action if you exercise your rights under FDCPA, including asking them to only communicate with you in writing.
While validating that a collection agent owns your debt does buy you time and can even result in learning that the calling creditor does not own your debt, it does not take you completely off the hook. It only means that that particular debt collector can no longer contact you due to their not owning the debt; therefore, you likely have avoided a scam. Another collection agent that legitimately owns the debt could appear: The debt itself does not disappear, even if it does get lost in bureaucracy.
Addressing Underlying Debts Through Bankruptcy
Chances are you would not be struggling to manage creditor harassment if you had the means of repaying the debts that they are calling about. Since you do not have the funds to address the debt itself, you will likely need to consider alternative forms of relief.
One of the most powerful financial tools available to you is the institution of bankruptcy. As a consumer, you will likely qualify for either Chapter 7 bankruptcy or Chapter 13 bankruptcy depending on your current monthly level of disposable income. In a Chapter 7 bankruptcy, nonexempt assets will be liquidated to partially repay debts. For Chapter 13 bankruptcy, you will pay a court-ordered monthly amount for several years to directly compensate creditors.
Successfully completing either type of filing generally entitles you to discharge unsecured debts, including medical debt, credit card bills, unpaid utility bills, and personal loans. Note that you will not be able to discharge secured loans (like missed automobile loans or mortgage payments), tax debt, or student loans. However, strategic use of the time and resources that bankruptcy can affords you can help you catch up on loans that you cannot directly discharge.
Filing for either type of consumer bankruptcy also entitles you to the automatic stay, a court order that forbids creditors from contacting you. As soon as you file, debt collectors will be unable to write, call, or visit you, regardless of any previous steps you have taken or not taken through exercising your FDCPA rights. The automatic stay also prevents any collection actions from occurring, meaning any pending lawsuits, foreclosures, wage garnishments, or repossessions cannot proceed. This moratorium continues until your filing has concluded.
We Can Help You Conquer Debt Through Bankruptcy
No one should have to spend their days fielding abusive calls or mountains of letters from creditors. At Dethlefs Pykosh & Murphy, our team wants to help you address your underlying debt and build a more sustainable financial future. If you are currently experiencing harassment from creditors, we can help you understand your rights under FDCPA and work to efficiently nullify abusive efforts to make you repay. From there, our bankruptcy attorneys can consider whether filing makes sense for you and walk you through how the process works.
If you want to put a permanent end to debt and creditor harassment, call (717) 559-0271 or contact us online to learn more about how we can help.