Knowledge is Defense Against Illegal Debt Collection Practices
Debt collection practices can be so out of line that they disrupt your entire life and prevent you from being able to go about your day. Therefore, it's important that you gather knowledge about debt and debt collection.
You need to know which practices are legal and fair and which practices are unlawful. You also need to know what to do to stop any unfair practices that might be going on. The following is some information about legal and illegal debt collection practices. It will help to arm you to deal with debt collection agencies and assist you in terms of fighting such practices. You'll also receive information on restoring your credit score and minimizing your debt so that you can one day live free of it.
What Debtors Have a Right to Do
The first thing you need to understand is that debtors do have some rights. They have a right to talk to you about your account. They have a right to collect money from you if you owe them money, as well. In most cases, you signed a paper or digital agreement for the money, which included a promise to repay it along with finance charges, interest payments, and the like. Therefore, your creditors can take certain steps and use certain information to collect the owed debt.
However, some laws prevent debt collectors from using illegal practices. You can find most of those laws in the Fair Debt Collection Practices Act. The act came into play in 1977 as a way to protect consumers from abusive and destructive debt collection practices. You can also visit the Federal Trade Commission for additional information.
Examples of Illegal Debt Collection Practices
As we mentioned, some practices in which debt collectors engage are completely allowable and legal. However, they must follow the Fair Debt Collection Practices Act's rules and must not violate debtors. The following are 10 of the most common illegal practices that debt collectors engage in these days. Look through them to see if a debt collector may be violating you and your loved ones using one of these tactics. We'll explain what you can do to stop it later in the text.
1. Falsifying One's Identity
One common illegal practice that debt collectors use is to falsify their identity. For example, they may call and present themselves as a friend or long-lost relative of yours. They may also use a fake company's name and announce themselves as a representative of that company. In some cases, debt collectors pretend to be law enforcement officers or other legal figures to try to scare you into giving them money. This practice is quite fraudulent, and you have the right to report it if it happens to you. Debt collectors must clearly state who they are, and they must state the intention of the phone call.
2. Calling Outside Allowable Hours
Many debt collectors also break the time rules by contacting debtors outside the legally allowable calling times. The Fair Debt Collection Practices Act says that debt collectors may not contact debtors before 8 a.m. They may not contact debtors after 9 p.m. either. They are allowed to make reasonable phone calls within those hours. Any time outside of the stated hours is a violation of the Fair Debt Collection Practices Act, which you also have the right to report. The time rules are some of the most commonly broken rules of all illegal debt collection practices.
3. Making Threats
Debt collectors are allowed to talk to you about your account once they make clear who they are, and they verify your identity. They are allowed to ask you when you intend to pay your debt, and they are allowed to make payment arrangements with you if you're willing to do so. At no time are threats acceptable during a debt collection attempt. Threats to your life, well-being, job, freedom, or anything else are serious offenses you can discuss with an attorney. Document the time of the phone call and the date they were made to have some evidence to take to the appropriate person.
4. Contacting Uninvolved Third Parties
Debt collectors are only supposed to talk to you about your debt. They have the right to contact your references if you gave them the numbers to some references when you completed the application. This is a common practice with products such as title loans.
However, they are not allowed to call your job, friends, relatives, and other individuals about your debt if you have not permitted them to do so. Even if you did offer the permission, they are still limited in the matters they can discuss. They can ask for contact information to get in touch with you, and they can ask the other individual to pass a message to you. They cannot go into a great deal about your debt and how much you owe. Furthermore, they cannot ask a third party to pay your debt.
5. Using Foul Language
Foul language is in the same category as threats and is not tolerated under any circumstances. It would be quite disrespectful for a debt collector to berate you or use words that society views as cuss words. You can report this type of behavior and take steps to have the debt collector cease it if you desire.
6. Harassment
Yelling profanities at a debtor is a form of harassment. Berating and belittling a debtor is also harassing. Making repetitive phone calls is a form of harassment, as well. No form of harassment is acceptable from a debt collector. You might have the right to sue the debt collector if it victimized you with harassing tactics.
7. Lying About Owed Amounts
A debt collector cannot be dishonest with you about the amounts you owe. This is a huge violation that may be considered a form of fraud. You have every right to report such activity to the appropriate authorities.
8. Discussing Your Account With Other People
As mentioned before, debt collectors have limits to what they can discuss and who they can discuss it with. It is not okay for a debt collector to talk to another person about your debt unless you share it with that person. An example might be a joint loan or credit card. In that case, the debtor could legally call either one of the debtors and discuss the amount owed.
9. Threatening You to Make a Postdated Check
A debt collector cannot threaten you with criminal prosecution if you refuse to offer them a postdated check. You have the right to offer a postdated check if you want to, but nothing obligates you to do so. That choice is yours alone.
10. Depositing a Postdated Check Early
If you offer the debt collector a postdated check, the debt collector cannot cash the post-dated check early. Doing so could cause you to suffer additional financial damages, and you would have the legal resources to do something about it.
Review All Your Current Debts in One Place. Join Debtry.
What to Do About Illegal Debt Collection Practices
Sometimes, it's difficult to know exactly what you should do if you fall victim to illegal debt collection practices. These are a few things you can do if you get tired of harassing or unlawful communications. One of these might be an acceptable solution for you.
1. Work Things out With the Creditor
You could always stop creditor harassment by agreeing to work something out with the creditor. Maybe you can make a small payment to the creditor and make small monthly payments for an extended time until you clear the debt. You could also bargain with the creditor and ask them to agree to a debt settlement. In a debt settlement debt elimination deal, the creditor agrees to allow the debtor to eliminate the debt for a one-time payment of a percentage of the balance. Many people have successful debt settlements with the companies they owe. This might work for you if you know you owe the debt and you want to stop the calls.
2. File for Bankruptcy
Bankruptcy is another option you could take if you aren't in a position to repay your debts. A Chapter 7 bankruptcy filing could have all of your debts discharged. However, it may not be right for you if you don't want to have your credit score drop for seven years or longer. Furthermore, it costs money to file for bankruptcy. You will need to pay attorney's fees and filing fees. You could finance your attorney's fees in a Chapter 13 bankruptcy, but you'll have to develop a repayment plan and repay some of your debts, as well. The positive aspect of filing for bankruptcy is that it will immediately stop all legal and illegal debt collection practices.
3. Write a Cease and Desist Letter
You can write an official cease and desist letter that notifies the debtor of the unlawful communication. You should notate the dates and times the debt collector engaged in illegal practices. Make it clear that you no longer wish to receive any communications from the debt collector, and send the letter by registered mail so that you can document proof of its receipt.
4. Complain to the Federal Trade Commission
The Federal Trade Commission is a governmental agency that was set up to protect consumers' rights. You can report illegal debt collection practices to the FTC at any time. They have a special fraud report page that you can use to complain about illegal debt collection practices and other fraud types that affect your credit or livelihood.
5. Sue the Debt Collection Agency
You can sue the debt collector for harassment if you so desire. You can collect up to $1,000 in attorney's fees and damages. To do this, you need to hire an attorney who specializes in helping debtors win in cases like this. You can schedule a consultation to discuss the matter at any time.
Tips for Cleaning up Your Debt
The best way to ensure that you don't have to deal with illegal debt collection practices is to manage your debt. These are some tips on managing your debt and finding your path to debt free living in the future.
This may seem like redundant advice, but you need to pay down your debts if you want to avoid debt collectors. You should implement practices that will help you remember to pay your debts on time and avoid those unwanted calls. Calendar applications and bill payment applications can help you stay informed about upcoming payments you need to make.
It may also be a good idea for you to order a copy of your current credit report. The credit report may have information on it that's inaccurate and out of date. One thing you need to look for is accounts that have passed the statute of limitations. A debt collector must not make any attempts to collect debts that are over seven years old in most cases. There are some exceptions to the rule, but it's true in most situations. You can contact the credit bureau and request they remove accounts that are over the seven-year period.
A debt consolidation can help you organize your debt and save money. It can also keep creditors away from you. You can apply for a debt consolidation if your credit score is still decent. Upon approval, your debt consolidation loan will pay off all your outstanding debts. You will then only have one creditor to pay. Your interest rate will likely be much better than the one you had on the various other accounts. That will help you to save money as you repay the debts you owe.
A debt management plan is something else you might want to try. It's a way of consolidating your debt without applying for a loan to do so. A debt management company is a third-party company that can provide various services to you to help you manage your debt. Your counselor can negotiate with creditors on your behalf to get some of your balances down. That person can also create a monthly payment plan for you that indirectly merges your accounts.
You'll give that amount to the counselor each month, and he or she will ensure that all of your debts are paid. Generally, debt management clients see a huge improvement in their credit scores over five years. Those clients also never have to deal with debt collectors because their counselors do all the talking.
You may have to pick up some extra work to make a larger dent in your debt. Even a part-time job can provide you with extra funds that you can use to shrink your overall balance. You can keep it all in one place and ask your current boss for additional hours. Alternatively, you can find a part-time job out in the world or look for an online position that provides you with work and income. Use the money from that job to pay extra toward your debts to get them down faster. You'll be glad you took those proactive steps.
Contact Us for Additional Information
You should now have adequate knowledge of debt collection practices and what's correct and incorrect. We are here for you if you have any additional questions, comments or concerns. We advocate for all debtors to help manage their personal finances and take control of their profiles. We specialize in connecting people with the tools they need. We are not lenders, but we can connect you with many fine lenders, educators, and information that will help you to rise above a poor credit score or personal finance needs. Feel free to connect with us at any time.
Take advantage of our new Goalry Mall to find additional information about debt collection and debt management. The signup process is straightforward and fast. All you need to do is request a member ID, and the ID will allow you access to all parts of the mall. You can shop in the Debtry section to find help for your debts. You may also visit sections such as the Creditry store, Insury store, and more. You'll be pleased with its ease of use and an endless supply of helpful information.
You may also take advantage of our new Goalry Mall system. It's an application we developed to give you faster access to connect to the products and services you need for personal finance. The Goalry Mall is set up like a shopping mall with a smorgasbord of stores where you can connect with lenders, speak to people with common interests, or learn information on any personal finance topic you need. We wanted to provide our visitors with self-service options that would be stress-free and easy to follow. The Goalry Mall can do that, and it's available to you today.