If you are drowning in debt and receiving daily phone calls from at least one debt collector, it’s important that you know your rights. Thanks to the Fair Debt Collection Practices Act (FDCPA), there are laws designed to protect you from that unwanted communication.
What collectors can’t do
The FDCPA spells out several things debt collectors are prohibited from doing. For example, they cannot call you before 8 AM or after 9 PM or call you multiple times a day. In addition, they are not to call you at work without your permission. The collector is also not to discuss your debt with friends or family members and is prevented from misrepresenting the status of a debt or claiming to be affiliated with some governmental entity.
How to stop those harassing phone calls
According to the FDCPA, you can stop phone calls by sending the debt collector a cease and desist letter. This letter communicates to the debt collector that he or she is not to contact you anymore. You need to send your letter registered mail and return receipt requested so you can prove that it was received.
What collectors can do
Once the collector receives this letter, they can only reach out to inform you that they will not be contacting you anymore or to notify you that they plan on taking legal action, such as starting a lawsuit against you.
If they contact you for any other reason, you can report it to your state’s attorney general’s office or to the Better Business Bureau. And if the harassment continues, you could hire an attorney and try filing a lawsuit against the collection agency. However, this can be difficult as many agencies are headquartered offshore.
People Also Read
Debt Relief
Mastering Credit Management: Your Key to Unlocking a World of Financial Opportunities
Debt Relief
Can debt collectors and loan companies call your employer?
The worst thing they can do
Let’s suppose you owe $5,000 to a credit card company that has sold your debt to a collection agency. The agency may have paid less than $100 for the debt but that doesn’t change the fact that you still owe $5,000. If you fail to pay it off, the collection agency could file a suit. If you were to fail to show up for your court date, the debt collector could get a summary judgment. If you make an appearance, the collector might still get a judgment.
Once the agency has a judgment, they may be able to put a lien on your home. If you were to ever sell the home, that $5,000 would come off the top. In other words, if you thought you had $10,000 in equity, you would end up getting only $5,000 while the collection agency received the other $5,000. This makes it a lot more challenging to sell your home since you would have to deal with this first.
Bankruptcy or debt settlement?
Bankruptcy or debt settlement could be better options than letting a debt collection agency get a judgment and put a lien on your house. A Chapter 7 bankruptcy would discharge most of your unsecured debts including personal loans, lines of credit, medical and credit card debts.
Many people choose debt settlement instead of filing for bankruptcy as an alternative to bankruptcy. A debt settlement firm can negotiate settlements to reduce the debt amount on your unsecured debts.
Legitimate debt settlement companies
Keep in mind that a legitimate debt settlement company will not require any payments upfront. It is actually illegal! The money you send them should be deposited into an FDIC- insured trust that only you can manage. You will pay nothing until and if the company successfully settles your debt and provides you with a payment plan you approve.
If a debt collector oversteps their bounds, report them immediately. But the best way to make them go away is by resolving your debt.
Content Disclaimer:
The content provided is intended for informational purposes only. Estimates or statements contained within may be based on prior results or from third parties. The views expressed in these materials are those of the author and may not reflect the view of National Debt Relief. We make no guarantees that the information contained on this site will be accurate or applicable and results may vary depending on individual situations. Contact a financial and/or tax professional regarding your specific financial and tax situation. Please visit our terms of service for full terms governing the use this site.
FAQs
For example, they cannot call 20 times in a row or let the phone ring indefinitely. They also cannot call you names, use obscene language, or threaten you with imprisonment or physical violence. The FDCPA places certain restrictions on written communication as well.
What's the worst a debt collector can do? ›
Debt collectors are limited on when they can call you — typically, between 8 a.m. and 9 p.m. They are not allowed to call you at work. They can't lie or harass you. Debt collectors can't make you pay more than you owe or threaten you with arrest, jail time, property liens or wage garnishment if you don't pay.
What to say and not to say to a debt collector? ›
Don't give a collector any personal financial information. Don't make a "good faith" payment, promise to pay, or admit the debt is valid. You don't want to make it easier for the collector to get access to your money, or do anything that might revive the statute of limitations.
What debt collectors don't want you to know? ›
Debt collectors don't want you to know that you can make them stop calling, they can't do most of what they tell you, payment deadlines are phony, threats are inflated, and they can't find out how much you have in the bank. Furthermore, if you're out of state, they may have no legal recourse to collect.
What is the 11 word phrase to stop debt collectors? ›
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
Why should you never pay a debt collector? ›
Paying an old collection debt can actually lower your credit score temporarily. That's because it re-ages the account, making it more recent again. This can hurt more than help in the short term. Even after it's paid, the negative status of “paid collection” will continue damaging your score for years.
How do I get rid of debt collectors without paying? ›
Once you notify the debt collector in writing that you dispute the debt, as long as it is within 30 days of receiving a validation notice, the debt collector must stop trying to collect the debt until they've provided you with verification in response to your dispute.
How to outsmart a debt collector? ›
You can outsmart debt collectors by following these tips:
- Keep a record of all communication with debt collectors.
- Send a Debt Validation Letter and force them to verify your debt.
- Write a cease and desist letter.
- Explain the debt is not legitimate.
- Review your credit reports.
- Explain that you cannot afford to pay.
Under federal law you have the right to ask a debt collector to stop contacting you. It's best to put this request in writing, either by mail or by fax. “They can still sue if they want,” warns Howard.
What not to give debt collectors? ›
You never want to give the debt collector personal information about your finances and assets, such as your Social Security number, your bank account number unless making a payment, your income, or the value of your assets.
One of the most rigorous rules in their favor is the 7-in-7 rule. This rule states that a creditor must not contact the person who owes them money more than seven times within a 7-day period. Also, they must not contact the individual within seven days after engaging in a phone conversation about a particular debt.
Can debt collectors see your bank account? ›
Collection agencies can access your bank account, but only after a court judgment. A judgment, which typically follows a lawsuit, may permit a bank account or wage garnishment, meaning the collector can take money directly out of your account or from your wages to pay off your debt.
How do you win against a debt collector? ›
Here are a few suggestions that might work in your favor:
- Write a letter disputing the debt. You have 30 days after receiving a collection notice to dispute a debt in writing. ...
- Dispute the debt on your credit reports. ...
- Lodge a complaint. ...
- Respond to a lawsuit. ...
- Hire an attorney.
The legal loophole is the debtor has no right in law to know or enquire who ownes the debt which then makes the contractural relationship no longer transparent.
What are the illegal tactics of debt collectors? ›
They cannot swear, threaten to illegally harm you or your property, threaten you with illegal actions, or falsely threaten you with actions they do not intend to take. They also cannot make repeated calls over a short period to annoy or harass you. Debt collectors cannot make false or misleading statements.
What is debt trap in one word? ›
A debt trap means the inability to repay credit amount. It is a situation where the debtor could not be able to repay the credit amount.
What is the most a debt collector can do? ›
While debt collectors can't threaten you or mislead you, they can apply pressure to collect payment. This pressure can include daily calls, frequent letters, or talk about pursuing a lawsuit for payment on the debt — as long as they stay within the bounds of the law.
What is the lowest a debt collector will settle for? ›
Some will only settle for 75-80% of the total amount; others will settle for as a little as 33%. Looking for a place to set the bar? The American Fair Credit Counsel reports the average settlement amount is 48% of the balance. Again, start low, knowing the debt collector will start high.
What is a weakness as a debt collector? ›
Lack of current information on debtors. Difficulty identifying and contacting debtors. Difficulty in accessing the most valuable information. Takes too long to locate debtors when sorting through all the data.
What powers do debt collectors have? ›
While being pursued by a debt collection service can be uncomfortable, it's important to remember that they don't have any special legal powers. They're actions are limited to: Sending letters and emails. Calling you on the phone.
