Almost everyone begins life as an adult with little or no debt, with the possible exception of student loans. However, over time, people accumulate credit cards, borrow to buy cars, and get mortgages to buy houses. If you are lagging behind with your credit card or loan payments, especially if you are several months behind, you will often have to deal with debt collection agencies. It’s never a pleasant experience; In the recent past, however, collection agencies have been downright threatening. Thanks to laws like the Fair Collections Practices Act, borrowers who have gotten into tough times no longer have to deal with debt collection agency harassment tactics. Take a close look at this law so that you better understand how it can affect your situation.
The Law on Fair Collection Practices
Congress passed the Fair Collection Practices Act (FDCPA) in 1966 and amended it in 2006. The law applies to credit cards, mortgages, medical debts, and other types of personal or household debts. However, the law does not cover business debts or collections from the original creditor. The Fair Collection Practices Act limits what collection agencies can do when trying to collect consumer debt. In particular, this law protects borrowers from unsavory debt collection agencies who use harassment when dealing with borrowers. If you’ve defaulted on a mortgage or other type of personal debt and you expect to deal with debt collection agencies, here are a few things the law prohibits these agencies from doing.
1. Prohibition of contacting borrowers at inconvenient times and locations
The FDCPA prohibits debt collection agencies from contacting borrowers before 8 a.m. or after 9 p.m. If the collection agency knows that you can’t get a call at your place of work or place of business, they won’t be able to call you at that location.
2. No harassment
Debt collection agencies cannot bother consumers. They cannot threaten you or use abusive or profane language when discussing your debt. Also, you cannot harass or threaten others in the pursuit of your debt.
3. Dealing with your lawyer
If a collection agency knows that you have hired an attorney to assist you in solving your debt problem, the collection agency will need to deal with that attorney. If you’ve hired an attorney and a debt collection agency calls you, be sure to include your attorney’s contact information.
4. Termination of contact with debt collection agencies
If a consumer wants collection agencies to stop contacting them, they can do so. You need to prepare a written letter and send it to the debt collection agency stating that you do not want any further communications from that debt collection agency. While this limits the ability of the debt collection agency to contact a borrower, it can use other legal means in its attempt to collect the debt.
Dealing with a debt collection agency
If you are contacted by a collection agency, you should speak to the collector first to see if the matter can be resolved. This is true even if you believe you do not owe the debt or think you may be accidentally contacted. In other words, don’t just ignore that first call. If you believe the collector is correct, you can try to pay off the debt. If you think the debtor made a mistake, you can also request more information about the debt to help you figure out the best way to fix the problem. If you believe the collection agency is in violation of the FDCPA, you can report the company to your state’s attorney general and the Federal Trade Commission (FTC). In addition, some states have their own collection laws, and the Attorney General’s office can help you understand your rights in your state.
Other ways to deal with debt
While fair collections practices law can protect you from harassment from collection agencies, it cannot protect you from your debt. When you have a lot of credit card debt, you have to pay it off one way or another. Many families have chosen a technique called debt relief (or debt settlement) to get out of debt. To begin with, the person in need of debt relief contacts a debt relief company such as National Debt Relief to negotiate debt settlement on their behalf. National Debt Relief has a proven record of negotiating settlements with credit card companies that have reduced debt by 50% or more. Debt relief like this can have an impact on your creditworthiness, but it is usually short-term and is nowhere near as drastic as filing for bankruptcy.
If you like the idea of debt relief, be sure to visit the National Debt Relief website and fill out the free debt analysis form that you can find there. The company does not charge up-front fees, so you have nothing to lose – except maybe half your debt!