The Law Behind Collection Agencies

With today’s economy many people are faced with the hardship of paying overdue bills and making ends meet. Debt is a common term in America, and many people receive calls daily from collection agencies in an attempt to collect on outstanding accounts.

Many businesses hire third party debt collection agencies to help collect past due accounts. These agencies collect money on behalf of the company and generate revenue on a commission basis by getting people to pay on their overdue accounts. Trying to stop harassing phone calls from creditors can be a difficult task.

Congress realized this was a problem and passed the Fair Debt Collections Practices Act (FDCPA). This federal act sets limitations on behaviors both debt collection agencies and their debt collectors may and may not engage in while attempting to collect debt from consumers. Additionally, the act provides consumers who have been illegally harassed by debt collectors the right to sue for monetary and injunctive relief.

The collector must be an outside collection agency. The law applies to collection agencies or their representatives such as lawyers and not the original creditor.

Collectors working for debt collection agencies can be very forceful to their debtors while staying within the letters of the law. However, it is unlawful for them to make any form of threats like taking your home or property or tell you that you are going to jail, use profanity and abusive language or curse you out. These are all identified as a form harassment and you have all the right to go against a collector with these unjust practices. 

What To Know When Contacted By A Debt Collector

Below is a list of things to consider when being contacted by a debt collector:

  • Debt collectors cannot contact you before 8 a.m. or after 9 p.m.
  • Debt collectors cannot call you at work without your permission.
  • Debt collectors cannot call your friends or relatives to tell them to give you a message.
  • Does the collector notify you immediately that they are trying to collect a debt?
  • Does the collector try to give a false impression that they are affiliated with the Federal government or state?
  • Do they threaten arrest, seizure, repossession, etc.?
  • Does the collector use abusive or profane language?
  • Does the collector refuse to disclose their identity?
  • Do they continue to call you after they know you are represented by an attorney?

When facing collections, a few different things can happen, depending on the action you decide to take.

If you talk to the collector from your credit collection services and agree to pay back the debt, negotiate! You may be able to get them to settle the debt for less than you owe and/or you can get them to agree to remove the collections account from your credit report if you pay.

You can also take the option to talk to them and tell them you don’t intend to pay. If you tell a collector you will not be paying a debt and to stop contacting you, they must adhere to that request. They may seek action in court (i.e. sue you for the debt).

The statute of limitations on debt collection is 15 years. After 15 years of no contact, a debt can no longer be legally collected. If you actually can manage to hide for as many years as this takes, then the collector of your credit collection services can no longer seek payment on the debt – even through the courts. Of course, hiding for a full 15 years isn’t exactly easy. You also are risking getting sued.

Once you get sued, you will be on the hook for the debt and have the hassle and expense of going through court. Also, once you get into the court system, your property is at risk of being liquidated to pay off your debt. A collector cannot take your property to pay off a debt – unless there is a court order.

Representation By Attorney

If a collector from your credit collection services knows that an attorney is representing you about the debt, the debt collector generally must stop contacting you, and must contact the attorney instead. This is only true if the debt collector knows, or can easily find out, the name and contact information of your attorney. If an attorney is representing you and a debt collector calls, tell them which attorney is representing you and that the debt collector should contact the attorney, not you.

The attorneys at Frank S. Buck, P.C., are dedicated to stopping debt collectors from engaging in unlawful and unacceptable behavior. If you have been harassed, or are unsure whether your debt collector’s actions qualify as harassment, please download this form and call our office at 205-933-7533 to speak with an attorney.

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