Debt Collectors 101 How to Cope With Them

You're experiencing problems managing your debt load and one or more creditors has given your debt over to a collection agency.

The term debt collector often strikes fear in the mind of the consumer and we often have visions of a thug showing up at our door with a baseball bat to collect the debt or imagine someone contacting our employer and everyone else we know, to run us down and exert pressure on us to pay.

What can we do? What are our rights? Or, better yet, what can the collector do or not do?

This is such an important issue and if you're one of the unlucky ones in this situation, it can poison your life. When you're in that kind of a situation, it usually feels as if you're all alone and it just seems that there's nowhere to turn for help. On top of that, some of the debt collectors out there use all sorts of tactics to try and intimidate the consumer and, quite frankly, often do things outside what's permitted by the law, relying on the fact that consumers don't know their rights.

There can be a tendency to simply ignore it and hope that it goes away or, to hide from it altogether, but that's definitely the worst thing to do. Check out the facts, find out where you stand, and what are your rights. You just may be surprised.

So, Let's take a quick look at some of the main questions people ask when they're confronted with this:

1. Are debt collectors subject to any rules? Absolutely! Most jurisdictions/countries have laws that spell out what debt collectors can and can't do. In the US, that law is called the 'Fair Debt Collection Practices Act' (FDCPA for short) and it's enforced by the FTC. Some states also have laws, the provisions of which can vary from those of the FDCPA. What follows are comments based on the FDCPA. You should check locally to see if there is a specific law in your jurisdiction.

2. Who's covered? The FCCPA covers anyone that regularly collects debts owed to others, including collection agencies, lawyers who regularly collect debts and companies that buy debts and then try to collect them on their own behalf. One of the key phrases here is 'owed to others'. Your bank, for example is not covered by this act (they're usually covered by a multitude of other laws, though) but, a collection agency acting on behalf of your bank would be.

3. What Debts are covered by the Law? The FDCPA covers personal debt, good examples being credit card debt, car loans or mortgages. The act does not cover business debt.

4. Can the debt collector contact me any time of the day? Unless you give the collector a green light to do so, they cannot contact you at inconvenient times. What's 'inconvenient' is subject to interpretation, but it is generally taken to mean before 8:00 am or after 9:00pm.

5. What about contacting me at work? A collector cannot contact you at work if you advise him/her that you're not allowed to receive calls there.

6. Can the collector speak to someone else about my debt? A collector can contact your spouse or anyone representing you in this case. A collector may not arbitrarily contact other people, except to obtain your address, phone number or where you work.

7. What if I don't, or think that I don't, owe the money? A debt collector must stop contacting you if you advise the collector that you don't owe any or all of the money, except, to send you proof validating the debt. Once the collector has provided that proof he can then resume contacting you, unless you again dispute that claim.

8. Can a collector seize my bank account or wages? A collector can only do that if it has taken court action against you, has won and, obtained judgment. Whatever you do, don't ignore any notices of legal action being taken. Act so as to be sure to protect your rights.

9. What are collectors prohibited from doing? In general terms, collectors are prohibited from:

- Harassing you
- Lying when they're trying to collect a debt
- Giving out false information about you
- Using unfair practices

For more details on what are prohibited practices, check with your state's Attorney General's office or the FTC.

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Cease-Communication Letters - Forcing Debt Collectors to Stop ...

Debt collection is a huge and growing industry in the United States, and collectors are notorious for some of the strategies they use to try to scare or annoy consumers into payment. You can make them stop.

The Debt Collection Business

Debt collectors know that they people they are calling do not have much money-their purpose is to move themselves to the head of the line. In other words, debt collectors are competing with each other for what they know isn't much money. The way they do this is by attempting to inflict more pain or annoyance on the consumer than other bill collectors.

The collectors are not concerned with your priorities or well-being, but you should be, and it is hard to keep a clear head amidst all the noise. Sometimes the only way you can get any control over the situation is by making them stop calling you at all. Luckily the Fair Debt Collection Practices Act (FDCPA) offers some help.

The Fair Debt Collection Practices Act (FDCPA)

Under the FDCPA, 15 U.S. Code Section 1692(c)c, 'if a consumer notifies a debt collector in writing that the consumer wishes [it] to cease further communication with the consumer, the debt collector shall not communicate further...with respect to such debt.' However, the collector may inform the consumer that it's efforts are being terminated, or notify the consumer that it 'may or will invoke specified remedies which are ordinarily invoked' (i.e., suing or reporting to the credit agencies). In my experience, they will send you a carefully written letter, telling you that they MAY do all sorts of terrible things to you. That doesn't mean they will do it, though. In fact, the sooner you cut them off, the less likely they may be to do any of these things because they don't know whether they'll be able to get any money out of you.

How to Do It

No specific language is required in the letter, although it obviously needs to contain the clear and unambiguous directions to stop contacting you.

Crucially, if the notification is made by U.S. mail, the communication is complete only 'upon receipt.' In other words, to make sure the debt collector is forced to cease communications, it makes sense (although it is not required by the law) to send the letter by certified mail. That way you have proof that the debt collector received the letter. Any further communication would be in violation of the FDCPA.

When the phones stop ringing off the hook, you will be freer to make decisions according to your own best interests and priorities.

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