We frequently get questions from debtors who question when it is time to file bankruptcy or what steps they should take when they facing a financial crisis. We tell debtors one of the first steps they need to take is to identify their debts and make contact with their creditors.If you are like other debtors you may have simply avoided debt collectors by avoiding their calls or not opening their letters, but financial experts agree, one of the most important steps to solve your financial crisis is to understand and know your rights as a debtor under the Fair Debt Collection Practices Act.
The Fair Debt Collection Practices Act was instituted in 1977, and it outlines what creditors are allowed to legally do to collect debts. Abuses curbed by this law include harassing and threatening calls, calling the debtor’s work place or making contact with friends and family members and notifying them of a debtor’s debts.
What are the basic provisions of the Fair Debt Collection Practices Act?
– Debtors have the right to sue debt collectors who violate the provisions of the Fair Debt Collection Practices Act.
– Debtors have legal protection against excessive phone calls, harassment, and threats of violence or harm.
– Debtors may not be contacted prior to or after specific times of the day. For instance, calls before eight in the morning or after nine at night are prohibited.
– Collectors must provide proof to debtors, if requested, that they owe the money the collector is attempting to collect. Information which must be provided includes: the amount of the debt, the name of the creditor, verification of the debt if requested and notification that the debtor must dispute the debt within 30 days or the debt will be considered accurate.
– Collectors are not allowed to provide information about debts to unauthorized parties.
How do I stop the harassing collection agency phone calls?
If you are faced with harassing phone calls or calls to your workplace you have the legal right, under the Fair Debt Collection Practices Act, to send a cease communication letter to the debt collection agency. This letter notifies the debt collection agency to either submit all of their correspondence via letter or not at all.
After the collection agency receives the cease communication letter they will generally either notify the debtor that a lawsuit will be filed or they may choose to dismiss the debt. Consumers also have the right to hire a lawyer and have them negotiate directly with the debt collection agency.
Victim of abuse, can I receive financial compensation?
If you have been the victim of an abusive debt collector you have the legal right to file a civil lawsuit. The statute of limitations for this type of offense is one year from the date of the abuse violation. There are legal caps on all damages awarded for these cases.
What’s the bottom line?
Many consumers have made purchases and have not paid for them. Businesses have the legal right to collect debts. If the original business is unable to collect the debt they also have the legal right to sell this debt to another company who may attempt to collect the debts. The honorable action is for consumers to pay for services and products that they purchase. If they are unable to make payments it is important to contact the company and attempt to negotiate another settlement agreement or payment plan. But with that said, debt collection companies have the legal responsibility to use legal business practices to collect debts.
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