Each year thousands of debtors complain to the Federal Trade Commission (FTC) about violations under the Fair Debt Collection Practices Act (FDCPA). The good news is debtors are wising up to the legal rights they have under the law and are willing to fight against abusive, unfair, or deceptive practices debt collectors have used for years.
Recently on our bankruptcy forum a debtor asked, “I have heard something about a law that protects me against harassing debt collector actions. What is this bill and what can I do to stop debt collectors?”
Understanding the Fair Debt Collections Practice Act
As mentioned above, debtors do have rights against certain debt collector actions. The first step, however, is to understand what debts the law covers and what specific actions the debt collectors are allowed to do.
First, not all debts are covered under the FDCPA. According to the FTC, the law specifically covers, “Personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.”
Next, there are very specific actions which are off-limits for debt collectors. For example, debt collectors cannot harass, abuse, or oppress you. The FTC considers all of the following actions to be illegal:
- Threatening violence or harm
- Using profane or obscene language
- Calling repeatedly in an attempt to annoy the debtor
- Making false claims that they are an attorney
- Lying about the amount of money owed
- Suggesting the forms and statements they are sending the debtor are legal forms
- Accusing the debtor of falsely committing a crime
- Threatening arrest
- Threatening garnishment, property repossession, or legal actions they do not intend to pursue
- Giving false information about the debtor to a third party
- Using a false company name
Debt collection agencies also cannot deposit post-dated checks early, try to collect excessive fees or interest (except if allowed under the contract or under state laws), or contact the debtor by post card.
Can debt collectors garnish my wages or take my possessions?
The collection agency may have the legal right to sue you in court for repayment of certain debts, but unless they successfully win their case against you and the court issues a judgment, they cannot garnish your wages.
If they are successful in court, however, some states do allow wage garnishments for unsecured debts or repayment from funds in your bank accounts. Other states, however, such as Texas, may not allow wage garnishments for payday loans. In Texas, wage garnishments are only allowed for unpaid income taxes, child support, and defaulted student loans. Talk to a lawyer if you have questions about your rights in your state.
You have protections against harassing debt collection actions by credit collection agencies. Although the collection agency has a right to contact you about your debts, you may be able to limit the amount of contact. You also have the right to specific information about your debts and can take legal steps if the debt collection agency breaks the law.
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