Debt collectors want you to think that they can harass you whenever they want, and often in whatever way they want. Some of them will even outright lie to you, or try to scare you, in order to get you to pay off the debt or make a payment. There is good news for you – you no longer need to put up with it. Here is what you can do about those pesky collection agencies.
You will likely get a call from the first type of collection agency, after your payments start running late. This is the collection department of the company you owe the money to, and you may get calls from them up to about 180 days. They will often try to work with you as long as you are cooperative. It is possible with some companies to be able to get lower payments (at least temporarily) and possibly even get lower interest rates.
At some point between 90 and 180 days, the company may turn your debt over to a collection agency of the second type. This company will pay the original company a few cents on the dollar for your bill, and then they will proceed to try and get the money from you.
When your bill is given to a collection agency, a mark is made on your credit report. When that happens, your credit score begins a downward trend – at least until you get caught up in the payments, pay the entire debt or are able to have it removed.
A few bill collectors like to be able to give you the impression that they can basically treat you the way they want – which is oftentimes like dirt. This can leave you afraid to do anything but what they tell you, but the truth is that the government has put them on a leash, when it created the Fair Debt Collection Practices Act (FDCPA).
This Act was created as a reaction against the many abuses that some bill collectors were using at the time. One large collection agency, the Expert Global Solutions, USNews reports, was fined $3.2 million because of their harassment.
The FDCPA does not cover every type of debt you may have. It will cover most personal debts, such as personal loans, car loans, medical bills, personal credit card accounts, and your mortgage. It will not cover you, the FTC says, for any debts you accumulated to run your business.
The FDCPA sets forth some specific things that they can and cannot do. An important thing to know, though, is that these laws only apply to third party debt collectors, and not to the original creditors. Some of the limitations include:
In general, debt collectors cannot hurt your credit score as long as you are making payments regularly. If you make late payments, or miss several of them, then they will make a note on your credit report.
Collection agencies often swap bills with other agencies. This can hurt your credit score even more because each new company may then make a bad reference on your credit report if you continue to be behind in payments. Once this happens, it is doubtful that you will be getting any new credit for some time.
One of the threats that bill collectors may use is where they threaten to garnish your paycheck. The truth is, according to ConsumerFinance.gov, that some states do allow garnishment of your wages, but there are some restrictions. Other states will not permit it. The amount of money eligible for garnishment will vary by state, but enough money will be left so that you have money to live on.
Also, if certain types of funds get deposited into your bank account, such as Federal funds, they may not be taken as garnishment. There are some circumstances, though, where Federal funds can be garnished, such as in the event you owe child support, have unpaid taxes, alimony, or student loans. The garnishment of wages can only happen after a court order is given to do so.
If you are not sure you really owe the money to the company calling you, you do not want to admit that you owe anything. Do not agree to make any payments on the debt, either. Instead, be sure to get proof you owe the money before doing anything else.
Do not provide personal information. This includes information about your bank accounts, your job, or about any property or assets you own.
The online legal company, Findlaw, provides some steps you can take if you are a victim of harassment from a collection agency. You should record the contact information on a log. Include a list of dates, time of calls, names of witnesses, and keep copies of all written communications. If legal in your state, you may also want to record the conversations.
Once you have sufficient evidence, file your complaint with the Federal Trade Commission. Send your letter to:
Federal Trade Commission
6th and Pennsylvania Ave.NW
Washington, DC 20580
You may also go to their website at: http://www.ftc.gov/ftc/complaint.htm.
The Federal Trade Commission also offers customizable templates so that you can edit them and send them to debt collectors to stop all communication. You need to realize that it will not cancel any legitimate debt. The goal of the letter is simply to stop the harassment.
The legal agency Findlaw reports that if you are being harassed by a debt collection agency, that you do have the right to sue them for harassment. There are, however, two considerations that you need to be aware of before you take this step.
Once the debt collection agency becomes aware that you have hired a lawyer about the case, they are not allowed to contact you directly. All of the company's communication from that point must be directed to the lawyer. The exception is if the lawyer does not respond within a reasonable period of time.
You do not need to let debt collectors harass you anymore. Stay within the law and follow these steps to put an end to it. If you are sued by the collection agency, be sure to respond by the court date, or you are apt to lose your rights. Be aware that some states have variations from the laws in the FDCPA, and you will need to know what they are for best results.