Tag: debt collector

Wage Garnishment

Can a Debt Collector Garnish Your Wages Without Telling You?

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If you have fallen behind on credit card payments, you know first-hand the lengths creditors will go to collect on what you owe. One of these methods goes beyond incessant phone calls, letters, and text messages, it’s called wage garnishment. This is when a creditor is given legal permission to collect what is owed by deducting a portion of money from your paycheck before it reaches your bank account.

This can cause big issues with your finances, especially if it comes without warning. So, can debt collectors take your money without telling you, first?

The simple answer is no. The law dictates specific steps a creditor must take to be able to garnish a person’s wages to satisfy a debt. Without these protections, a creditor could simply take money out of the person’s bank account.

The wage garnishment process starts with the creditor or third-party debt collector filing a lawsuit to formally collect the debt. If this lawsuit is successful, the creditor or collector will receive a judgment against the creditor. This legal judgment gives the creditor the authority to then ask the court to issue a wage garnishment order, allowing them to satisfy the debt by garnishing the consumer’s wages. Once signed, this order is sent to the consumer’s employer to start the garnishment.

The good news is certain steps can be taken to stop a wage garnishment.

Filing for bankruptcy in Florida puts an automatic stay on wage garnishment, which immediately stops Florida wage garnishment. The automatic stay lasts for as long as the bankruptcy. With the automatic stay in place, you will be able to take home your entire paycheck.

One important thing to keep in mind is creditors can only garnish a certain percentage of the consumer’s paycheck. Federal law dictates that the amount garnished from a person’s wages cannot be more than 25 percent (25%) of his or her disposable income or the amount taken that by which the person’s take-home pay exceeds 30 times the federal minimum wage, whichever of these two figures is less.

One exception does exist when it comes to wage garnishments. Federal law dictates that the consumer’s wages, as well as his or her social security benefits, can be garnished to pay student loan debt and back taxes owed. The U.S. Department of Education and IRS are given authority under federal law to garnish the consumer’s wages without a court judgment or even filing the lawsuit. No official garnishment order is needed for either entity to garnish a person’s wages.

A person can take certain steps to stop a wage garnishment before it even starts. One thing a consumer can do is to work directly with the creditor to negotiate a payment plan to pay down the debt in lieu of a wage garnishment. Many times, creditors prefer this be done before the collection action is even initiated, saving them the legal fees associated with starting a legal proceeding. Payment plans also allow the consumer to set a reasonable amount for a monthly payment, one that will fit with his or her budget. Negotiating a payment plan once the garnishment order has been issued can be a little harder, so it is recommended this action be taken before that order is issued.

Debt Collection

What Behavior Is Considered Harassment by a Debt Collector?

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Most people never expect to fall behind on their debts. Sometimes, however, circumstances beyond a person’s control result in them being contacted by a debt collector. This is not uncommon today. In fact, 77 million American consumers or 35 percent of all adult consumers have a debt in collection.

Being on the receiving end of debt collection phone calls and other communication can be extremely stressful. Debt collectors are paid to do whatever they can to get a consumer to pay off a debt, which often results in the collectors trying to reach the consumer through phone calls, emails, texts, and direct mail so much that it borders on harassment. However, federal law prohibits certain behaviors from third-party debt collectors to protect the consumer.

Debt Collection

How to Dispute a Debt with a Debt Collector

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Debt collectors can be relentless. They will attempt to contact a consumer through any means necessary to collect on a debt. Financial hardships can be stressful enough but dealing with the additional stress of collection calls can be a large burden in a person’s life.

Surprisingly, this burden is even dealt with by people who don’t owe any debt at all. In fact, according to Forbes, around 52% of debt collection complaints received by the Consumer Financial Protection Bureau in the last year were made by consumers that claimed they were being contacted regarding debts they did not have.

Debt Collection

Can Debt Collectors Contact You on Social Media?

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Debt collectors will attempt to contact a consumer through any means necessary to collect on a debt. As more consumers communicate with each other via social media, debt collectors are utilizing these platforms as another means to contact consumers.

A federal agency issued a new rule that would allow debt collectors to contact people by email, text message, and social media platforms, including Twitter, Facebook, and Instagram.

The new rule limits how many times the collection agency can contact the consumer via telephone. Collectors will be limited to seven debt-collection phone calls weekly, but they are allowed to send an unlimited number of text messages, email messages, and social media private posts.

Debt Collection

Cellphone Robocall Ban Upheld by U.S. Supreme Court

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The U.S. Supreme Court issued a ruling this week that upheld a federal ban on robocalls to mobile devices. The ruling issued by the court broadened the ban, eliminating a 2015 exception that previously existed for government-debt collection while keeping the original 1991 robocall ban intact.

The matter came before the court in Barr vs. American Assn. of Political Consultants. Due to the coronavirus pandemic, the case was ironically argued remotely via telephone. The ban was originally created by the 1991 Telephone Consumer Protection Act, which issued fines up to $1,500 for any call or text placed to a mobile phone without prior consent by use of an automatic, robocall dialing or automated voice messaging system. The issue at hand arose after Congress created an exception to the law in 2015, that allowed for automated robocalls to consumers who owed debt to the U.S. government.

Debt Collection, Debt Relief

What Rights Do Consumers Have When it Comes to Debt?

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When someone is in debt, he or she may feel trapped with nowhere to turn. According to Northwestern Mutual’s 2018 Planning & Progress Study, the average American consumer has $38,000 in debt, not including their mortgage.

As soon as creditors or debt collectors begin contacting the consumer regarding what he or she owes, the person may feel like he or she has no choice but to do whatever is being demanded of him or her. However, most consumers do not realize that they do, in fact, have rights when it comes to debt they owe. It helps to know what these rights are when debt collectors or creditors come calling.

Debt Collection, Debt Relief

Tips for Getting Your Debt Out of Collections

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Getting out of debt can seem like a never-ending battle. Once someone falls behind on one or more bill payments, the debt collector calls can be relentless. The late fees and penalties that are often assessed on past-due accounts, not to mention the interest rate spikes that come along with missing a payment, can make getting back on one’s feet nearly impossible. There are certain steps that can help consumers who are facing these types of situations get out of debt and stay out.

Remain Calm.

It can be easy to react out of stress or panic and make decisions that someone would not normally have made, especially when dealing with debt collectors. It is important that whatever decisions are made by the consumer are ones that are carefully considered and logical. Many consumers may react out of fear and enter into payment agreements that they would not normally agree with and cannot realistically afford just to get the debt collector to back down. The aggressive techniques used by many debt collectors have this motive in mind. Make sure you understand and get the terms in writing, first. Never agree immediately to a payment arrangement over the phone with a debt collector.

Debt Collection, Debt Relief

5 Disclosures You Should Never Make to a Debt Collector

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In life, honesty is always the best policy, but not when it comes to communicating with a debt collector. In fact, it is best to use caution when making any statements to a debt collector, as they could be recorded and used against a person later. By no means should the consumer lie to the debt collector, but he or she should at least use reasonable care when talking with someone who is collecting a debt.

It is important to be aware of the tactics that many debt collectors will use to get you to pay on a debt. They often will resort to scare tactics or bullying to put the individual in fear of losing his or her home or livelihood if he or she does not pay on the debt. One key piece of advice is to know that all consumers have rights under the Fair Debt Collection Practices Act (FDCPA).

Bankruptcy Law, Debt Relief

How to Defend Yourself Against a Debt Collection Lawsuit

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When someone is facing a debt collection action, it can seem like a hopeless situation. It is a situation, however, that many Americans face. According to the Consumer Financial Protection Bureau (CFPB), more than 70 million Americans have interacted with a debt collector.

Of these 70 million, 25 percent of them report feeling threatened during their communications with debt collectors, who often use aggressive methods to obtain payment. If the collection gets to the point where legal proceedings are filed, certain steps can be taken to protect your rights.

  1. File a Response

The biggest mistake that consumers make is to ignore the paperwork when they receive it. A consumer who is facing a debt collection proceeding will receive a summons and complaint, informing him or her that a legal action to collect upon the debt has been filed. This paperwork will provide information regarding how long the individual has to file a response to the legal action. If a response is not filed, however, the debt collector or creditor can get a default judgment against the individual, resulting in a garnishment of the consumer’s wages. If that happens, the court can add the collection agency’s legal fees, court costs and interest to the balance.

Bankruptcy Law, Credit Card Debt, Debt Relief

Tips for Negotiating with Debt Collectors

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Working with a debt collector is normally not a pleasant experience. Debt collectors are persistent when trying to reach a debtor, and many will stop at nothing until they are successful at getting payment. Any time someone is late on or has missed a payment, that person should expect some type of communication from a collector, whether it be in written form or through phone calls. Many times, it is a combination of both. It helps to know your rights when dealing with a debt collector and know how to work with them on negotiating your debt.

Get Verification of the Amount Owed

Never assume that the information the debt collector is providing is completely accurate. Believe it or not, many scams are out there where debt collectors attempt to collect on debt that belongs to another person or is entirely past the statute of limitations. As soon as the debt collector makes contact, ask them to provide written verification of the amount owed.

Also, verify the credibility of the debt collector. Ask for the person’s name, the name of the company, a business address and a phone number. It pays to do some research into the company to see if they are, in fact, a legitimate debt collector. Also, review the amount they say is owed against your own records to ensure that the amount is accurate. Collection agencies are bound by law to send a validation letter within five days of contacting a debtor, listing the debt amount, the original creditor, and what the debtor should do in the event an error is discovered. It could be possible that a debtor owes on a specific debt but in a smaller amount than the collector is arguing they owe. Always verify before making payment.

Debtor Rights

One big mistake many debtors make is assuming that they have no rights when speaking with a debt collector, which is very far from the truth. Because many times, a debt collector’s actions will border on the edge of harassment or threats, the Fair Debt Collection Practices Act, or FDCPA, was enacted, which prohibits a debt collector from deceiving, threatening or harassing a debtor while collecting on a debt. The FDCPA prohibits any type of communication that threatens the debtor, includes profane language, or makes the debtor feel harassed. The collector can also not lie to the debtor, threaten to arrest or deport him or her, or threaten to take the person to court without any intention of doing so. A debt collector is also prohibited in the times that he or she can contact a debtor. Calls cannot be made before 8 a.m. or after 9 p.m. If a debt collector is violating the FDCPA, inform them of the violation and demand that no more communication be made. The collector can be reported to the Consumer Financial Protection Bureau, as well as the Better Business Bureau and the Florida Attorney General.

Look at the Type of Debt

It also helps to know what type of debt is involved when dealing with a collector. Many times, different options exist for payment plans based on the type of debt, whether it be credit card, medical debt, or something secured with collateral, like a car or home. Medical debt creditors tend to be more willing to work out a payment plan than credit card creditors. Also, if the debt involved is a medical debt, double check to make sure that the debt was processed by insurance first. Student loan service providers may also be more likely to work with a debtor on an income-based repayment plan or even may offer a deferment option to allow the debtor to get back on his or her feet first before continuing payment.

Some collectors will work with a debtor on a lump sum payment that is lower than the amount owed in exchange for releasing the debt. Ask if that is a possibility on the balance, and if it is, see if the collector will settle for a partial repayment over receiving nothing.

Be Aware of the Statute of Limitations

As mentioned previously, debt collectors will also try to get a person to pay on a debt that is past the state’s statute of limitations. It is highly possible that a phone call from a debt collector is on a debt that is past the time frame in which they have a legal right to pursue payment. The statute of limitations for Florida is five years for written contracts and four years for oral contracts or revolving accounts, such as credit cards.

Use the “Bankruptcy” Word

Sometimes it does benefit the debtor to mention that he or she is considering filing for bankruptcy. The collector wants to receive payment, and if the debt is something that is unsecured, such as a credit card or medical debt, it could easily be discharged through bankruptcy. If this happens, the creditor will end up receiving nothing. Tell the collector that bankruptcy is being considered not as a threat necessarily but more as a push to motivate them to negotiate. However, only do this if repayment in any form is an actual possibility. Otherwise you could be making empty threats.

Always Get It in Writing

When dealing with debt collectors, any time someone works out an agreement with the collector, it is imperative that he or she memorialize the agreement in writing. This rule of thumb applies for whatever type of agreement is reached, whether it be a debt repayment plan, a change in payment terms, or a lower interest rate. Request that the agreement be sent via mail, and always review the terms very carefully before signing on the dotted line. Make sure nothing has changed from what was originally discussed. Many times, a debt collector may add some additional language that was not agreed upon, and once the contract is signed, the debtor is bound by that agreement. Always review before signing.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.