Tag: Fair Debt Collection Practices Act

Bankruptcy Law, Debt Collection

Collection Laws & Bankruptcy: What are my Legal Rights?

Posted on by Admin

Any business that extends credit to a consumer must adhere to federal and state consumer laws and fair debt collection practices. When businesses extend credit to consumers, they run the risk of the consumer not being able to pay them back.

When a creditor attempts to collect a debt directly, state law governs the collection process. In many states, the creditor must contact the consumer by phone and provide written notice before starting formal collection proceedings. Most states prohibit repeated harassing phone calls, threats of legal action that cannot be taken, misrepresenting the creditor’s identity, sending mail that references debt collection on the outside, and attempting to collect more than the amount owed.

State and federal laws protect consumers from harassment by creditors and debt collection agencies.

Debt collection agencies must comply not only with state laws, but also with the federal Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits abusive and deceptive debt collection tactics, such as calling a consumer and failing to identify the reason for calling, calling at inappropriately early or late hours, contacting the consumer at work after being told the consumer cannot receive calls at work, revealing the consumer’s debt to third parties, or threatening violence.

Collections and Bankruptcy

Filing for Chapter 7 or Chapter 13 bankruptcy triggers an automatic stay. This is one of the best tools available to bankruptcy filers. When a person files for bankruptcy, the court will issue an order called an automatic stay. This puts an immediate stop to collection attempts, creditor harassment, along with any civil lawsuits filed against the person pursuing bankruptcy.

The automatic stay gives filers relief when they face multiple financial pressures and collection actions at the same time.

Automatic Stay Benefits

When someone is facing severe financial hardship, they may be at risk of losing the most basic of necessities. If they are behind on utility bills and face losing water, electricity, or gas service, the automatic stay can give them extra time to resolve the issue and avoid a shutoff.

The same protection applies to someone facing foreclosure. The automatic stay immediately pauses those proceedings. If the filer rents their home and is facing eviction, the stay may also provide temporary relief.

Click here to read more.

If you have questions about this topic or are facing financial hardship and considering bankruptcy, contact an experienced Miami bankruptcy attorney who can explain your options. As both an experienced CPA and a proven bankruptcy lawyer, Timothy Kingcade helps clients use bankruptcy laws to protect their assets and pursue successful outcomes. Since 1996, Kingcade Garcia McMaken has helped people from all walks of life build a stronger financial future. Our attorneys help thousands of people each year use bankruptcy protection to restart, rebuild, and recover. Once you hire our firm, we will contact your creditors to stop the harassment. You can also find helpful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Related Resource: Creditor Held in Contempt of Court for Violating Automatic Stay

Credit Card Debt

How to Respond If You Are Sued for Credit Card Debt

Posted on by Admin

Most consumers utilize a credit card at some point in their lives, and many of them carry credit card debt from month-to-month. The amount of credit card debt carried by consumers is growing. It is estimated that around 23.5 percent of all Americans struggle with some type of debt in collections status, according to the Consumer Financial Protection Bureau (CFPB), and much of this debt involves credit card debt. If a consumer is on the receiving end of a collections lawsuit for credit card debt, it is important to know how to respond.

A collections lawsuit can vary, depending on the jurisdiction, but, the steps are all fairly uniform. The first thing to expect is the consumer will receive a complaint filed in civil court, along with a summons. This summons should contain a number of important pieces of information including who is suing the consumer, whether any additional co-defendants are a part of the lawsuit, how much money the creditor is attempting to seek, which can include the balance owed, along with interest fees and legal fees, the date of the hearing, and how to file a formal answer or response to the complaint.

Debt Collection

What Consumers Need to Know About Debt Collection Rules ‘Regulation F’

Posted on by Admin

Several new debt collection rules have been announced by the Consumer Financial Protection Bureau (CFPB). These rules, through what is called Regulation F, offer greater control to consumers over the various method and times they will be able to be contacted by debt collectors.

Regulation F was implemented by the CFPB on October 30, 2020, and December 18, 2020. The regulation was created to interpret the Fair Debt Collection Practices Act (FDCPA). The FDCPA is meant to protect consumers from abusive collection tactics by third-party debt collectors. Regulation F officially went into effect on November 30, 2021. The FDCPA and the regulations included in Regulation F apply only to third-party debt collectors and not original creditors.

Debt Collection

Can a Debt Collector Contact me on Facebook?

Posted on by Admin

Debt collectors will resort to any tactic possible to contact a consumer regarding an outstanding debt. Traditionally, these communications have come in the form of phone calls or letters, but as technology has advanced, text and email communication have become a common way of reaching consumers. Debt collectors are also resorting to tracking people down through their social media accounts.

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

Debt Collection

What Behavior Is Considered Harassment by a Debt Collector?

Posted on by Admin

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, Debt Relief

CFPB Announces Two Final Debt Collection Rules to Go into Effect November 30

Posted on by Admin

The Consumer Financial Protection Bureau (CFPB) announced two final debt collection rules which are scheduled to take effect on November 30, 2021. These two rules clarify and add further detail to provisions of the Fair Debt Collection Practices Act (FDCPA), the law that offers protections to consumers from abusive or unfair collection practices from third-party debt collectors.

These rules were originally going to be made effective in the spring, but the CFPB delayed the effective date by 60 days to allow all affected parties time to comply due to the COVID-19 pandemic. However, after making the announcement regarding a 60-day delay, the CFPB determined that the extension was not needed and published the official notice in the Federal Register officially withdrawing the extension.

Debt Collection

How Federal Laws Protect You When Dealing with Debt Collectors

Posted on by Admin

Dealing with debt collectors can be stressful. Their job is to get the consumer to pay on a debt at any means necessary, which can often mean through coercion, harassment, and fear. Many debt collectors have been known to use aggressive or illegal tactics to collect on a debt, leaving many consumers to feel like they have no choice but to make payment to get them to go away. However, federal law offers certain protections when it comes to debt collectors. It is important that consumers understand what these protections are so that they are aware of what rights they do have when dealing with debt collectors.

According to the Consumer Financial Protection Bureau (CFPB), nearly one in every four people have a debt in collections. Illegal debt collection practice is a common complaint made to the CFPB.  

Debt Collection, Debt Relief

Understanding Zombie Debt and the Statute of Limitations

Posted on by Admin

Consumer debts have what is called a statute of limitations. This is the amount of time the creditor can use the court to force a consumer to pay a debt. After the statute of limitations has expired on a debt, it is no longer legally enforceable. Occasionally, however, a consumer may be contacted regarding an old debt by a collector who hopes the consumer will ‘restart the statute of limitations.’

Zombie debt is debt that the consumer thinks is “dead,” meaning it is past the statute of limitations that the debt collector is now trying to bring back to life. While the debt collector cannot take the consumer to court to collect on the debt, there are no laws saying they cannot continue to contact the consumer to collect what is owed. Many times, debt collection agencies will purchase expired debt to turn a profit. Since the cost to buy expired debt is exceptionally low, even if they collect on a handful of accounts, they are still earning a profit.

Bankruptcy Law, Debt Collection

Understanding the Fair Debt Collection Practices Act (FDCPA) 

Posted on by Admin

Facing debt collection is stressful and there are laws in place to protect consumers.  Debt collectors can be persistent, even to the point of becoming harassing and threatening at times. However, it is vital that consumers facing collections actions realize that they do, in fact, have rights, and these rights fall largely under the Fair Debt Collection Practices Act (FDCPA). 

The FDCPA was signed into law in 1978. The law designates what type of behavior is acceptable by debt collectors and what type is considered abusive and unethical.  The law was created to curb tactics that had largely gotten out of control by companies engaging in debt collection.