Bankruptcy Law, Debt Collection

Understanding the Fair Debt Collection Practices Act (FDCPA) 

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.  

Debt Collection

State and Federal Agencies Teaming Up to Combat Illegal Debt Collection

Debt collection is a profitable business in the U.S., but not all debt collectors follow legitimate, legal collection practices. According to officials from the Federal Trade Commission (FTC)most consumer complaints made annually involve illegal debt collection practices, which is why they have made recent efforts to crack down on these types of tactics. 

In response, the FTC has launched a multi-agency campaign called “Operation Corrupt Collector.” This crackdown campaign focuses on educating consumers on how to identify illegal debt-collection practices, as well as enforcement against debt collectors who are found to be breaking the law.  

Debt Collection, Debt Relief

How to Work with Debt Collectors When You Are Not Able to Pay

Dealing with debt collectors is stressful, especially when the person owing the debt simply does not have the financial resources to pay. It can be easy to fall behind on bills, and before too long, the consumer will find himself or herself juggling countless collection calls. These calls are not always pleasant. After all, the debt collectors have one job to do and that job is to receive payment on the debt. What is the best way to deal with debt collectors when an individual is not able to come up with the payment?

Stay Calm and Attempt to Work with the Collector

Debt collectors have a reputation of being aggressive when performing their jobs. However, it is important to stay as calm as possible when communicating with a debt collector. If a consumer agrees that he or she owes the debt and does not have the resources to do so, it may still be beneficial to at least attempt to work with the debt collector on paying on the debt. If the person does not have the money but still wants to pay, the collector may mark the consumer down as “refused to pay.” However, do not fear this label. It is essentially meaningless in the collection process. It does not make the collection case against consumer any worse or any better.

Debt Collection

Facing Debt Collection? Know Your Rights.

When someone is facing debt collection, it is important that person knows his or her rights.  The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects consumers against unfair collection practices, including:

  • Calling you repeatedly to annoy or harass you;
  • Trying to collect more than you owe;
  • Failing to send a written notice of the debt;
  • Threatening violence, using profanity or offensive language;
  • Threatening dire consequences (i.e. – lawsuits, criminal prosecution, wage garnishment, jail time, permanently ruining your credit);
  • Calling you before 8 a.m. or after 9 p.m.;
  • Revealing debt to third parties (i.e. – family, neighbors, friends, co-workers, etc.);
  • Contacting you at your work, after you have requested them to stop;
  • Failing to verify disputed debts;
  • Ignoring cease communication requests.
Debt Collection, Debt Relief

What Rights Do Consumers Have When it Comes to Debt?

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

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

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, Credit, Credit Card Debt

Steps to Remove Judgments and Collections from your Credit Report

Every consumer should review his or her credit report at least once a year to confirm that there are no inaccuracies.  Lenders look to a person’s credit score to determine whether he or she is a lending risk. The lower the score, the harder it will be for that person to obtain financing.  It can also affect the interest rate on the loan.

Certain actions, such as a judgment against the consumer or a collections action, can negatively impact a person’s credit score. However, if a consumer does have judgments or collections actions on his or her report, it is possible to have this information removed.

Bankruptcy Law, Medical Debt

What Happens When You Fail to Pay a Hospital Bill?

Countless Americans struggle to pay for their medical expenses every year. It only takes one major medical crisis to set a person back thousands of dollars. If that person does not have adequate savings for emergency expenses, it can be very easy for that medical bill to turn up past-due and fall into collections. This situation is an all-too common occurrence for many Americans.

An estimated 43 million American consumers reportedly carry some amount of unpaid medical debt. It is also reported that half of all debt listed on American consumer credit reports is from medical expenses, according to a 2014 Consumer Financial Protection Bureau (CFPB) study.