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How can I protect myself from debt collectors?

Laws prohibit debt collectors from using abusive or deceptive tactics to collect a debt. Unfortunately, many collectors ignore the rules and don't play fair. In addition, creditors and debt collectors have powerful collection tools once they have won a lawsuit for the debt. Here are some frequently asked questions and answers to help you deal with debt collectors.

Collection agencies have been calling me all hours of the day and night. Can I get them to stop contacting me?
It's against the law for a bill collector who works for a collection agency (as opposed to working in the collections department of the creditor itself) to call you at an unreasonable time. The law presumes that calls before 8 a.m. or after 9 p.m. are unreasonable. But other hours may be unreasonable too, such as daytime hours for a person who works nights. The law, the federal Fair Debt Collection Practices Act (FDCPA), also bars collectors from calling you at work if you ask them not to, harassing you, using abusive language, making false or misleading statements, adding unauthorized charges, and many other practices. Under the FDCPA, you can demand that the collection agency stop contacting you, except to tell you that collection efforts have ended or that the creditor or collection agency will sue you. You must put your request in writing.

I'm getting calls from the collections department of a local merchant I did business with. Can I tell that collector to stop contacting me?
Usually not. The FDCPA applies only to bill collectors who work for collection agencies. Though many states have laws prohibiting all debt collectors-including those working for the creditor itself-from harassing, abusing, or threatening you, these laws usually don't give you the right to demand that the collector stop contacting you.

A bill collector insisted that I wire the money I owe through Western Union. Am I required to do so?
No, and it could be expensive if you do. Many collectors, especially when a debt is more than 90 days past due, will suggest several "urgency payment" options, including:

  • Sending money by express or overnight mail. This will add at least $10 to your bill; a first class stamp is fine.
  • Wiring money through Western Union's Quick Collect or American Express's Moneygram. This is another $10 down the drain.
  • Putting your payment on a credit card. You'll never get out of debt if you do this.

Can a collection agency add interest to my debt?
In most cases, yes. But only if either:

  • the original agreement allows for additional interest during collection proceedings, or

  • state law authorizes the addition of interest. Virtually all states do allow this interest.

A collection agency sued me and won. Will I still get calls and letters demanding payment?
Probably not. Before obtaining a court judgment, a bill collector generally has only one way of getting paid: to demand payment. This is done with calls and letters. You can ignore the phone calls and throw out your mail, and the collector can't do much else short of suing you. Once the collector (or creditor) sues and gets a judgment, however, you can expect more aggressive collection actions. If you have a job, the collector will try to garnish up to 25% of your net wages. The collector may also try to seize any bank or other deposit accounts you have. If you own real property, the collector will probably record a lien, which will have to be paid when you sell or refinance your property. Even if you're not currently working or have no property, you're not home free. Depending on the state, court judgments can last up to 20 years and, in many states, can be renewed so they last even longer.

What can I do if a bill collector violates the FDCPA?
Document the violation as soon as it occurs. Write down what happened, when it happened, and who witnessed it. In some states, you can record phone conversations with debt collectors without their knowledge. But beware. In other states, including California, this is illegal. Instead, try to have a witness present (or on another phone extension) the next time you talk to the collector. Then file a complaint with the Federal Trade Commission. Also complain to your state consumer protection agency. And send a copy of your complaint to the creditor who hired the collection agency. If the violations are severe enough, the creditor may stop the collection efforts.

Also, you can sue a collection agency (and the creditor that hired the agency) in small claims court for violating the FDCPA. You are less likely to win if you can prove only a few minor violations. If the violations are outrageous, you can sue the collection agency and creditor in regular civil court. One Texas jury awarded a debtor $11 million when a debt collector made death and bomb threats against her and her husband that frightened them into moving out of the county.

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