Debt collection laws
Debt Collection Laws
and the Way They Work
Debt collection laws
are put in place to shield consumers from unjust debt collection policies. The
discovery of collection institutes brought along the faulty and fraud policies
of debt collection among the collectors.
Ever since, the
federation has implemented a law called the Fair Debt Collection Practices Act (FDCPA)
which fights the offensive and illegal policies of debt collectors. The FDCPA
sets specific limitations on the actions and techniques of debt collection
agents.
However, it is vital
that have a complete understanding of the way debt collection works so as to
not be involved in a case of fraud.
The Fair Debt Collection Practices Act and Its Rules
Consumers generally
misconstrue the working of FDCPA. The law applies to all third-party debt
collection offices: Collection agencies, debt buyers and lawyers who exercise
debt collection as a component of their business are all regarded as
third-party debt collectors.
The FDCPA application
comprises of debts like mortgages, credit
card debts, medical debts, student loans and auto loans. This
law highlights certain limitations of the actions of a debt collector and the
methods they use to communicate with the consumer. If any of these rules are
violated, you can issue a warrant within a year against the debt collector or
agency.
What Are the Rules and Ways a Debt Collector Can Contact You?
·
Time:
Collection companies can communicate with you through the phone, mail, fax or
email. There are certain times during which a debt collector can contact you,
between 8 a.m. and 9 p.m. local time. Any contact falling out of the set
timings is a violation of the FDCPA.
·
Place:
Debt collectors are not permitted to contact you in strange places like
hospitals, schools or restaurants. You may exercise the right to tell them not
to contact you when suitable. Furthermore, if they are aware of the prohibition
of personal calls at your place of work, they must refrain from doing so.
·
Representation
by attorney: If there is an attorney backing you up
and the debt collector is aware of this, they are obligated to contact the
attorney rather than communicating with you directly. However, if they do so,
you may convey your attorney’s contact details and ask them to forward all
details through them.
Who Else Can a Debt Collector Contact About My Debt?
Although a debt
collector is permitted to contact any of your close relatives or friends to get
through to you, they are not allowed to discuss their debt with anyone besides
you, your significant other and your attorney.
What Can Debt Collectors Talk About?
When communicating
with a consumer, the first thing a debt collector must do is establish
themselves and let the consumer be aware of whom they’re talking to. After
introducing themselves, they must then discuss the debt and disclose that any
information relayed by the consumer will utilized in the collection of debt.
The FDCPA prohibits
any sort of harassment like abusive or improper language. Some examples of
harassment are:
·
Using abusive language
·
Signaling bodily harm
·
Disguising your debt
·
Threatens of arrest
·
Threatens of property
·
Continuous contact
When a debt collector
communicates with you, they are required by law to convey necessary details
about the debts, such as:
·
The name and detail of person you owe
·
The amount of debt
·
Your rights if you decide to dispute
the debt within 30 days
·
Knowledge of your rights to demand the
contact information of your lender, if you dispute it within 30 days
If the debt collector
fails to offer all this information, they are then obligated to send you a
writing document in the span of five days.
How Much Can a Debt Collector Demand of You?
A debt collector can
only discuss the debt, the fees and the charges. Any additional payments lying
out of the set limitations is a violation of the law.
What Are the Ways I Can Dispute a Debt?
If you find an error
in the demand of a debt, you may file
a dispute against the error. If you do this within 30 days
of receiving the collection notice, the debt collector cannot communicate with
you during the time. If, however, you fail to file the dispute the claim in the
given time, the collector may till contact you during the process of
elimination.
What Is a Debt Verification Notice?
A debt verification
notice is the written evidence given by the debt collector replying to your
claim disputing the error. It constitutes all the necessary details of you and
your debt. Debt collectors are required to convey this letter to you, in
confirmation of your dispute. The subjects in this letter are:
·
The amount of debt owed
·
The name of the lender
·
A statement giving you the information
of your lender, if you ask for it
The debt verification
notice is designated to offer you all the necessary details of your debt and
give you a chance to verify it. The notice consists of the following
information:
·
Identity
theft: If the reason you are disputing the debt is
identity theft or fraud,
the debt verification notice will contain a duplicate of the original contract.
·
Debt
amount: If the amount of debt is the reason for your
dispute, then the notice must include details of the payments and any
additional charges.
Keep in mind that if
you demand a debt verification notice, all debt collection activities must be
stopped and conveyed to you until your demand is fulfilled. Id this is
performed during the 30-day time period, then they are clearly violating the
FDCPA, which is why a record of all happenings must be kept.
Can I Ask a Debt Collector to Cease Communication?
The FDCPA gives you
the right to request the debt collector from contacting you. You must make this
request via mail or in writing. However, the best way to send the request
through writing to ensure that the records contain the letter.
After this, a debt
collector is only permitted to contact you to inform that they are concluding
all communication or any further steps to be taken.
How Long Can a Debt Collector Seek a Former Debt?
Majority of debts have an expiry, generally
ranging from three to seven years. After which the statute of limitations
concedes that the creditor cannot pursue your debt any longer.
Although the creditor
can seek you personally seek the debt from you, they can no longer ask the
court to take legal action.
What Is the Time Limit of the Statute of Limitations?
The exact time period
of the statute differs by location, meaning that the statute depends on where
the debt was incurred. It also depends on the nature of your debt. It always
advised that you contact an attorney
specializing in debt law. There are plenty of resources that aid you in your
search for an appropriate attorney and the general mode of action.
Do I Restart the Statute of Limitations by Disputing a Debt?
No, the only thing
that can restart the statute of limitations is if you admit to the debt or make
any payments to the debts. Other practices like the application of a payment
plan or agreeing to a settlement offer from the debt collector can play a role
in restarting the statute of limitations.
Although the
investigation of your debt will not restart the statute of limitations,
agreeing that the debt is yours will. It is vital that you are vigilant in your
conversation with the debt collector, to ensure you are not giving them any
sensitive information. Moreover, it is useful to employ a debt collection law
firm to help guide you through the process.
How Do Debt Collectors Affect My Credit?
Any overdue or pending
payments can have a negative impact on your credit
score. Potential creditors need to validate your
responsibility and they do so through your credit score.
When you have debt in
collections, it is assumed that the original creditor understood that you did
not mean to pay the debt and sent it off to a collection agency. Credit bureaus
classify these debts depending on how late they are, ultimately deciding your
credit score decrease.
These debt collections
are included in your report for seven years, after which the debt is null. The
debts that are most recent have a greater effect on your credit score.
Therefore, there is no specific answer for how
can an unpaid debt affect your credit score, as it is
tailored to your particular case.
Basically, any debt
collection can be heavy on your credit score, which further affects your
ability to process credit applications. Which is why debt collections have been
issued to aid you in the matter and shield you from all risks.
Guiding through
pending debts is no easy work, which is why you must have a deep understand of
all your rights to handle your case properly. It is necessary to ensure you
know how to deal with derogatory
marks on your report.
Law firms like Blackwater
Credit Repair aid you in the process of fighting all
credit errors and dealing will all credit-related activities. Contact our team
today to see how we can help make any credit process easy and efficient for
you.