What Debt Collectors Can and Cannot Do
Debt Relief Attorney Serving Illinois
For several reasons, a financial crisis may strike anybody at any time. Your finances may have spun out of control because you lost your job, got divorced, or had a health-related problem. Even if you just fell behind a little at a time and now your credit card debt has taken over your life, filing for bankruptcy may provide you with a fresh start. Bankruptcy is a bad word for many people, and it should be avoided at all costs. However, the fact is that bankruptcy may be a helpful instrument for reorganizing your finances.
At Cutler & Associates, we realize that declaring bankruptcy may allow you to discharge most or all of your debts, including tax bills owing to the IRS (IRS). Our attorneys have years of combined expertise and are prepared to assist people, families, and businesses achieve financial stability via bankruptcy. Our Chicagoland bankruptcy lawyers provide compassionate, cost-effective guidance before, during, and after the bankruptcy process.
Are Debt Collectors Legal?
Debt collectors and creditors are not the same things. Creditors, such as hospitals, credit card companies, mortgage lenders, and others, are the ones that sell your debt to collection agencies. These companies acquire your debt for pennies on the dollar and profit off the money they can get from you. And they have the legal authority to do so.
What debt collectors can do to you is they might pursue you for payment, whether it’s a six-figure medical bill from an emergency operation or an automobile you couldn’t afford. What isn’t lawful are some of the practices used by some debt collectors, such as intimidation and threats.
What Are the Things Debt Collectors Can Do?
Seek Payment on an Expired Debt.
A statute of limitations applies to all unsecured obligations, such as credit cards and medical expenses. The debt “expires” after this date, and you can no longer be sued for payment. However, you still owe it, and debt collectors can pursue payment for these old debts.
Because they can’t threaten you or deceive you, what debt collectors can do to you is pressure you to pay. This pressure can take the form of daily phone calls, letters, or threats of filing a lawsuit to collect the debt – as long as they keep within the law.
Sue You for Payment on a Debt.
As a final resort, debt collectors might sue you for payment on a debt. Because most debtors fail to appear in court and lose by default, these cases frequently end in wage garnishment, bank levies, or both.
Sell Your Debt.
If a collector cannot collect on a debt, they may resell the balance if only partial payment has been received. So don’t be startled if one debt collector stops contacting you about a debt and another begins. If you pay off a loan in full, make sure you acquire a written agreement to verify it.
Negotiate What You Owe.
Debt collectors make a lot of money if they collect the total amount owed since they acquire debts for pennies on the dollar. It offers them greater leeway when it comes to negotiating payment from customers. You might be able to negotiate a settlement for 25% or 30% of what you owe. Get the arrangement in writing once again, so you have confirmation that the debt was paid in full for the agreed-upon settlement amount.
What Are the Things Debt Collectors Can’t Do?
Visit You at Your Workplace.
It is illegal for a debt collector to go to your workplace to collect money under the Fair Debt Collection Practices Act (FDCPA). The statute makes it illegal to make your debts public, and it also makes it unlawful to show up at work to collect your debt. It implies that debt collectors won’t be able to bother you at work.
What can debt collectors do to you, such as a credit card firm, is they can call you at work, albeit they cannot divulge that they are debt collectors to your coworkers. To stop these calls, ask the debt collector not to contact you at work. They must stop, according to the law.
Harassment from a debt collector can come in many forms:
- Repeated calls
- Threats of violence
- Publishing information about you
- Abusive or obscene language
All of these are illegal under the debt collection practices act.
Arrest You for Debt.
A debt collector cannot arrest you for a debt you owe. If a debt collector sues you for a debt and you fail to appear in court, you may be found guilty by default and required to pay. If you ignore the court order, the collector may seek an arrest warrant against you.
Pursue You for a Debt You Don’t Owe.
Inaccuracies abound in the debt collecting sector. Due to incomplete or erroneous paperwork, a debt collector may pursue the wrong person for payment or the correct person for a debt they have already paid. It is a frequent problem, but it is also illegal. Start by reviewing your credit record if you have any doubts about a debt you’re being requested to pay.
Call You Whenever They Want.
If you’re wondering when a debt collector can contact you, you should know that they can’t contact you before 8 a.m. or after 9 p.m. You can also ask a debt collector to cease phoning or writing to you in an attempt to collect on a debt. However, you must continue to pay the loan.
Contacted by a Debt Collector? What Are Your Rights as a Debtor?
Knowing your rights might give you a sense of power. It might provide you with all the information you want — as well as a boost of confidence — to deal with any valid debt that has been placed in collections.
Right to a Written Notice Explaining Your Debt
When a debt collector calls you, you should first confirm that the debt collector and the debt are both authentic. Keep in mind that a debt collector’s phone call isn’t enough. According to the FDCPA, debt collectors must submit the following information in writing within five days of first contacting you:
- The amount of the debt
- The name of the creditor you owe
- That you can dispute the debt
- A declaration that the debt collector will presume the debt is valid until you dispute the debt or any part of the amount within 30 days of receiving notification.
- A declaration that the debt collector must give documentation of the debt if you challenge it in writing within 30 days.
- A statement that if you contact the debt collector in writing during the 30 days that the debt (or any portion of it) is disputed, the debt collector will get proof of the debt.
- If you request the information in writing within 30 days, you will receive the name and address of the original creditor (if it is different from the current creditor).
There are two exceptions to this five-day deadline — if the information is contained in the initial written communication or you’ve paid the debt already.
Right to Know the Debt Collector or Debt Collection Agency
Debt collectors are required under the FDCPA to identify themselves when attempting to collect a debt and tell you that any information you provide will be utilized to collect the debt. They must also provide you with the name of their firm or agency. Legitimate debt collectors should be able to provide you with a physical address and contact information.
Suppose you have a debt collector’s name and identifying information but are still dubious. In that case, you may be able to learn more about them by contacting your state’s attorney general or consumer affairs agency.
Right Not to Be Harassed
Debt collectors must follow specific guidelines in addition to identifying themselves and informing you that they are seeking to recover a debt. The Fair Debt Collection Practices Act (FDCPA) restricts what debt collectors can do to you while seeking to collect the debt.
Debt collectors typically are not allowed to:
- Contact you before 8 a.m. or after 9 p.m., or call you at work if you’ve told them you’re not available.
- Use obscene words, such as yelling or swearing.
- Threaten you with something they don’t have the legal authority to do.
- Engage in any activity that has the natural result of harassing, oppressing, or abusing somebody in connection with collecting a debt, such as contacting you frequently or dialing you and then hanging up.
Right to Privacy of Your Personal Information
What debt collectors may say or inquire about you to other individuals is limited. (They are also not allowed to contact such individuals more than once.) Typically, this information is confined to:
- Where you live
- Your phone number
- Where you work
Right to Dispute Incorrect Debt
You have 30 days from the day a debt collector initially contacts you to dispute the claim in writing if you feel the debt is incorrect. It would help if you challenged anything you believe is erroneous straight away since the debt collector has 30 days to collect the bill lawfully.
However, if you dispute the debt, the debt collector is required by law to verify the debt before taking any collection action. The debt collector can’t contact you to collect the debt while they’re validating it.
We Are Creating a Better Future
If you face a debt crisis, the last thing you need is another person lecturing you about your finances. We realize that horrible things happen to good people all the time and that you are more than your balance sheet at Cutler & Associates. We treat each client with love, compassion, and dignity as we work to find long-term debt relief and a brighter future for them.
Contact our office to learn more about our firm and our bankruptcy approach. Don’t hesitate to get in touch with our bankruptcy law firm right away. Our legal firm serves people, families, and companies throughout Illinois and the surrounding areas.