It’s bad enough to be in debt, and now you must deal with debt collectors who are hounding you nonstop. It’s all very stressful, and you may be wondering what your rights are in this regard and whether debt collectors can hurt your finances. Keep reading for that and more.
What to Do When a Debt Collector Contacts You
You may not want to, especially if the debt is legit and you can’t pay it, but if a debt collector contacts you, do not ignore them. In fact, you should get in touch with the collector as soon as possible, even if you don’t owe the debt. Otherwise, the collector will continue efforts to get you to pay up. They may report negative info to credit reporting agencies, and they may even sue you.
If you do receive a summons informing you that a debt collector has filed suit against you, don’t ignore that, either. Doing so may result in a default judgment against you, and subsequently, the collector can garnish your earnings and bank accounts. So, be sure to respond by the date noted on the summons so that you can have your day in court. If you can, this is a good time to get an attorney, or at least consult one.
Federal Law and Debt Collection
You do have protections under the Federal Fair Debt Collection Practices Act (FDCPA), which establishes debt collector conduct. For example, a collector is not allowed to call you before 8 a.m. or after 9 p.m. unless you give them express permission. Further, they may not contact you at work if you have told them not to, either in writing or verbally. If the collector continues to phone you at work, let them know via certified mail that they have breached the federal law.
By law, you can also demand via certified mail — return receipt requested — that the debt collector stop calling you altogether. Keep a copy of the request and return receipt for your records. The rub here, though, is that the debt doesn’t disappear just because you longer hear from collectors. If the debt is valid, you certainly still owe it. If you need help paying it, contact Achieve.
If you dispute the debt, send a letter by certified mail. You must do so, however, within 30 days of the collector’s initial notification. If the debt collector does not verify the debt, they must cease contacting you.
In addition, a debt collector is not allowed to:
- Phone you over and over with the aim of annoying you. Collectors are also not allowed to harass you or use threats of physical violence.
- Tell you lies or knowingly mislead you. For instance, they may not tell you that you’ll go to jail over your debt, or that they work for a credit reporting agency.
- Falsely tell you that they will seize your earnings or assets.
- Falsely inform you that they plan to file a lawsuit against you.
- Send you paperwork that resembles court or government documents.
- Falsely say that they represent a specific company if they do not.
Debt Collectors and Scams
If a debt collector engages in any of the above illegal behavior, you may be dealing with a scammer. Bad actors may also pose as attorneys, court officials, or members of law enforcement or a government agency. At times, they may even tell you that police are poised to arrest you today if you don’t pay up.
What you can do on your behalf is take notes of every interaction with the purported collector, including what time the call came in and the name of the collector.
Take copious notes of interactions and include the alleged collector’s name and company. It’s also a good idea to reach out to your creditor directly about the call to be certain the person who contacted you is on the up and up. Moreover, legitimate collectors must, within five days, follow up their first phone call with a written notice of the debt. If you don’t receive such a letter, you’re probably dealing with someone who means you harm.
So, can debt collectors hurt your finances? Scammers can, of course, but so can bona fide collectors, in that they can sue you and possibly take money out of your paychecks and bank accounts. If you are in over your head in debt, particularly credit card debt, you may need debt settlement. For that, we recommend Freedom Debt Relief.
Alex is fascinated with “understanding” people. It’s actually what drives everything he does. He believes in a thoughtful exploration of how you shape your thoughts, experience of the world.