No one likes to pick up the phone to discover a debt collector on the other line. Debt collectors are those friendly folks tasked with collecting debts that you have not, will not or cannot pay. If you fail to pay back a debt as you initially agreed, debt collectors are most likely going to come calling.
If you’re in the unfortunate situation of having past due debts, the good news is that you can count on federal law to protect you from abusive debt collection practices. Debt collectors have a hard job and they certainly have the right to try to collect the money you owe. Still, that doesn’t mean they’re allowed to behave any way they wish when pressuring you to pay up.
Here is a look at some of what debt collectors can and cannot do, according to the Fair Debt Collection Practices Act (FDCPA).
What Debt Collectors Are Allowed to Do
Call and Write
Although you probably wish debt collectors would leave you alone, it’s not illegal for them to contact you via phone or mail. Debt collectors can even call you at work, unless you inform them that you’re not allowed to receive personal calls on the job.
Sue You and Force Payment
As long as they abide by debt collection statutes within the state where you resided when the debt was initially incurred, debt collectors can and often sue people for unpaid debts. To make matters worse, if a debt collector sues you and you ignore it, the court will enter a default judgment that may eventually grant the debt collector the right to forcibly take funds from you. Debt collectors are not allowed to threaten to sue you unless they intend to do so, so take them seriously.
Report Information to the Credit Reporting Agencies
Debt collectors can also put pressure on you to pay outstanding bills by reporting the negative information to the credit reporting agencies. As long as the information reported is accurate and doesn’t exceed the credit reporting statute of limitations, it is perfectly legal for them to do so in most circumstances.
What Debt Collectors Are NOT Allowed to Do
Attempt to Collect More Than You Owe
“Overbiffing,” or overstating your balance, is a debt collection practice that is prohibited by the FDCPA. Debt collectors are not allowed to misrepresent your account balance nor try to trick you into paying more than you owe. Several state AGs have come down hard on debt collectors who have practiced overbiffing.
Discuss Your Debt with Third Parties
It’s fair game for a debt collector to call your friends and family to try to find you, but they cannot disclose the nature of the call or discuss any debt you allegedly owe. This is formally referred to as “Third Party Disclosure” and it is illegal.
Threatening you with bodily harm, intentional damage to your reputation or arrest are all things that might be considered harassment under the FDCPA. Such behavior is strictly off limits.
Call You at All Hours
Debt collectors are only allowed to contact you during reasonable hours, specifically between 8:00 a.m. and 9:00 p.m. in your local time zone, not their local time zone. If a debt collector calls you at midnight, that person has broken the law.
Should You Pay?
You should always pay your debts. It’s the right thing to do and will help you to maintain a solid credit report and credit scores. Most people don’t take on debt with the intention of avoiding it. You probably intended to make every payment on time, but sometimes unfortunate circumstances or even plain bad planning leads to a situation where you owe more than you can afford.
Nonetheless, your debts aren’t going to go away simply because you can’t afford them unless you qualify for and eventually file for bankruptcy protection. If a debt is legitimate, you should try to find a way to pay it.