WHEN IS DEBT COLLECTION ILLEGAL?
If you fall behind on paying your bills, know your legal rights if you confront debt collectors.
POSTED: 2014-08-16 15:47:02
According to a study recently released by the Urban Institute about 35% of consumer debtors have unpaid bills and credit accounts. This means that roughly one of every three persons you see are behind on debt payments and will in most cases become the target of debt collectors. These consumer debts include all types, medical bills, education loans, auto finance loans and of course credit card accounts. Even after a home mortgage loan is foreclosed and repossessed by the lender there is frequently a shortfall by the foreclosure sale proceeds to pay all the mortgage debt. Which leaves a potential deficiency judgment on the unpaid balance of the note. In many states, these deficiency judgments can be prosecuted by a lawsuit on the note after the property is repossessed and sold.
After an account has become a few months behind, the calls from original creditors will stop. Most of the debt collection activity will not come from the original creditor, but rather from a debt collection business that purchases these past due accounts. These are the so called, “junk debt buyers.” The collections industry employs 140,000 workers who recover $50 billion each year, according to a separate study published this year by the Fed's Philadelphia bank branch. It's big business, and it's business is to collect debt, and file law suits to collect the debt by any means the courts will enforce including garnishments on bank accounts and wages.
While some debt buyers are careful to follow the law, many of these “junk debt” collector's actions violate the Fair Debt Collection Practices Act, which is enforced by the FTC and by consumer defense attorneys under the authority of this act. By law, debt collectors may not:
-call you before 8 a.m. or after 9 p.m.
-contact you at work if you’ve told them verbally or in writing that your employer doesn’t allow you to get such calls in the workplace
-contact a third party, such as a friend or non-spouse family member, about you for any reason other than getting your contact information
-harass or abuse you or anyone else they contact about you
-lie about the amount you owe
-use deceptive methods to collect a debt from you. For example, they may not:
--claim to be law enforcement officers
--claim that you’ll be arrested if you don’t pay your debt
--threaten to seize, garnish, attach or sell your property or your wages - unless they are permitted by law to do it and intend to do so
--give false credit information about you to anyone, including a credit reporting company
--use a fake company name.
If you are subjected to any of the abuses above you can and should defend yourself. File a complaint with the Federal Trade Commission, and or, contact a consumer defense attorney.