2010/08/25

Debt Collecting – 5 Frequently Asked Questions

There are certain laws in the United States of America that have defined which practices are allowed and which ones are prohibited when it comes to debt collecting. As per the Fair Debt Collection Practices Act (FDCPA), the Federal Trade Commission (FTC) prohibits collection agents from using deceptive, unfair, and abusive practices against consumers. Debt collectors, as defined under the FDCPA are all those people and organizations that are legally authorized to collect debts from borrowers. Besides collection agencies, this may also include companies that are in the business of buying delinquent debts and then collecting the same and even the lawyers who do such collections on a regular basis. Following are five frequently asked questions regarding the provisions covered under this Act.

Does It Cover All Types Of Debts?

The laws and regulations introduced by FDCPA do not apply in cases where you owe certain debts resulting from the loans you borrowed to run a business. The debt collecting laws are applicable only to household, family, and personal debts, such as a mortgage, a medical bill, an auto loan, and a personal credit card account.

When And Where The Collection Agents May Contact You?

The collection agents may not contact you after 9 O’ clock at night and before 8 O’clock in the morning. They must first get your permission before making a call at inconvenient times. Besides that, if your work place does not allow you to get calls there and if the agents are told about it (either in writing or orally), they may not contact you while you are at work.

Can Collection Agents Contact A Third Party About Your Debt?

As per the , collection agents are allowed to contact third parties but only to find out some basic information to locate you, such as where you work, your home phone number, and your address. They cannot discuss your debts with third parties. Besides that, it is also important to note that they may contact any third party just once only. They may discuss your debt with only three people – you, your spouse, and your lawyer (if any).

Is There A Way To Stop Collection Agents From Contacting You?

When an agency contacts you regarding the collection of debts, you are advised to first talk to them and try to get the matter resolved. If that does not work and you decide that you do not want them to contact you (by phone calls, at workplace, or by any other means), you can simply make a request in writing. Once the agency receives a written request, they must stop all communications with you except in cases where they have to send a legal notice. Make sure you get a “return receipt” as a proof that you have filed a written request to stop the agency from contacting you and that the agency has received it.

Can A Collection Agency Garnish Your Wages Or Bank Account?

agencies may not garnish your wages or take money directly from your bank account without a court order. If you fail to make the repayment for the debt, the creditors or the debt collectors have to follow a certain procedure regarding wage garnishment. They generally will first file a civil lawsuit against you, and if the court makes a judgment against you, they may get the right to take money directly from your employer, your bank, or any third party as part of debt repayment (as per the terms made in the garnishment order issued by the court).

It is important for you to keep in mind that the debt collecting laws prohibit garnishment of federal benefits, such as compensation for death or injury, Foreign Service Retirement and Disability Benefits, Merchant Seamen Wages, Railroad Retirement Benefits, Student Assistance, Military Annuities and Survivors’ Benefits, Service Members’ Pay, Veterans’ Benefits, SSI (Supplemental Security Income) Benefits, and Social Security Benefits. The only exceptions when even these federal benefits may be garnished include those circumstances where you are liable to pay for student loans, child support, alimony, and delinquent taxes.

Filed under Debt Collection Harassment, Debt Consolidation