Our nation's consumer protection agency, The Federal Trade Commission (FTC)
is the enforcer of the Fair
Debt Collection Practices Act (FDCPA)
. This Act
forbids debt collectors from practicing unfair, deceptive, or
abusive tactics in trying to collect outstanding debt.
If you are in foreclosure because you are behind on your
mortgage payments, chances are that your are also late on your other
financial obligations. Your phones are probably ringing off
the hook from collectors auto-dialing your number to get a hold of you
to ask for payment. To reduce the stress and fear, you must
learn your rights as a consumer and the laws that protect you form
unfair practices by your creditors.
Debt collectors include lawyers who are collectors, collection
agencies, and companies whose business is to buy outstanding debt for
the purpose of collecting more than what they purchased the debt for,
and making profit.
Debt Collection Laws Overview
1. Types of Debt Included
The types of debt under the FDCPA are household and personal debts such
as auto loans, medical bills, credit card debts, and mortgages.
2. Debts Not Included
Debts you accumulated running a business is not included under the
FDCPA. So if you have business loans, collectors may be more
aggressive pusuing their collection activities with you.
3. Time and Place of Collection
Debt collection laws forbid collectors from contacting you before 8
a.m. and after 9 p.m., which are considered inconvenient times of the
day, unless you permit your collectors to do so.
Collectors will also try to contact you at your place of work, but if
you tell them verbally and/or in writing that you are not allowed to
take their calls there, the collectors must stop contacting you at
work. If they fail to comply, you can file a complaint with the Federal
Trade Commission (FTC) and also with your State Attorney General's
. They will enforce debt collection laws,
exercise appropriate penalties, and take corrective action against the
4. How to Get Debt Collectors to Stop
Debt collectors will try to make contact with you every which way they
can, and will at some point connect with you. Depending on
what your plans are for repayment or extinguishment of your debt, you
may choose to communicate with the collector regarding the resolution
you've chosen, or you may ask them to stop contacting you all together.
You may do so via a certified letter with a request for a
return receipt. Make sure you make copies of any
correspondence with your collectors and file everything in a safe
After you write your collectors to stop contacting you, they may not
contact you again except
for two reasons
: 1) to tell you there will be no
further contact, or 2) to let you know they are taking legal action
against you. They can do this because you still owe them the
money and they can still sue you for payment of your debt.
5. Debt Collectors Contacting Other
People About Your Debt
Yes, debt collectors can contact other people about your debt.
They may contact your attorney if you are represented by one.
They may also contact other people, but according to debt
collection laws, they may only do so to collect information such as
your address, home phone number, and your place of work.
Collectors are not allowed to contact third parties more than once and
they are not allowed to talk about your debt with them. The
only third parties they can discuss your debt information is with your
spouse and your lawyer.
6. If you Get Sued
If you get sued by a debt collector for non-payment of a debt, you or
your lawyer must comply with the instructions to respond within the
specified amount of time (usually within 30 days) in order to preserve
your rights and avoid a default judgment.
7. When a Debt Collector Violates Debt
If you have clear evidence that a collector has practiced illegal
collection practices with you, andyhou believe that they have violated
debt collection laws, you can sue your debt collector in a
state or federal court. You must do it within one year of the
violation. If you prevail, the court can order your debt
collector to pay you for damages you've suffered like medical bills and
loss of wages. The court can even order your debt collector
to pay you $1000 although you aren't able to prove that you suffered
actual damages. Class action suits against a debt collector
are also allowed and if the suit prevails, plaintiffs may collect up to
$500,000 or one percent of the debt collector's net worth, which ever
is lower, plus attorneys and court fees.
Please note that your debt does, if you owe it, does not go away even
if your debt collector was in violation of debt collection laws from
8. Choice of Which Debt to Apply
You are allowed to choose which debt to apply your payments if a debt
collector is attempting to collect for more than one delinquent
account. Your collector must follow you instruction for
payment, and take care not to apply any payments to any debt you do not
think you owe.
9. If You Don't Think You Owe the Debt
You can ask your debt collector to produce a verification of the debt,
and if you don't think you owe all or a portion of the debt in
question, per debt collection laws, the collector must stop all
collection activities at that time. You must send your
written request for a verification within 30 days of the validation
notice. This is a notice that states the amount you owe.
They must send it to you within 5 days after their first
contact with you. Please note, that your collector can start
collection efforts again once they send you a written verification of
10. Allowed Garnishment
Creditors have the right to sue you for debt that you owe. If
they win, a judgment is entered against you for the amount owed.
In order to collect, the creditor can obtain a court order to
garnish your bank
. A portion of your compensation is
withheld by your employer to pay off your debts according to the court
11. Garnishment Exemptions
The following are exempt from being garnished by debt collectors:
Return from Debt Collection Laws To Foreclosure Help Center Homepage
- Student Aid or Assistance
- Wages for Merchant Seamen
- Veteran's Benefits
- Military Annuities and Survivor Benefits
- Civil Service and Federal Retirement and Disability Benefits
- Social Security Benefits
- SSI Benefits
- Service Member Wages
- Railroad Retirement Benefits
- Longshoremen and Harbor Workers Death and Disability
- FEMA Federal Disaster Assistance
- Compensation for Injury, Death, or Detention of Employees
of U.S. Contractors outside of the U.S.
- Foreign Service Retirement and Disability Benefits