Debt Collection
Unmanageable debt can creep up on anyone. A single financial setback — a lost job, unexpected home repair, or a medical emergency — can quickly wipe out savings. You may be forced to take out high-interest loans and credit cards. With service fees and interest payments, the amount of the debt can begin to grow faster than you can pay it off.
The stress of living with debt and overdue payments can become overwhelming. You may have a mailbox full of bills and constant telephone calls from debt collectors. It may feel impossible to get the weight of your debt off your mind. You may even receive notice of legal action pending against you because of the debts.
But debt collectors must follow certain rules under state and federal laws. You may have legal options if debt collectors violate your rights. Talk to a collections law attorney for legal advice about your options against unfair practices by creditors.
What Are the Sources of Consumer Debt?
Consumer debt is a serious concern for many Americans. From the time you turn 18 years old, lenders are offering you low-introductory rate credit cards, discounts for store cards, and the chance to buy something on credit. Some of the most common sources of debt include credit card debt, auto loans, and student loans.
Other types of debt may be beyond your control. According to the U.S. Census Bureau, 19% of U.S. households carry medical debt. The median amount was $2,000, but some people are hundreds of thousands of dollars in debt for necessary medical care.
What Do I Do if Debt Collectors Keep Calling Me?
If you fall too far behind on your bills, the original creditor you owe money to may sell your debt to a third-party debt collector. Debt collection agencies will then try to recover the debt from you. In many cases, these debt buyers will contact you relentlessly to get you to agree to make payments to them.
However, there are rules that debt collectors need to follow when they call you. These mandates come from the federal Fair Debt Collection Practices Act (FDCPA). Unfortunately, many don’t follow the rules.
The FDCPA prohibits debt collectors from doing the following:
- Call you at unusual or difficult times, such as early in the morning or late at night
- Tell anyone other than you, your lawyer, or a related collection agency that you owe a debt
- Threaten you or use profane language
- Call excessively to annoy or harass you
- Keep contacting you after you send a written notice for them to cease, with a couple of exceptions
If a debt collector breaks these rules, you can submit a complaint about the behavior to the appropriate government agency. This may include the Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), or your state’s attorney general.
You may have grounds for a civil lawsuit in cases of debt collector harassment if you can prove financial damages. You can file a lawsuit as an individual or as a larger class-action lawsuit.
What Do I Do if a Debt Collector Tries To Sue Me?
If you refuse to pay a debt, the debt collector may try to sue you for the money owed. How you respond to the lawsuit could impact your case. If you want to know about your legal rights in a collection claim, talk to a lawyer for advice.
First, find out whether there is an actual lawsuit. Companies may start by sending a demand letter telling you what you owe and when they expect payment. A demand letter will often say that there will be consequences for not complying with the demands. They may threaten legal action, but the letter is not notice of an actual lawsuit. You may have more time to figure out your situation.
Once a lawsuit has been filed, you’ll be served with a formal complaint. After you are properly served, you only have a short window of time to respond. Failure to respond on time could result in a default judgment. With a default judgment, the other party wins automatically and can garnish your wages or freeze your bank account.
When responding to a complaint, it’s often in your best interest not to admit to any fault or agree to pay any specific amount at that time. Your answer to the complaint can become part of the case against you.
Instead, you may be able to challenge the debt against you. The collection agency may have transferred hands so many times that the creditor does not have verification of the debt or even the name of the creditor. If the creditor takes too long to file a lawsuit, the claim may be outside the statute of limitations and you won’t owe anything.
Do I Need a Lawyer for Debt Collections?
Working with an experienced legal professional who understands debt collection under federal and state laws can help you better handle collection activities. Your lawyer can negotiate with the creditor, build your case, and fight for you in court to help you get the best outcome possible. Know your rights and contact an experienced lawyer to help you deal with debt collection.