If you owe money on a credit card, mortgage, or other loan and fall behind in your payments, you will be contacted by a collections agency or debt collector. This is a third party working on behalf of your creditor to collect your debt. You have rights as a debtor and cannot be mistreated by collections agencies as they seek payment of your debt.

Your rights under the Fair Debt Collection Practices Act

If you owe a personal, family, or household debt, your rights are spelled out in the federal Fair Debt Collection Practices Act. Recently revised in 2006, this law outlines acceptable behavior for debt collectors as they seek to collect money owed. For instance, debt collectors may not do any of the following:

  • Call you before 8 AM or after 9 PM or at work, unless you agree

  • Swear at you

  • Tell people other than you or your lawyer that you owe money

  • Harass you by incessantly telephoning

  • Continue contacting you if you have notified them in writing to stop

  • Lie to you about what they plan to do if you don't pay, or about how much you owe

  • Make threats about harming you, having you arrested, or seizing your wages or property

If you don't pay your debt

If you do not pay a debt you owe, the creditor may put out a lien on your home, and your credit rating will likely be affected. If you are a homeowner, creditors may place a lien on your home. This ensures the creditor will be paid if you sell your home and makes it more difficult for you to borrow against your home.

If you don't owe the debt

If you believe you do not owe the debt, you can write the debt collector within 30 days of being notified about the debt. The debt collector is then required to stop contacting you. However, the collection effort may be renewed if they send you proof of the debt, such as a copy of the bill or mortgage.

If you owe the debt but are treated unfairly

If you feel you are being abused by a debt collector, you can sue the debt collector for actual damages plus court costs, attorney's fees, and up to $1,000. You can also file a complaint with your state Attorney General's office and the Federal Trade Commission (FTC). Each state has its own laws, and your state Attorney General can help you determine your rights.

Additional resources:

Consumer complaint form

The law governing third-party debt collection

Federal Trade Commission information on fair debt collection

The Association of Credit and Collection Professionals -How to File an Ethics Complaint

Related Legal Guides:

Debt Negotiation

Bankruptcy or Debt Negotiation: A Comparison

Debt Settlement Tips