What to Do When Debt Collectors Come Knocking
Are you covered by the FDCPA?Federal, state and municipal laws, such as the Fair Debt Collection Practices Act (FDCPA), among others, place restrictions upon the collection of both consumer and even medical debt. The FDCPA, for example, regulates consumer debt collection by debt collectors, including attorneys. Consumer debt includes personal, family and household debt, such as one incurs in the purchase of a car, in the use of a credit card to purchase retail products, even in first and second home mortgages.
What the law requires of the debt collectorAny debt collector, including an attorney, must, within five days after the communication with you, the debtor, provide you with a "validation letter." This letter must tell you, at a minimum,
o how much you owe
o to whom you owe it
o that the debt will be assumed valid if you do not dispute it within 30 days
o that if you dispute it, the debt collector will obtain verification of the debt and mail it to you
o the name and address of the original creditor, if different from the current creditor
A debt collector may not harass you. Stop them from doing so.A collection agency might leave insulting messages on voicemail or call all hours of the day and night, or announce themselves falsely to be attorneys and threaten arrest. The collection agency might also call work, telling the workplace a person is "a deadbeat" and otherwise slandering one's good name.
The FDCPA is federal law designed to prevent and punish such harassment. For example, a debt collector can telephone, mail or fax you, but only at times convenient to you, such as between 8 a.m. to 9 p.m. But he may not use insulting language or threaten jail. Nor may he pretend to be an attorney.
Under the FDCPA, one can stop the collection agency from calling by writing the collection agency and telling them to stop calling. Thereafter the collection agency can only write to say that some specific action or no further action would be taken. Of course, one can still be sued on the debt, but in the interim, the telephone calls, under the law, are supposed to stop.
If you are sued, defend yourselfA person must defend himself in the lawsuit. If he fails to do so, the court will most likely enter a default judgment against him. The opposing attorney may then be able to execute on that judgment, even to the extent of attaching the equity he has in his house and cars or garnishing his wages. If the debt is sufficiently old, the statute of limitations may bar suit on the debt. An attorney would have a much better idea how to defend him.
A counterclaim should be consideredUnder the FDCPA, one can sue a debt collector within one year of the date of a violation. If you have incurred any damages, one may be awarded the amount of your losses, an amount up to $1000, and one may be able to recover attorney's fees and costs. If the debt collector is found to have used an unconscionable trade practice under the Connecticut Unfair Trade Practices Act (CUTPA), punitive damages, attorney's fees and costs may also be assessed.
Sometimes the FDCPA does not apply -- careful!Sometimes, consumers receive a letter from a retailer, not a collector, from which a household product was purchased, demanding payment of money owed. Generally, in this case, the FDCPA does not apply because the retailer is collecting its own debt itself. It may be possible to work out terms of payment that are more satisfactory to the debtor, if the retailer is willing to negotiate. Certain other laws may apply, but this must be analyzed on a case-by-case basis.
Don't just give up!When the debt collector calls, one shouldn't think that all is lost. A review of the facts in light of the law will allow anyone to better understand his rights under the law.