When you are behind on your debt payments, every ring of the phone can fill you with dread. While there is no magic wand to make your debt disappear, there are some steps you can take to protect your rights when dealing with a debt collector.

The Fair Debt Collection Practices Act (FDCPA) enforced by the Federal Trade Commission regulates debt collectors. Certain behaviors are not allowed under FDCPA. A debt collector is not allowed to call you during unreasonable hours; too early or too late at night. Once you request, by phone or in writing, that they not call your place of employment, collectors are no longer allowed to use that method of contact. Under no circumstance can a collector use threats, intimidation, deception or false representations to seek repayment. Your state may have further regulations regarding debt collection.

Collectors must inform you that they are calling to collect a debt. If you believe you don’t owe the debt, or, don’t owe it to the collection company that is contacting you, you can request that the creditor verifies the debt by sending a Debt Validation Letter.

Requesting validation sets a time sensitive process in motion. According to the FDCPA, the creditor has to suspend all collection activities until it has sufficiently answered your request. In order to document the date they receive the letter, you should send it, return receipt requested, signature required.

The Consumer Financial Protection Bureau has sample Debt Verification Letters available on their website.
If you don’t respond to or communicate with the debt collector, they can contact other people to try to find your address, phone number or work location, however; they are not allowed to disclose that they are calling to collect a debt. To avoid this potentially embarrassing situation, it is generally advised that you talk to the debt collectors on a regular basis.

Eventually, a debt collector may file a lawsuit to collect the debt. It is important that you respond to the suit in a timely manner and completely. A collector will always win an uncontested case! Once a collector has won a judgment against you, they may garnish the funds awarded from your bank account or your paycheck. Again, talking to the collector regularly--and making any payments you can--may help avoid this action.

If you believe a collector has violated the FDCPA, you can report them to your state Attorney General’s office, the Federal Trade Commission and the Consumer Financial Protection Bureau. You may even sue the collector within one year from the violation. If you are successful, you may win $1,000 or more if you have proven damages such as lost wages. The court fees and attorney costs are also reimbursable. However, the violation doesn’t void the original debt.

More information is available at these websites:

Federal Trade Commission
FDCPA

If you are new to Debt Free Fanatics, and want to learn more about techniques for getting out of debt, we encourage you to register and participate in our forums. Our members have been managing their money for years and are happy to offer advice and instruction on how you can manage your money better and get out of debt.