| Who is a debt collector? |
A debt collector is a person who regularly collects debts owed to others. A
debt collector is typically a third party to the original credit account
between you and the creditor. Debt collectors are supposed to follow the
collection practices under the Fair Debt Collection Practices Act (FDCPA).
However, some large creditors (banks) have their own in-house debt
collectors who by definition are not debt collectors under the FDCPA. [top] |
| What is the Fair Debt Collection Practices Act (FDCPA)? |
The FDCPA requires that debt collectors treat you fairly, use fair debt
collection tactics, not harass or threaten you. In Oregon, you are also
protected from debt collectors under the Oregon Fair Debt Collection
Practices Act. The federal and the state law both apply to personal, family
and household debts. Examples are car loans, medical services or credit
card accounts. [top] |
| I have debt collectors calling me non-stop 24/7, what can I do? |
Knowing your rights is the most powerful tool you have to protect yourself
from over aggressive debt collectors. Here is a summary of the rights you
have under both state and federal law in Oregon. Debt collectors:
- can only contact you between 8:00 am and 9:00 pm;
- may not continually call your phone number to harass you;
- must identify themselves as a debt collector during a phone call;
- may not use obscene, profane or threatening language;
- cannot contact you at work unless you cannot be reached at home in the evening;
- may not call you more than once a week at work and must stop calling you at work
if you tell the debt collector not to call you at work;
- must mail a notice in writing within five days of contacting you the
first time telling you how much money you owe and the name and address of
the original creditor.
- must verify the debt if you dispute the validity of the debt within
30 days;
- must stop contacting you if you notify them in writing that you are
not going to pay the debt; however, the debt collector may notify you of
potential legal action regarding the debt.[top]
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| What are some examples of what debt collectors are not allowed to do under
FDCPA? |
Debt collectors may not:
- Threaten you with violence or harm;
- Use obscene or profane language; or repeatedly use the telephone to harass or annoy a debtor.
- Threaten to have you arrested if you do not pay your debt.
- Threaten to seize, garnish, attach or sell your property or
you’re your wages unless the collection agency or creditor intends to do so
(remember property is protected by personal exemptions – see page titled
“How assets are handled in bankruptcy” on this site)
- Threaten to sue you, when they do not intend to take such an
action
- Threaten to ruin your credit forever.
- Debt collectors may not make false or misleading statements to you, for example:
- Falsely imply that they are attorneys or represent the government;
- Falsely imply you have committed a crime;
- Falsely represent that they work for a credit bureau;
- Misrepresent the amount of your debt;
- Tell you papers they send to you are legal when they are not; or
- Tell you papers are not legal when they are.
- Debt collectors may not use unfair practices when trying to collect a
debt. For example debt collectors may not:
- Collect an amount greater than your debt, unless otherwise allowed by state law;
- Deposit a post dated check early;
- Use lies to make you accept collect calls;
- Take or threaten to take your property unless your property can be taken legally;
- Contact you by postcard
- Contact you “at any unusual time or place known or which should be
known to be inconvenient.” (For example: if you work night shift sleeping
until 3:00 pm each day and you have asked, or better written a letter to
notify the debt collector that you are a day sleeper, not to be called until
after 3:00 pm and the debt collector continues to call you when you are
sleeping, the debt collector is breaking the law.) [top]
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| What if I have debt collectors calling me right now who are breaking the
Fair Debt Collection Practices Act? |
It is important to keep records of the harassment or unfair practices and
contact an experienced attorney to assist you in filing a lawsuit against
the collector. Our office offers free consultations in these situations. [top] |
| Can a debt collector call my parents, spouse or friends about my debt? |
A debt collector may only call other people to find out where you live, what
your phone number is and where you work. Collectors are usually prohibited
from contacting third parties more than once and in most cases the collector
is not allowed to tell anyone else other than you or your attorney that you
owe money. [top] |
| What do I do if a debt collector tries to make my parents, spouse or
someone else pay my debt? |
Unless the person being pressured co-signed the debt for you, pressuring
someone else to pay your individual debt is probably a violation under the
FDCPA. It is important to contact a lawyer right away. You can also file a
complaint against the collector with the Federal Trade Commission and with
the state attorney general’s office. [top] |
| If I don’t have the money to pay the debt collectors, what can I do? |
It is important to learn your rights to make the debt collector treat you
fairly under the applicable state and federal laws. Some ideas are:
- Prioritize your bills and estimate whether you can pay anything on
the debt either in monthly payments or in a lump sum. Don’t allow yourself
to be talked into send post-dated checks or paying more than you can
reasonably afford. Paying your rent or mortgage and providing the
necessities for your family always come first.
- Don’t tell the debt collector your life story or any more
information than is reasonably necessary.
- Keep your private information private, which means regardless of
what a debt collector may say you are not required to tell them where you
work, what bank your money is in or give them your checking account number.
You don’t even have to give them your cell phone number.
- Keep the call short and stay calm, remember your goal is to
successfully negotiate a settlement on the debt.
- When negotiating with a debt collector it is important to stay in
control and not agree to anything you cannot afford to agree to. Offer less
than you may be prepared to pay knowing what you can pay without taking
necessities away from your family.
- Once you have reached a deal with the debt collector make sure you
have agreed to not only how much you are going to pay but also when and how
you will make the payments.
- Do not make any payment toward your agreement until the debt
collector provides you with a written agreement that clearly spells out all
of the terms and conditions as you understood them during your negotiation.
The written agreement should clearly show the amount you agreed to pay,
whether you will make payments and their amount or pay the amount in one
lump sum, when the payments are due and where you should send them and how
you will make the payments i.e. cashiers check or electronic payments.
- When negotiating a settlement agreement it doesn’t hurt to ask for
an additional concession, namely to remove record of the debt permanently
form the credit bureau records once you have paid as agreed. The debt
collector can only remove the reference that your debt was collected by
them, the collector cannot remove any negative information related to the
underlying debt (the credit card company reported the credit card account
had been charged-off).
- A final piece of information relating to debt settlement is that the
collection agency can report the difference between what was owed and the
actual paid amount to the IRS as income. Typically, this is only reported
if the settled amount is less than $600 than the original debt and you will
receive an IRS form 1099-C, which will notify you that the collector has
reported the forgiven portion of your debt as “discharge of indebtedness
income” to the IRS.
- If you do not have any money after providing your family with basic
necessities and are unable to reach a settlement agreement with the
collectors then you may wish to consider bankruptcy. Please review the page
titled “*What is bankruptcy*”* (link pages together)* and the answer
to question “How do I know if bankruptcy is right for me?” You are welcome
to schedule a free consultation appointment with our office to discuss your
financial situation and available options to relieve the stress associated
with debt collectors. [top]
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| Is it a good idea to send several
months of post-dated checks to the debt collector so I won’t forget to make my payments? |
No, it is never a good idea to write a post-dated check for any reason. If
you decide to write one anyway, then it is important to know that the FDCPA
says that a debt collector must notify you in writing that he intends to
deposit the check within three to ten business days before he actually
does. For example, if you write a post-dated check for October 31, 2007,
the debt collector is supposed to notify you in writing between October 17
and October 26, 2007 that the check will be deposited. [top] |
| Am I responsible for someone else’s debt? |
Only under a few situations can anyone other than the actual debtor be held
responsible for a debt:
- If you live in a community property state, you can be held
responsible for your spouse’s debts incurred during marriage;
- If your divorce decree made you responsible for marital debts;
- If you co-sign a loan and that person stops making payments then the
debt collector can contact you for payment. Co-signers are legally
responsible for paying the full amount owing of any account they co-signed.
Please know that it is quite common for debt collectors to pressure family
members into paying debts they are not responsible for, for example a debt
collector may try to collect a debt that is your spouse’s individual debt or
trying to collect a debt owed by a deceased family member. Contact an
attorney immediately to stop the debt collector from harassing you for a
debt you do not owe.
It is important to remember that a debt collector can only harass you if you
allow it. Know your rights and protect them against abuse by debt
collectors. If you believe that you have been treated wrongly by a debt
collector or are having a hard time negotiating with a collector, you are
welcome to come into our office and our attorney’s will assist you in
protecting yourself against unfair debt collection practices. [top] |