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5 Myths about Debt Collectors

Debt is an unfortunate reality for many Americans. According to a recent study on household debt by the Federal Reserve, there was over $12.25 trillion in outstanding household debt as of the end of March 2016.

When compared to the American population, that’s almost $40,000.00 of debt for every man, woman, and minor child in the country. While the vast majority of this debt is non-revolving—that is, debt that is in the form of monthly installments, such as a mortgage, car or student loan—over 35% of this debt is in the form of a revolving credit line, where credit is always available up to a limit.

While only 5% of this debt was considered delinquent, that equates to roughly $613 billion of debt that is past due.

Although most Americans are capable of balancing a mortgage, student loan, or credit card payment, for some, debt payments can outweigh expendable income. This may be due to a number of factors, including loss of wages due to an accident and unforeseen medical expenses not covered by insurance.

For creditors who have their money at stake, the collection of dues is critical. This is when the phone calls can begin. Many creditors try to work with borrowers to ensure that they can collect money owed, but sometimes, this can be taken to an extreme.

Since collecting debt can require a lot of resources, creditors typically write off past-due debts as uncollectible. After reporting this to credit reporting agencies, these debts are often sold to third-party debt collectors for a fraction of the debt.

These third parties now take on the task of collecting debts from consumers, and many take aggressive action to get their money. If you find yourself in this situation, know that you have rights under the federal Fair Debt Collection Practices Act (FDCPA) and similar state laws.

Here are five common myths about debt collectors and the truths behind them:

1.Debt collectors can call you at any time.

According to the FDCPA, debt collectors can only call you between the hours of 8 a.m. and 9 p.m. in your relative time zone. If you receive calls before or after this range, they are violating federal law. To protect yourself against harassment in the middle of the night, keep a log of any phone calls you receive outside of federally-approved times. Be sure to include the date and time of the call and the name and phone number of the caller. Let them know that calling you outside of appropriate times is against federal law and hang up.

2.Debt collectors can call you at work.

While debt collectors may try calling you at work to embarrass you in front of coworkers, they must cease this practice if you tell them to. Even if you tell them to not call you at work on a recorded line, it’s hard to prove this. In this situation, it’s best to send a certified letter with receipt notice requested. That way, you have defensible proof that you’ve requested phone calls to your workplace to be stopped. If they don’t abide by your request, they are in violation of federal law.

3.Debt collectors can call your family members to pressure you to pay.

Although a debt collector can call members of your family, it can only be to pass along a simple message with a phone number. Some debt collectors may take this as an opportunity to reveal personal information in an attempt to bully a payment out of you, but doing so would be violating your rights to privacy. Your spouse, attorney, and parents (if you’re under the age of 18) are an exception to this privacy rule, but those are the only exceptions.

4.Debt collectors can garnish your wages if you don’t pay.

In order for a debt collector to be able to garnish your wages, they must follow a specific legal path. This includes first suing in court and winning a judgment. If you still don’t pay then, collectors can request a court order permitting the garnishment of your wages. Unless a suit has already been won, debt collectors cannot claim this action. That would be a trick to get you to comply and can be considered a form of harassment. Student loans granted by the federal government are an exception to this process and are a whole different story.

5.You can be jailed for not paying your debt.

Before 1833, people in the U.S. could be placed in jail for not paying debts. Since then, debtors’ prisons have been abolished. Exactly 150 years later, the U.S. Supreme Court supported the notion that prisons for debtors were unconstitutional under the Equal Protection Clause of the 14th Amendment to the U.S. Constitution. This type of threat coming from a debt collector is clearly a bluff, but more appropriately, the crime known as extortion.

Apart from using any form of harassment and abuse against you in an attempt to collect money owed, debt collectors are also prohibited from threatening violence and using profane language against you in their communication.

If your rights under the FDCPA or other state laws have been violated, you are at liberty to file a lawsuit against a debt collector in state or federal court within one year of the date of the violation. Apart from punitive damages, you may be entitled to lost wages and reimbursement for your legal fees.

Debt collection agencies that violate laws using abusive tactics shouldn’t be tolerated. If you or a loved one is the victim of harassment by a creditor or debt collector and believe you are facing unfair practices, know that you have rights that protect you.

At Dolman Law, we understand that debt collection can be stressful for everyone involved, but it should never be abusive. We have experienced and knowledgeable attorneys that can inform you of your rights. Our goal is to ensure that debt collectors don’t get away with illegal actions.

For a free consultation to review your case, please call us at (727)451-6900 or email us through our Contact Us page. We work for you and don’t recover anything unless you do.

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Clearwater, FL 33765