Debt Collectors: Defending Yourself

Let's face it: there's a good chance that some of the people visiting this site have already been hit with fallout from the Great Unraveling. Whether they were in over the heads to begin with or have recently lost a job (or suffered some other misfortune), they are probably looking for answers. Under the circumstances, I'm sure at least a few visitors will find the following column from Marketwatch's Marshall Loeb, "What Debt Collectors Can't Do to You," to be of value.

Debt collectors can make your life miserable when you are struggling to keep up with your financial obligations and have fallen behind on some of your debts. However, the federal Fair Debt Collection Practices Act places limits on what they can do to collect the money they say you owe.

In his new book "The Bankruptcy Handbook: Everything You Need to Know to Avoid Bankruptcy, Get Rid of Debt, And Rebuild Your Credit," bankruptcy attorney John Ventura says debt collectors are prohibited from taking these actions:

• Repeatedly contacting you about a debt within a relatively short period of time (during one morning or afternoon) in an effort to wear you down.
• Calling you earlier than 8 a.m. or later than 9 p.m., unless you tell the collector that it's OK to call you then. The FDCPA also prohibits debt collectors from calling you at a time that you tell them is inconvenient, or anytime on Sunday. Similarly, it is unlawful for them to continue to call you if you tell them not to call you anymore.
• However, that does not mean that debt collectors won't continue trying to collect the money that you owe. For example, if you owe a lot of money, they may sue you.
• Calling you at work if you tell them that your employer doesn't want you contacted there, or calling your employer about the money you owe, except in the case of trying to collect past due child support from you.
• Telling your friends, relatives or neighbors that you owe a debt in order to embarrass you into paying it. But debt collectors are allowed to contact them to find out how to get in touch with you -- where you live and your phone number -- although they cannot say why they want the information.
• Sending you information about a past due debt using a postcard or an envelope that clearly indicates that it was sent by a debt collector, or using an envelope that appears to have been sent by a court or by a government agency.
• Using profanity or abusive language when they talk to you or promising to ruin your reputation if you don't pay what you owe.
• Threatening to throw you in jail. You can't be sent to jail for not paying your debts, with the exception of past due court-ordered child support, depending on the state that issued the court order.
• Requiring you to accept their collect calls.

See a related Chuck Jaffe column for one woman's tale of debt-collection harassment.

Comments

[Jes]

Debt collectors may not be allowed to do these things, but I'd be surprised if anyone really keeps much of an eye on them.
Before our landlord was foreclosed on, collection notices addressed to the landlord were arriving at our house. One time a debt collector showed up and handed my daughter a letter, not in an envelope, and he told her to give it to the landlord.
This was rather unnerving on two counts--first that a collector would try to get to a landlord through an unrelated kid, and second that the landlord's private account information was handed out that casually.

[All Your Funds Belong To Us]

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[TheFinancialNinja]

Good thing the banks aren't already f'd. Oh wait.

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[Snappy Tom]

Ahhh, this one is right in my wheel house. I am a debt collector. The list given above is only partial. The Fair Debt Collection Practices Act covers a lot of ground. It is unimaginable to me that there are any collectors who haven't received extensive training on the FDCPA. When I call a debtor my company requires that I give, on every contact, the "Mini-Miranda" ("This is a communication from a debt collector and is an attempt to collect a debt and any information obtained will be used for that purpose. This call may be monitored for quality assurance purposes.")and a warning about monitoring before I even begin talking about the debt. Needless to say I get a lot of hang ups before or just after I finish the spiel. Because you see, many, many people are not interested in paying their debts. Period. Harassment is me reminding them that they owe it. I am monitored at least 5 times a month at random and evaluated on many points. I can be terminated immediately for committing any one of a number of major violations. If, in all five monitors I have a major violation I lose my bonus. Any more than one and I'm likely to end up on probation.

Every day I hear things from plenty of customers and some of my colleagues that make me cringe. A lot of the people I work with and for are young and at times professionalism is lacking. For every one that displays a burst of temper however, there are ten or twelve quietly going about the business of debt collecting. Which after all is simply finding those who do wish to honor their commitments and negotiating payments that work for both parties. My company is very successful.

The crap I hear from customers is simply unbelievable and at times borders on the criminal. They are in many cases proud of what they believe they've gotten away with. Other times I'm talking to people who's lives have been shattered and don't have anything to start over with. The number of elderly people with essentially unpayable credit card debt is mind bending. The number of twenty-somethings staggering under heaps of debt is astonishing.

The credit system in this country has been out of control far longer than since 2005. It goes back at least 15 years before that with the rise of risk-based lending. Credit scoring as the major tool of evaluation as well as mass marketing rather than sound underwritning has caused a consumer credit problem of unbelievable proportions.

I see a debt amnesty program coming down the road. Its at least two years away. The IRS will be the final dispositor of much of the current debt. Right now if you settle a debt for than $600 then you should receive a 1099 for the amount of the settlement over $600. Thats right, undeclared income. That form comes as a shock to many I assure you. I believe that the IRS will end up with most of what will remain of this debt catastrophe, which will only be pennies on the dollar.

Try telling an IRS collector to go to hell.