Many people have been affected by the struggling economy and have turned to various forms of credit extensions such as personal loans, credit cards,and second mortgages. While these measures often provide short term ways to cover financial needs, due to their high interest rates and often predatory tactics, consumers find themselves unable to repay the money they have borrowed in a timely fashion. This usually results in accounts being sent to collection agencies and numerous calls and letters being sent to the consumers home. Unfortunately, many creditors use such underhanded tactics such as calling early in the morning or late at night, contacting consumers at their jobs or even seeking out friends and family members in order to embarrass the consumer into paying what is owed. While indeed, you are obligated to repay money that has been lended, many harassing tactics used by creditors have now been ruled illegal and if you are subject to them, you have legal recourse.
The Fair Debt Collections Practice Act
The Federal Trade Commission (FTC), the nation’s consumer protection agency, prohibits creditors from using deceptive or abusive practices to collect from consumers. Under the Fair Debt Collections Practice Act (FDCPA) anyone who regularly collects debts owed to others whether they are a lawyer, collection agency, or other company may not contact you before eight in the morning or after nine at night; you are also allowed to inform creditors , either orally or in writing not to contact you at your place of employment.
If You Are Being Contacted By Creditors
The first step a consumer should take if being contacted over debit is to speak to the creditor to see if you are able to come to an agreement regarding repayment terms; if you truly cannot pay at the present time, many creditors will agree to a small extension or a lowered payment. Remember, most creditors simply want the money back, not to endlessly pursue consumers, although it can understandably feel that way to consumers who feel under siege and overwhelmed by their debt. However, if you are unable come to a satisfactory resolution by speaking to a creditor and they begin harassing you, you can send a certified letter stating that you no longer wish for them to contact you. Be aware, however, that once this chain of events is started, the company may choose to file a lawsuit against you to collect the debt, which could possibly end up awarded and enforced by way of garnishment. Weigh your options regarding your own unique situation and decide which course of action is best.
In some cases, consumers who do not owe any debt end up being contacted by creditors either through a case of mistaken identity, or sometimes because someone known to the consumer has opened a line of credit in their name. If this is truly the case, you have the right to immediately inform the creditor of this (in writing). You will likely need to pursue other legal or civil measures, however, to clear yourself of this mistaken debt.
Off Limit Practices For Creditors
You have probably heard the occasional news story of a consumer being contacted by a creditor who leaves outlandishly threatening, abusive messages regarding their debt, sometimes similar messages are also sent to the spouse, friends, or neighbors of the consumer. This type of behavior is no longer legal and creditors may not do the following:
- use threats of violence
- use obscene language
- publish a list of debtor’s names
Make False Statements
- falsely claim they are attorneys
- claim you have committed a crime
- misrepresent what you owe
- say the papers they have sent are legal forms if they are not
- say they will seize your property or garnish you if they have no legal grounds to do so
Use Unfair Practices
- collect interest or fees on top of the amount you owe, unless permitted by law
- deposit a post-dated check early
- contact you by postcard
- threaten to illegally take property
While garnishment generally can be avoided and is usually a ‘last resort’ measure, occasionally creditors do take consumers to court over their debts. If you end up with a garnishment against you, a third party such as your bank or employer will be forced to turn over part of your funds to begin satisfying the judgment. Certain federal benefits, however, are exempt from garnishment such as
- social security benefits
- veteran’s benefits
- military annuity and survivor’s benefits
- supplemental security income benefits
If you feel you have been a victim of unfair collection practices or are being harassed by creditors, consult with an attorney to see what can be done to remedy the situation. This may include contacting the FTC and other consumer protection bureaus, or even filing suit against the creditor is the situation has involved truly illegal tactics. Ultimately preventing judgments and garnishments will be the goal of your attorney and he or she can help you decided the best course of action to take.