If you owe debts you can't pay and have been on the receiving end of phone calls from debt collectors, you might be considering a step like bankruptcy or figuring out how you can negotiate with debt collectors.
If debt collectors are harassing you while you're attempting to get your finances back on track, it's important to know what they can do and what the Fair Debt Collection Practices Act (FDCPA) won't allow them to try.
What is the Fair Debt Collection Practices Act?
Originally passed in 1996 as an amendment to the Credit Protection Act, the Federal Trade Commission says the act was:
"…to prohibit abusive practices by debt collectors."
As with any act passed by the government, there are several sections regarding different types of debt and the methods debt collectors can use. However, there are some important pieces of the FDCPA that you should know about, so you can stop harassment before it turns your home into a stressful and miserable environment.
You Can't Go to Jail
One of the essential things to know about calls from debt collectors is that they cannot make idle threats, particularly about things like garnishing your wages, suing you, or even putting you in jail.
Today's America isn't one that's full of debtor's prisons, and a debt collector can't put you in jail because you haven't paid a debt. While they can take legal action against you to get a monetary judgment against you, nobody's going to come with an arrest warrant to your home if you don't pay them.
While the Internal Revenue Service might have some tools to put you behind bars if you're committing egregious acts with your taxes, even that occurrence is fairly rare. The government is much more likely to place a lien on your property or garnish your tax returns and wages to get their money.
One of the common methods a debt collector may use to bully you into paying immediately is by telling you that they'll put you in jail if you don't comply. An article on NASDAQ.com about debt collection practices states:
"They also cannot say they will repossess your property or garnish your wages unless they are permitted by law to do and have plans to follow up on the threat. Debt collectors can never threaten bodily harm."
The Feds Go After a Debt Collector
Violations of the FDCPA and abusive debt collection practices are frowned upon by the government so much that the FTC recently sued a debt collector in Texas for violations.
According to InsideARM.com, the complete stated:
"According to the complaint, since at least 2010, CRS’s debt collectors have deceptively told consumers that unless they pay a debt CRS claims they owe, a debt collection lawsuit will be filed against them. In some cases, consumers are told that such a case has already been filed and will lead to adverse consequences unless the debt is paid."
The government's lawsuit seeks to stop the debt collector's conduct and to impose civil penalties upon the abusive collection company.
States are Adopting Consumer Protections
In New York, the state's Department of Financial Services recently expanded upon regulations defining when debt collectors must cease collection activity. According to an article in the New York Law Journal:
"New York state court administrators said Tuesday they have finalized rules designed to ban the collection of debts that consumers did not incur, have already paid off or which have been extinguished by the passage of the six-year statute of limitations."
One of the reasons the state's lawmakers decided to change the rules is because of the many lawsuits fed through the court system in the state have ended up as default judgments based upon incomplete or erroneous documents.
Nationwide, it's incredibly common for debt collectors to file a collection lawsuit without having proof of ownership of the debt, as well as based upon documents that aren't admissible in court. Unfortunately, the majority of consumers are unaware of their rights or the civil rules in their state which guide admissibility of evidence.
States like New York and California are often first to pass laws that end up sweeping across the country, so it's possible that these rules will soon be seen in other states like Illinois.
Do You Have Questions About Your Debts?
If you're trying to figure out how to get your life back on track and are being harassed by debt collectors, we can help you understand your rights, as well as your best options for getting out of debt. You'll want to download our Free eBook: 12 Things You Should Know Before Filing Bankruptcy.
DISCLAIMER: All information on this website is provided for informational purposes only and is not intended to be construed as legal advice. Suburban Legal Group PC shall not be liable for any errors or inaccuracies contained herein or any actions taken in reliance thereon.