Debt can accumulate for a myriad of reasons, such as having multiple credit cards or lines of credit. As debts accumulate, consumers can find it difficult to make the monthly payments, especially in cases involving mounting medical bills. When consumers miss payments, default on loans, and get behind on bills, debt collectors step in to recover those debts.
Typically, the creditor will initially attempt to collect the debt themselves. After months of missed payments, the debts are frequently sold to collection agencies that take over efforts to recover what is owed. When agencies take over the loan, their debt collectors are often quite aggressive in their tactics to force consumers to pay. However, do not be fooled, collectors are regulated against such tactics. You, the consumer, have rights when it comes to debt collection and the methods used.
What Practices Are Debt Collectors Allowed and Not Allowed Do?
Regardless of the type of debt incurred, consumers do have rights when it comes to the practices collectors use to recover that debt. If you are dealing with collectors who are harassing or threatening you, it is imperative that you understand your rights and what collectors can and cannot do.
Collectors are required or allowed to:
- Provide validation information: Collectors are required to provide you with information about debts in the first phone call with you or in writing within five days of first contacting you. They are required to provide the creditor’s name, the amount owed, information on how to find the name of the original creditor, and how to proceed if you think the debt is an error.
- Garnish wages: Debt collection lawsuits can result in the court issuing an order allowing the collector to legally garnish a portion of your paycheck to pay the debt. Additionally, collectors can also petition the court for an order to take money directly from your bank account to cover the debt.
- Accept your choice: If a collection agency is trying to recover payments for multiple debts, they are required to apply any payments to the creditor of your choosing. Collectors are not permitted to determine which debt receives the payment.
- Multiple contact avenues: Collectors are allowed to contact you in multiple ways, including phone calls, letters, emails, and text messages.
Consumers are protected by federal law from abusive debt collection practices under the Fair Debt Collection Practices Act (FDCPA). Personal, family, household, credit card, auto, medical, and mortgage debts are all covered by the FDCPA. Under the law, the following tactics are illegal if used to collect a debt.
The FDCPA prevents debt collectors from harassing consumers through the following:
- Repetitive phone calls with the sole purpose of abusing, harassing, or annoying the debtor to collect the debt. Also, collectors are not allowed to contact you at unreasonable times of the day.
- Demanding payment that is more than the amount owed.
- Use of obscene or profane language, derogatory comments, or accusations.
- Threats of violence or harm to force consumers to pay.
- Contacting you at your place of business.
- Disguising their phone number to avoid identification.
- Fail to disclose the statute of limitations on the debt.
- Publicly publishing lists of consumers’ names except to credit reporting agencies.
- Making contact without identifying themselves and company they represent.
- Contacting you directly after you have retained a lawyer and provided the collector with their contact information.
The FDCPA dictates that collectors cannot use deceptive, false, or misleading practices that misrepresent the debt, such as:
- Amount owed.
- Claiming to be a lawyer or representative of a law firm if they are not.
- Falsely threatening arrest.
- Threatening illegal actions to recover the debt.
- Any other false threats of action that the collector has no intention of taking.
Debt collectors are forbidden to engage in unfair practices to collect the debt, such as attempting to collect interest above what state law and the contract stipulates, depositing post-dated checks early, or threats to repossess property when they are not legally permitted to do so.
Garnish Federal Benefits
Generally, federal benefits are exempt from garnishment except for taxes, child support, alimony, and student loans. Collection agencies are not allowed to garnish benefits, such as:
- Social Security.
- Supplemental security income.
- Veteran funds.
- Federal student aid.
- Military annuities and survivor benefits.
- Office of Personnel Management.
- Railroad retirement.
- Federal emergency disaster assistance.
It should be noted that the FDCPA does not protect consumers against debt collection practices related to debt incurred while operating a small business.
When dealing with debt collectors, maintain all letters and documents you receive and copies of all documents and letters you send. Note the date and times of conversations and items discussed during phone conversations or record the calls. This information will be crucial to your lawyer or the court and can help if you dispute the collector.
The Pennsylvania Fair Debt Collection Practices Act (PFDCPA) extends further protection for consumers against abusive collectors at the state level in addition to the federal act. Pennsylvania also prohibits collection agencies from engaging in unfair or deceptive collection methods, attempting to collect more than the amount owed, and coercing or intimidating in order to recover the debt.
What Happens to Any Previous Debt?
Previous debt generally does not expire, but the amount of time a debt collector has to sue you does. Debt collectors are bound by a statute of limitations based on the date you first miss a payment. Once the legally determined statute of limitations has run out, the unpaid debt is considered “time-barred,” meaning debt collectors can no longer sue you, or threaten to sue you, to collect the debt.
This does not mean, however, that they are required to stop any other efforts to collect the debt. Some states have deemed it legal for debt collectors to continue contacting you by phone, letter, or email in continued efforts to collect the debt. If your state does not permit contact following the statute of limitations, report creditors who are continuing to pursue you for the debt.
The statute of limitations varies by state and the type of debt owed and resets each time you make a payment or acknowledge that you owe the debt in writing. Your debt will no longer be considered time-barred, and the collection agency is permitted to sue you again.
In order to determine whether your debt is time-barred, ask the collection company what date you last made a payment in their records. You can then find out the statute of limitations requirements by contacting the state’s Office of Attorney General.
Time-barred debt may continue to be included in your credit report, typically for seven years. This negative information will affect credit scores and could prevent creditors from approving additional loans or lines of credit. The same is true if you decide to settle the debt for an agreed-upon lesser amount. Though it is paid, some creditors continue to report it as negative information for not paying the debt in its entirety.
Should a creditor file suit against you in order to collect the debt, or if you think the collector is violating the law, it is in your best interest to consult a lawyer with experience in debt collection who can advise you of the best way to proceed and who can protect your rights.
Pennsylvania Debt Collection Lawyers at East End Trial Group Can Help You in a Debt Collection Lawsuit
Climbing out of debt is a daunting task that can take many years, damage your credit, and make you a target of disreputable debt collectors using aggressive tactics against you. If you are being harassed by a debt collector, being sued for a debt, or believe you are wrongfully accused of a debt, one of our experienced Pennsylvania debt collection lawyers at East End Trial Group can help. Call us at 412-223-5740 or contact us online to schedule a free consultation. Located in Pittsburgh, we serve clients throughout Pennsylvania.