Know your rights in debt collection

The following information was discussed by Attorney Whitney Hughes on the May 20, 2008 edition of Legal Briefs on KDKA's Pittsburgh Today Live.

Know your rights in debt collection

Common Questions

We hear it everyday—foreclosures and sheriff sales are on the rise and consumer debt is at an all time high. Bankruptcy laws can be confusing and it may take some people a significant amount of time to gather the filing fee.

If you are continually receiving delinquency notices and debt collectors are always calling, here are some commonly asked questions and some tips to help navigate through this tough time.

I was one month late in making my car payment. Now the financing company is calling every day. Yesterday they threatened to contact the police and report the car as stolen because I’m not paying for it. What can I do?

First and foremost, you cannot be jailed for being late on a payment. The conduct that you describe is absolutely prohibited by law.

The Fair Debt Collection Practices Act (often called the FDCPA) gives you specific legal rights to sue debt collectors who unlawfully threaten, berate, intimidate, or harass you; call you during odd hours; make false representations about the debt or their intentions; or otherwise act in ways proscribed by the act.

False statements include threatening to take action such as contacting the police when they are unable to do so.

I am so embarrassed! I owe a credit card debt to a local store, and they have started calling me at work. They even told a co-worker that I'm a deadbeat. I'm getting so many of these calls, my boss is really starting to get angry. Is there any way to stop this?

This is another type of debt collection practice that is illegal under the FDCPA. A debt collector can not communicate with a consumer in connection with the collection of any debt at the consumer's place of employment if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication. The bottom line is that no employer enjoys the thought of paying you to sit and take calls about your overdue debts all day, so this type of action is clearly prohibited.

I received a letter in the mail telling me that I owe a debt from about 13 years ago when I was married to my first husband. I don't remember this, but it wouldn't surprise me. It's not a lot of money, and I can afford to make payments. Should I just offer to do this to get them off my back?

Absolutely not! The FDCPA requires that within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall (unless already provided in the initial contact), send the consumer a written notice containing (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; and (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt is disputed, the debt collector will obtain verification of the debt. This basically means that if you don’t remember this debt, you have the right to ask what it’s about and get answers to those questions.

In addition to this, many states, including Pennsylvania have statutes of limitation which apply to lawsuits to collect a debt. If the debt is very old, in this case 13 years, it would be barred. HOWEVER, if a collection agent calls you regarding an old debt that is barred by the statute of limitations and you VOLUNTARILY agree to begin making payments, the person holding the debt may now sue you for failure to make payment on this new agreement. Agreeing to make payments gives them a second bite at the apple.

I received a call from a collection agency which says they will garnish my wages if I fail to pay the debt. They have told me that I can resolve this by giving them my bank account number and having them withdraw a partial payment. Is this a wise thing to do?

Another common misconception is that if you owe a debt or have a judgment against you that the person/company holding the debt can garnish your wages. Pennsylvania does not allow wage garnishment except in the case of child support or tax debt.

In addition to this, NEVER give anyone your bank account information. Not only does this put you at risk for identity theft, it also gives a creditor access to personal banking information which may work to your disadvantage later on.


  1. If you are being harassed by a creditor, keep an accurate record of the contacts. Save phone messages, and keep letters and a detailed list of the times the calls were received and the content of the conversation.

  2. Make no statements and agree to nothing without first speaking to an attorney to find out what your options are. Many times it is tempting to try to negotiate your way out of a debt and collection agencies will attempt to get you to do so, but it can come back to haunt you later on and may give creditors extra ammunition.

  3. Each time a debt collector contacts you, he/she must give you what is know as a "Mini-Miranda Warning." This warning received that name because it is reminiscent of the warnings that police should give you if you are arrested. A "Mini-Miranda Warning" must contain the following words (or words imparting this meaning):

  4. "Hello, I am _________(name of collector). I am (or this office is) a debt collector representing____________(creditor). Information obtained during the course of this call will be used for the purpose of collecting the debt."

    If the creditor has not been advising you as above, you may have a right to sue. Any letter you receive from a debt collector must have the same type of information as well.

    You do not have to:

    • discuss anything with a collector unless you want to.
    • answer a phone for a collector (this works with called ID).
    • speak with the collector if you do answer.
    • answer any questions at all posed by the collector (collectors will often demand that you rearrange your finances, or cut back on other expenses to pay them; there is no requirement that you justify your lifestyle to a collector).
    • say "good-bye" before you hang up.
    • be truthful about your personal and financial affairs (you do not have to disclose private information about assets or income).

    You do not even need to acknowledge that you owe the money! This is very important if the debt is old. By acknowledging the debt, you may actually extend the time the creditor can sue on it.

  5. You or an attorney acting on your behalf can send the creditor/collection agency a cease- communication letter which invokes your rights under the FDCPA and prohibits them from contacting you or a family member in an attempt to collect the debt. In addition, once you are represented by an attorney and notify the creditor of this, the creditor cannot legally contact you. It must speak with your attorney

As always, for a referral to an attorney practicing in the area of collections or consumer law, contact the Allegheny County Bar Association Lawyer Referral Service at 412-261-5555.