"Debt Collection Practices"

April 27, 2012

Although we do see some hopeful signs, we are still dealing with a struggling economy. Many people still find that they are facing a mountain of debt and are unsure the steps to take when confronted with collection efforts. 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 basic facts and some tips to help navigate through this tough time.

The FDCPA
The Fair Debt Collection Practices Act (often called the "FDCPA") gives you specific legal rights when dealing with debt collectors.  It allows you 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.

One example of conduct that is illegal under the FDCPA is a debt collector contacting your place of employment in an attempt to collect the debt. A debt collector cannot 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. Bottom line is that no employer enjoys the thought of paying you to sit there and take calls about your overdue debts all day, so this type of action is clearly prohibited.

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 30 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 30-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.

HELPFUL TIPS

  • If you are being harassed by a creditor, keep an accurate record of the contacts.  Save phone messages, keep letters, keep a detailed list of the times the calls were received and the content of the conversation, and other communications from the debt collector.
  • Make no statements and don’t agree with anything without first speaking to an attorney to find out your options. Many times it is tempting to try to negotiate your way out of a debt, and collections 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.
  • Each time a debt collector contacts you, he must give you what is known 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, however, "Mini-Miranda Warnings" have nothing to do with criminal law.   A "Mini-Miranda Warning” must contain the following words (or words imparting this meaning):

"Hello, I am _________(name of collector). I am (or this office is) a debt collector representing____________(name of the 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:
  • 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.
  • Discuss anything with a collector unless you want to;
  • Answer a phone for a collector (this works with caller ID).
  • Speak with the collector if you do answer the phone.
  • 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).
  • Discuss information about your personal and financial affairs (you do not have to disclose private information about assets or income).
  • You, or an attorney acting on your behalf can send the creditor/collection agency a “cease and desist” 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, they cannot legally contact you.  They must speak with your attorney.
  • Also keep in mind that Pennsylvania does not allow wage garnishment except in the case of child support or tax debt.  You do not have to worry that your paycheck will be attached to satisfy a debt incurred by credit card.

If you need a lawyer, you can call the Allegheny County Bar Association’s Lawyer Referral Service at 412-261-5555 or you can visit PittsburghLawyerFinder.org, the association’s new, free online service.