Technically, debt can be sent to collections without any prior notice. In a few cases, you won’t even realize that the debt is in collections until you check your credit report. One such example is medical debt.
When a debt is sent for collections, it implies that it has been erased off the books of the original creditor. Then, it is reported as a collection amount on your credit report, which could be a blot on your credit history.
Fair Debt Collection Practices Act (FDCPA)
The Fair Debt Collection Practices Act, popularly known as the FDCPA, is a federal law that needs debt collectors to stick to the standard, non-abusive practices stipulated. Its purpose is two-fold.
- It is designed in such a way that it offers legal protection to consumers from unfair debt collectors or collection practices.
- It also offers protection to reputable debt collectors so that they are not at a loss when compared to people who engage in abusive debt collection practices.
Thus, it is extremely important for you to know the FDCPA in detail and understand your rights before you begin dealing with debt collectors.
Who Can These Debt Collectors Contact?
In case you have not informed the debt collectors that an attorney is representing you, debt collectors can contact you. Otherwise, they are required to contact the attorney. They might also contact other people to get hold of details like your contact information, residential address, and place of work. However, it is worth noting that the FDCPA prohibits collectors from disclosing the details of your debts to other people.
When Can Debt Collectors Contact You?
As per the rules of the Federal Trade Commission, debt collectors cannot contact you whenever they wish. However, there are some limitations; these include:
- They cannot reach out to you via phone before 8 am in your time zone (unless you have agreed to the same).
- They cannot reach out to you via phone after 9 pm in your time zone (unless you have agreed to it).
- They cannot reach out to you while you are at work and you or somebody else tells them that you cannot take calls in there.
What To Do If You Receive A Letter From A Debt Collector?
When you receive a letter, the first thing to do is thoroughly check the letter for all the necessary information. As per the rules of the FDCPA, a legitimate letter sent by the debt collector should include the following:
- A clear statement that the letter has been sent in an attempt to collect the debt amount.
- Notice period of 30 days to dispute the validity of the debt.
- Explicitly state the amount you owe.
- Provide the name of the original creditor.
If the letter you have received does not contain any of this information, the debt collector can be said to have violated the rules and regulations of the FDCPA.
What To Do If You Do Not Owe The Debt?
If you do not owe the debt, you can send the collection agency a letter disputing the validity of the debt within 30 days of receiving the debt collection letter. If you have responded within 30 days and the company has failed to send you a proof of the debt, it should cease all forms of communication with you.
If You Owe The Debt.
In this case, the first and the best thing to do is pay off the money and take the burden off your shoulders. This way, you can stop the debt from being reported to the credit bureaus. If not, you can talk to the collection agency and try to work out a payment plan with mutual understanding and agreement. However, make sure to get this done in writing.