1. Responding to debt collectors
Chapter 8
Responding to
debt collectors

2. Do Not Let Collectors Pressure You!!
It is important not to let debt collection harassment force you into making decisions that will hurt you later. ** Make choices about which debts to pay based on family needs instead of which creditor is pressuring you the most.
Try to keep in mind that as bad as you may feel, you are not a deadbeat when circumstances outside your control prevent you from paying your debts.
You have no moral obligation to pay one debt before you pay another debt, particularly when the debt you do pay is more central to your family’s survival.

3. What Debt Collectors Can Do to you: Collectors cannot legally do much to harm you
Unsecured Creditors can…
1. Stop doing business with you.
For example, a credit card issuer can cancel your card or a dentist to whom you owe money might refuse to let you continue as a patient.
2. Report the default to a credit reporting agency.
The fact that you are behind on your bills almost certainly will end up on your credit record.
The collection agency threatening to ruin your credit is almost always bluffing. Creditors routinely report delinquent debts to the credit bureau. The damage is, most likely, already done.
3. Begin a lawsuit to collect the debt.
This is the threat that may worry you the most, but the threat of a lawsuit may be much less serious than you imagine. The threat of a court action by an unsecured creditor is not nearly as real or dangerous as the threat of eviction by a landlord or foreclosure on a mortgage.

4. 8 Different Ways to Stop Debt Collection Harassment
Heading off harassment before it happens. While you should pay your most important bills first, you should not totally ignore any of your bills, such as by tossing a series of warning letters in the trash. Consider calling your creditor before the creditor refers the debt to a collection agency to explain your situation.
Writing a cease letter. Assuming you called the creditor or collector and didn’t get anywhere, the simplest strategy to stop collection harassment is to write the collector a cease letter. Federal law requires collection agencies to stop their phone calls and letters after they receive a written letter to stop.
Sending the Lawyer’s letter. You do not need a lawyer to send a cease letter. However, if a cease letter does not stop the harassment, then a lawyer’s letter usually will.
Negotiating work-out agreements. Negotiating with creditors and collection agencies. Probably the most common consumer strategy to deal with debt harassment, though not the best, is to work out a deal with the collector.

5. 8 Different Ways to Stop Debt Collection Harassment
5. Raising complaints about billing errors and other defenses. Collection letters often contain errors, sometimes misstating the account number or the amount due, or billing the consumer instead of his or her insurance company. When a collection letter contains a mistake, write a request for correction. 6. Complaining to a government agency. Another strategy is to write to government agencies responsible for enforcing laws that prohibit debt collection abuse, like the Federal Trade Commission or your state’s attorney general’s office. 7. Filing bankruptcy. Filing your initial papers for personal bankruptcy instantly triggers the “automatic stay”. This automatic stay instantly stops all collections against you. 8. Suing the debt collector for illegal conduct. Federal and state fair debt laws provide consumers with strong protections from debt collection harassment. Debt collection agencies often break these laws because they know most consumers don’t know about their rights and will not sue.

6. Illegal Debt Collection Conduct – Debt collectors can not do …
The major law dealing with illegal debt collection conduct is the federal Fair Debt Collection Practice Act (FDCPA). The protection of the FDCPA applies regardless of whether you want to pay money back and regardless of whether you owe the money. This law applies only to debt collection agencies and attorneys, and generally does not apply to creditors collecting their own debts.
Debt collectors are required by law in all circumstances to respect your privacy and avoid using deceptive, abusive, or harassing collection tactics.

7. The FDCPA requires the following:
1. The collection agency must stop contacting you if you make a request in writing or if you dispute the debt in writing. 2. The collection agency, in its initial communication or within five days of that communication, must send you a written notice. That notice must identify the debt & the creditor and must explain your right to dispute the debt or to request the name and address of the original creditor, if it is different from the current one. 3. Any lawsuit by a collector must usually be brought in the same county or other judicial district where you reside or signed the contract.

8. Debt collectors can not do … The FDCPA prohibits the following:
1. Communicating with third parties- such as your relatives, employers, friends, or neighbors-about a debt unless you or a court has given the collector permission to do so.
2. Communicating with you at unusual or inconvenient times or places. The times 8:00 A.M. to 9:00 P.M. are generally considered convenient, but daytime contacts with a consumer known to work a night shift may be inconvenient.
3. Contacting you at work if the collector should know that the employer prohibits personal calls or contacting you at other inconvenient places, such as a friend’s house or the hospital.

9. Illegal Debt Collection Conduct - The FDCPA prohibits the following:
4. Using obscene words, or insulting remarks; Publishing your name; Telephoning repeatedly and frequently after you say you cannot afford to pay or do not owe that debt. 5. Making false or misleading representation. 6. Threatening arrest or loss of child custody or public assistance benefits. 7. Stating that nonpayment will result in arrest, garnishment, or seizure of property or wages, unless such actions are lawful, and unless the collector fully intends to take such action.

10. Illegal Debt Collection Conduct - The FDCPA prohibits the following:
8. Collecting fees or charges unless expressly authorized by the agreement creating the debt and permitted by law.
9. Depositing post-dated checks before their date.
10. Creating the false impression that the collector is an affiliate or agent of the government.

11. Suing Debt Collectors for Their Illegal Conduct
Why sue the debt collector?
Debt collection harassment is illegal and you can be compensated for any injury suffered.
What you can sue? Suing for all your actual damages plus up to $1,000 and your attorney’s fees for collector misconduct.
Even when you are subjected to only minor forms of illegal collection action, you can sue the collector and recover up to $1,000 and all of your attorney’s fees for any violation of the FDCPA.
How can you find an attorney to sue a debt collector?
It is not always easy to find an attorney to handle an FDCPA claim.

12. Suing Debt Collectors for Their Illegal Conduct
What should you tell your attorney?
Once you find an attorney, your job is to document the extent of collector misconduct and the impact on your family.
Out-of-pocket losses should also be listed, ranging from loss of employment to loss of wages, because of time taken off from work to try to resolve the dispute.
Keep a record of all expenses related to the collection effort.