The idea that someone can knock on your door paying you a visit about that outstanding debt you have to repay can be formidable, if not scary. However, consumer debt collection is a routine affair common to many people. The whole process of personal debt collection is just a nice way of putting attempts at recovering outstanding loans. If you have been contacted with regards to a debt you owe, you should know a few things before you find yourself facing debt collectors.
To start with, there is much solace to be drawn from the fact that in the United States, all consumer debt collection is governed by the Fair Debt Collection Practices Act that is enforced by the Federal Trade Commission. The Act demarcates clears “Dos” and “Don’ts” for debt collection by enlisting consumer debt collection laws. In fact, the Federal Trade Commission has a web page that answers frequently asked questions about debt collection. Here is a link to that page: https://consumer.ftc.gov/articles/debt-collection-faqs
While you will find all the fine print on the Commission’s web page, there are a few consumer debt collection rights that you must know right off the top of your mind. Here is a brief list of such rights:
1. Validation notice: When a debt collector first contacts you s/he must supply you with a validation notice within the next five days. This notice must include the amount of money you owe to the creditor and the name of the creditor. Further, it must also include steps that you may take if you think that you cannot repay the amount.
2. Contact hours: A debt collector may not contact you at unseemly hours. The Fair Debt Collection Practices Act has details of when a consumer debt collection request may be made. It includes restrictions on timings – a debt collector may not contact you before 8 am or after 9 pm; restrictions on place – similarly, s/he may not contact you at your work place, if you so request them.
3. Stopping debt collectors: If you wish not to be contacted with regards to the debt, you can request the debt collector to stop any communication with you. As a part of consumer debt collection law, the debt collector must honor such a request. You can read the full text of consumer debt collection law at this link on the Federal Trade Commission’s website: https://www.ftc.gov/system/files/documents/plain-language/fair-debt-collection-practices-act.pdf (PDF File)
Statute of limitations
Each debt has a statute of limitations which differs from state to state. Some states have it as three years from the last activity on the credit report, while some others have it over ten years. That is to say that after a prescribed period has passed without any activity on the debt in your credit report, a debt may no longer be collected. From the point of view of consumer debt collection, this means that debt collectors may no longer bother you with collection requests.
This is an important thing to know since collectors often press you into paying up even after the statute of limitations has passed. If you so much as make a promise or sign a deal to repay the debt later, the statute of limitation is rendered null and the clock starts again from zero. Therefore, be careful about dubious threats of a lawsuit if you are sure that the statute of limitations has passed.
The finer details
If you have an outstanding debt for some time now, chances are that you will face personal debt collection pretty soon. It is necessary to keep your calm through all proceedings, and if possible get your attorney to handle all interactions with your debt collector. If you can’t afford an attorney, be sure to maintain meticulous records of all communication in regard to the debt collection. Debt collectors often file lawsuits as an intimidating tactic, especially if they know you can’t afford a lawyer. In such an event any wrongdoing by them may be proved if you have the said records in order.