If your bank or lender thinks you are falling behind on payments, you may be receiving calls from a debt collector. These persistent calls can make a challenging financial situation even more stressful. 

Understanding your debt collection rights is the first step in gaining control when you are on the receiving end of these calls.

Who is a Debt Collector?

A collector might be an individual, an attorney or a company, who typically receives a payment from your creditor for collecting on your overdue payments. This third party collector collects debts owed to your creditor.

What are Your Debt Collection Rights?

  • Debt collectors may not call you numerous times a day about an unpaid debt. This is considered a form of harassment by the Federal Trade Commission (FTC)
  • A debt collector may not use threats or profane language.
  • Debt collector must send a written statement outlining the specifics of your debt in collections.
  • A debt collector must cease contact with if you send a letter requesting that they do so. If you believe you do not owe the money, state this in your letter. Be aware that a legitimate debt will not go away simply because the collection calls stop.

What is the Statute of Limitations on a Debt?

Every state has a statute of limitations that limits how long a creditor or debt collector can successfully collect a debt. Typically, the statute of limitations starts when you miss your first payment with the original creditor, not when the account was placed for collection.

If a debt collector tries to sue you after this time period has expired, you can raise the SOL as a defense against the lawsuit. 

Can you Sue a Debt Collector? 

Yes, debt collectors can be liable for trying to collect old debts.  In 2011, in the case of Gonzales v. Arrow Fin. Servs., LLC, a $225,500 judgment was upheld against a debt collector who sent collection letters implying that payment would affect a consumer’s credit report.  However, the debts were more than 7 years old, which by law cannot be reported on a credit report. 

Additionally, a debt collector violates the Fair Debt Collection Practices Act by threatening to sue on a consumer debt after the statute of limitations has run and bars the suit.  

Accounts in collections will affect your credit, which will impact any future loans or lines of credit you attempt to get.  If you need help settling debts and putting a stop to harassing phone calls, give me a call or email me today.

-Erik Kaplan

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