Handling Harassment From Collectors & Resolving Debt Part 1

Do you feel depressed, have a pile of unpaid bills, receive collection calls and as such dread answering the phone? Do these drive sleep from your eyes?

Does any of the above mentioned sound familiar to you? If yes, then perhaps this article will be of help to you. Start by coming to terms with the fact that you are not the only one in such a situation. It is also important to know that there is a silver lining in every dark cloud.

My article should not serve as a legal advice but as an information source for alerting you of your lawful rights. This may actually take you to the right direction. Considering that this post is primarily aimed at inhabitants of Jacksonville, my source will be the Florida Statutes. I will endeavor to explain the rights you have with the enforcement of the Fair Debt Collection Practices Act (FDCPA). This law was enacted in 1977 in a bid to put an end to abusive debt collection practices. I will here quote the State Attorney General for Florida: “How to protect yourself: Debt collectors/consumer source: Office of the Attorney General for Florida”.

Maybe you have questions on debt collection when a debt collector contacts you, i.e. someone who is always trying to collect debts owed to creditors. A collector generally contacts you when you are late in the payment of a personal loan; family loan or household debt. He/she may also contact you when there is an error in your account. The collector may use telephone, telegram, fax or mail to contact you. Nevertheless, a collector is not supposed to contact you at an unreasonable frequency that may be considered harassment. Also, the collector is not required to contact you during certain hours (before 8 am and after 9 pm) and at certain places.

The collector must send a written note 5 days after the earlier contact to remind you of the amount you owe. This note should also state the creditor’s name and the action you will have to take if you think you do not owe the creditor. It is possible to stop a collector from contacting you by writing a letter to the agency and telling them to stop the contact. When the agency has received this letter, they are not allowed to contact you again unless when they wish to notify you of no further contacts or to notify you of a particular action that the creditor intends to take against you. In case you do not owe any money you will be able to contact the agency telling them that you do not owe any money.  After this, the agency is not allowed to contact you again unless they are forwarding you proof of the debt or the bill copy.

A collector is not allowed to abuse or harass any individual. For example, a debt collector is not allowed to threaten a person on their property, or their reputation. They are also not allowed to use bad language, make a public show of the debt or make use of false statements like: implying that they are lawyers when they are not, or that they operate from a credit office or also wrongly representing your debt, or stating in a subtle manner that documents sent to you are of a legal nature when they really are not. They are not allowed to tell you that you would be arrested if you fail to pay or that they will garnish, seize, sell or attach your wages or your property. This could only be done is the agency or the creditor in question plans to make such a move and also has a right to do this. The collector may not also tell you that a lawsuit will be filed in against you when they do not have the right to file or if they do not intend to do so.

In case you have any questions with regard to whether the contacting collection agency is a properly registered one, then you would want to file a complaint to the Federal Trade Commission, Correspondence Branch, Washington, D.C. 20580 or the Attorney General’s office.

You could also file a suit against the agency for the violation of federal and/or state law. In case you win, you could be awarded a damages fees and costs. The protection that the collector mentioned is from FDCPA which in turn is not a Florida law but a Federal law. The law has laid down harsh penalties for debt collectors (i.e. the main collector or the agency or company under which he/she works). This implies that you are not obliged to accept collection harassment or insults or threats about being jailed, wage seizure, criminal charges, etc.  Such treatment is not your portion and you are not obliged to put up with it.

When you believe a collector is abusive, pick out one of the following options:

1. Get in contact with the head or owner of the company/agency. The person on the phone is most often an employee that works per hour. Generally, higher ups want to comply with the law in order to avoid lawsuits against them.
2. A request could also be sent by you, that you not be contacted anymore to that effect. You have to do this by certified mail with a return receipt to ensure that you hold proof that you actually told them not to call you again. You must only make such a request after repeated incidents. This is because one collector may be rude while the next is not. I have done collection for several years now, and I often got calls when the person was very annoyed due to the last caller the spoke with. However, with consistent work we were able to get into a mutually agreeable solution to the problem. So don’t consider that since the last person was rude, the next person will be. A good number of collectors endeavor to adhere to the law. However, you have the right, under the law, to do this.
3. You could make an effort to contact the Federal Trade Commission (http://www.ftc.gov).
4. You should simply ensure that you don not take abusive habits. Keep in mind that they are not allowed to harass you. A call every 3-7 days cannot be considered harassment. Repeated calling on the same day is considered collection harassment, calling earlier than 8 am and later than 9pm is also against FDCPA. An attorney is the best person to determine when it is.

Maybe your problem doesn’t lie in harassment or abusive practices. You are aware of the fact that you owe a debt but money is tight. Let’s take a look at the options you have. A debt could either be secured or non-secured. A secured debt is assured by an asset while an unsecured debt is a credit card or a similar account.

When it is a secured loan, the creditor has the right to possess the secured asset when you don’t pay. You could also be eligible to receive the balance of what the creditor sells the assets for. An unsecured loan goes past due until when it is charged off. This implies that the creditor will have to clear it off the records as an asset. They do not just wipe it off and then the debt is cleared. They generally send it to a debt collection agency for recovery or to an attorney in charge of debt collection to handle the case. The choice is that of the creditor, he/she decides the action to be taken.

Your options reviewed

1. Open communication should be maintained between you and the creditor. They are willing to work in order to resolve the situation. It won’t help you or them if they have to report your car or charge your account. When you run into any issues make sure to inform them of it.
2. Do not commit for something you will not be able to fulfill. When it is impossible to make a commitment to pay a certain sum then don’t say you will. Creditors are in the habit of keeping track of how often you break promises and this sometimes influences their later actions.
3. A few creditors allow you to skip 1 or 2 payments and then integrate it to the loan balance. Every creditor has rules relating to this.
4. Non-secured creditors generally have a particular plan with which they operate. The common one is the ‘reage’ or ‘cure’ plan. For example, your monthly payment is $60; you are behind by 3 months and you still do not have the cash to catch up. With this plan you will simply resume the $60/month payment and 3 months later your account will become current. This implies that the report at the credit bureau will state that it is current and will no longer be receiving late payment charges as it is no longer considered late. Make sure to enquire from your creditor if they run a ‘reage’ plan. It may be named otherwise.
5. Each and every single credit card company has minimum payment rates that usually amount to 2.5% of the balance with any additional over-limits. I have met people who got behind and their credit was affected by this. An example Credit limit balance Payment % MIN+ ovrlmt 1000 1100 3.0 $34 $134. The payment requested by the credit card company in this example is $134. The debtor could get this and not be able to pay the $134. Instead they end up paying nothing. As such their account goes past due.

The statement that follows is even higher considering that there was no payment the month before and this implies more over-limit due to finance charges, over-limit fees and late fees. But if the debtor had paid in the $34 (4% of the balance) the account would have stayed current and not gone past due. The over-limit fee would still have been applicable but with no late fee as it is still current on payments. Verify your cardholder agreement to know the percentage of the minimum payment.

I know this has been quite lengthy but I equally hope it was of great help. I’ll be writing other articles under this series and make sure to refer anyone you think this might help to this site.