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Debt Collections – Know Your Rights

Dealing with creditors and debt collection agencies is always a difficult ordeal. Their annoying and persistence way of tracking you down no matter where you are can be very frustrating for you, your family and even your fellow colleagues.

Unfair debt collection practices

To protect the overly abused debtors, there is the Fair Debt Practices Act or the FDCPA for short. It is a federal law that bans unfair debt collection practices which will affect the quality of debtors' life considerably. It is good to know the common illegal debt collection practices so that you will not be intimidated and know how to deal with them.

Contacting third parties including your families, friends, neighbors or employers about your debt is illegal. Unless the court has given them permission for your creditors to do so, it is illegal for debt collectors to contact third parties about your debt. But they may contact third parties for the purpose of locating you. Even so, creditors must not reveal why they are looking for you, unless you are a minor.

Contact with you cannot be made at odd hours of the day, such as late at night or too early in the morning. Under normal circumstances, any time between 8am to 9pm is an acceptable time for them to call. Under no situation should your creditors call you when you are sleeping, for example at 3am.

Contacting you repeatedly by phone or not identifying themselves when they called is not permissible. Debt collection companies cannot continue to contact you when you are represented by a lawyer or when they have received a written request from you to cease contacting you. Making threats, using obscene, profane or abusively languages and comments are clearly offensive practices.

Debt collection companies also cannot mislead you that they are affiliated with any state or federal government, or the legal status of your debts.

Using a Cease and Desist Letter

One of your rights is sending a cease and desist letter to stop the harassing phone calls and threatening letters. There are two types of cease and desist letters: a full and a partial or limited cease and desist. The full cease and desist letter instruct the debt collector to stop any communication. A partial cease and desist asks the collector to keep all their communication in writing as phone calls are deemed as inconvenient for you.

Getting help from credit counselors

A recent option you have, if you are in debt, is to acquire the services of a credit counselor or debt management system. These people will work directly with the credit collection companies for you in order to get your interest rates down, the late fees to stop, and the phone calls to stop. You will sign over your interest in this particular debt to the credit counselor and let them take it from there.

The Fair Debt Collection Practices Act is there to protect you while going through this process. Familiarizing yourself with this act and ending the phone calls through one of the above mentioned methods will restore peace to your life.

Responding to Debt Collectors within the First 30 Days

The ideal time to dispute a debt is within the first 30 days after you receive the initial letter from the debt collector. The Fair Debt Collection Act refers to this 30 day time-frame as the verification period. During this period, you don't need a valid challenge to dispute the debt. It's allowable for you to simply ask the debt collection company to affirm that you really owe the debt. The validation request is important request because it puts the burden of proof on the collector. In other words, the debt collector must produce verification to prove that you own the debt. If no verification can be provided, no action can be taken to collect from you.

Dealing with Debt Collectors after the First 30 Days

If you miss the first 30 day period, you can still dispute the debt. A valid dispute outside the 30 day time period still forces the debt collection company to describe your debt as disputed. Avoid producing a flippant dispute because you may undermine any upcoming lawsuit you may file.

No later than 30 days after the debt collector gets your dispute, the debt collection company must reply in writing denying your dispute, admitting the dispute, or requesting an extension of the time for their investigation. If they acknowledge your dispute, they must correct their records and send a notice of the inaccuracy along with a copy of the corrected information to each agency to whom they generated a report of the inaccurate record. If they request additional time, they must correct their records to conform to your request and give notice of the correction to each agency to whom they reported the disputed information. The debt collector may resume collection efforts only after his investigation is complete and he has found the information to be correct.

There are some debt collection companies who take their jobs very seriously, but completely ignore regulations designed to protect consumers. They will do or say just about anything to get their clients (debtors) to repay their debts. Debt collectors are typically hired by lenders to attempt to collect a debt on their behalf, although sometimes, debt collectors are another department within the same company. It is up to you to find out how the law protects you - and what to do if a debt collector is in violation of any of these provisions.