Our society imposes a rather vicious psychological penalty upon those who cannot pay their debts. This is true regardless of the circumstances leading up to that occurrence. While some people do willfully run up debt and walk away from it, most people simply hit a rough patch and find their incomes won’t cover their day-today expenses as well as their debt. Collections people will inevitably enter the picture at that point, which can leave some people wondering just what can debt collectors really do?
There Are Limits
While debt collectors might lead you to believe they’re all powerful, there are limits to what they can do in pursuit of the debt. The Fair Debt Collections Practices Act (FDCP) governs the activities of third party debt collectors.
Which raises the question; who are third party debt collectors?
When the attempts of primary creditors to collect a debt prove fruitless, they will declare the account to be in default and sell it to collection agencies, who will pursue it more vigorously. These collection agencies are known as third party debt collectors.
Under FDCP regulations, third party debt collectors cannot—
- Come to your workplace.
- Harass you with repeated calls, threats of violence or by publishing information about your debt in social media—or anywhere else. They are also prohibited from using obscene and/or abusive language in their conversations with you.
- Have you arrested, unless you’re ordered to appear in court and fail to appear.
- Go after you for a debt you did not incur—unless you cosigned for a loan and the primary borrower defaulted.
- Phone you before 8:00 a.m. or after 9:00 p.m. unless you give them permission to do so. They must also desist all efforts to contact you once they receive a written request from you to that effect. It should be noted the debt remains valid, even though they can’t contact you.
On The Other Hand…
While they are prohibited from engaging in overt harassment, third party debt collectors can exact an emotional toll from you just the same.
The FDCP does give them leeway to—
- Contact your spouse, parents or guardian (if you’re a minor), executor and attorney if you’re being represented for debt related matters.
- Pressure you with the prospects of lawsuits, phone you daily, write to you as often as they see fit, as well as send you eMail and text messages—until you send them a letter asking them to refrain from doing so.
- Seek payment for debts, regardless of how old the obligations might be. However, there is a statute of limitations on the amount of time they have to take you to court for a debt. With that said though, if they can get you to accept responsibility for a debt after that window has closed, it will open again and they can then sue you.
- Take you to court to try to get the justice system to force you to pay. Once such a judgment is secured against you, they can then engage in wage and bank account garnishments.
- Sell your debt to anther collections agency, which means you’ll have a whole new group of people coming after you. This is true, even if you’re currently making payments to the seller.
- Negotiate a settlement. Collection agencies buy debts from primary lenders for next to nothing. This means they have room to settle those debts for less than the original balance and still make money.
Understanding what debt collectors can really do—and what they cannot—can make the debt resolution process easier to accomplish. Just always remember to get everything in writing and save copies of all correspondence between you and the debt collector—especially if you settle the debt. This way, if someone comes after you for it in the future, you’ll have documentation to prove you’ve paid.