Debt Collection Laws
Debt collection laws regulate the manner in which creditors obtain payments from debtors. Collection itself may be performed directly by the creditor, or through a collection agency hired by the creditor. Both individual consumers as well as businesses may become subject to collections if they fail to make timely debt payments. Debt collection is often part of a general bankruptcy proceeding.
Debt collection is governed mostly by federal and state laws. The Fair Debt Collection Practices Act is one of the main pieces of legislation governing debt collection practices. The Federal Trade Commission Act (FTCA) also regulates debt collection. Most states model their statutes after these federal acts.
Finding the Right Debt Collection Lawyers
According to most debt collection laws, it is illegal for a creditor or collection agency to:
- Falsely represent themselves as police authorities, government officials, lawyers, or other entities
- Use collection tactics that threaten violence or harm
- Communicate in a manner that is purposely obscene, bothersome, or irritating
- Conduct communications at hours that are prohibited by collection laws (the hours between 9 p.m. and 8 a.m. are usually off-limits)
- Contact third parties or provide them with your personal information without your consent
- Use letterheads that look similar to official court documents. Letters must be recognizable as normal business documents.
Once a creditor or collection agency has begun collection procedures, they must disclose important pieces of information to the debtor. This includes the name of the creditor(s), the amount of debt that is owed, and the deadline by which the debtor must pay the debt.
Violations of debt collection laws are very serious and can lead to various remedies for the debtor. For example, victims of unfair collections practices can file a complaint with a government agency such as the Federal Trade Commission (FTC). Or, the debtor may be able to file a private lawsuit against the collecting entity in order to receive monetary damages for losses.
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