Consumers who are behind in paying their bills are protected by laws that limit debt-collection companies' methods for collecting a debt. People may be able to avoid lawsuits and wage garnishments by dealing with collection agencies to settle their debts. However, they don't have to endure harassment or abusive behavior from debt collectors in the process.
Debt Collection Act
The U.S. Fair Debt Collection Practices Act prohibits debt collectors from using abusive, deceptive or unfair tactics to collect consumer debts. Among other things, consumers don't have to tolerate collectors who use obscene language or who misrepresent the amount they owe. Consumers can sue debt collectors for pursuing illegal collection methods as long as they do so within a year of an alleged violation. Report problems with debt collectors to your state Attorney General's Office and to the U.S. Federal Trade Commission.
Stop Contact
People can stop calls from debt collectors, but the FTC recommends making contact with them at least one time to potentially resolve a problem quickly. For example, a debt collector may mistakenly contact you about an account that's not yours, or you may be contacted about a loan you've already paid in full. In any case, you can tell a debt-collection company in writing to stop contacting you, but that won't stop legitimate collection efforts. Debt collectors are obligated to stop calling you after receiving your written request, but you may receive a letter in return to inform you that you're being sued to recover a debt you owe.
Contact Rules
The FTC website indicates that debt-collection companies may not contact you at inconvenient times or places without your consent. Collectors also must stop contacting you at your place of employment if they're told by phone or in writing that you're not allowed to receive such calls there. Collection companies are allowed to contact a consumer's lawyer if a consumer hires a lawyer to handle a debt issue. Debt collectors may contact other people you know to track down an address or phone number in an attempt to locate you. However, the FTC says collectors generally aren't allowed to discuss their reasons for calling with anyone other than you, your spouse or your lawyer.
Garnishments
Creditors or debt-collection companies that successfully sue a consumer to collect a debt can request that a garnishment order be issued against the consumer. In such cases, a bank or other financial institution may be directed to turn over some of a person's finances to pay the debt. A wage garnishment usually requires a court order as well, and it involves having an employer withhold part of an employee's pay to cover a debt owed to a creditor. Social Security, service members' pay, railroad retirement benefits and many other federal benefits are protected from garnishment.
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