Owing a debt can feel precarious, especially if your debt becomes the legal property of a debt collection agency. Agencies such as this are practiced in the skill of obtaining their money legally and sometimes even have the ability to take a debtor to court to garnish wages. It's important to know what your rights are during the debt collection process in case you have trouble keeping up with your creditor's bills.
Debt Collection Regulations
Debt collection in the United States is regulated by the Fair Debt Collection Practices Act, or FDCPA, enforced by the Federal Trade Commission (FTC). The FDCPA defines the job of a debt collector and outlines what steps a collector can take in collecting a debt. Debts covered by the FDCPA include all personal debts, including credit card and medical bills, but do not offer protection for individuals who have incurred debts on behalf of a business which they own.
Debt Collectors
A debt collector is an individual or company who has bought a debt from another financial institution and is now legally able to collect that debt. Once a debt collector owns your debt it is legally able to contact you in an attempt to collect the debt or, in extreme cases, bring you to court for debt collection. A debt collector is able to contact your representing lawyer or you directly; if the debt collector cannot contact you, he is able to contact friends and neighbors to find you.
Court Action
If a debt collector cannot get you to settle the debt, he has the option of taking you to court to recover the debt. If the debt collector wins the court case, he can receive a writ of garnishment which legally requires an employer to send a portion of your paycheck to the debt collector.
There are statutes of limitations regarding the collection of debts, which start running from the date of the last account activity. Each state handles statutes of limitations on debts differently; in Texas, the statute of limitations for open accounts, written contracts, oral agreements and promissory notes is four years, while Ohio has no statute of limitations on open accounts and has 15 years for both written contracts and promissory notes. Although a debt collector can still sue, the debtor can ask the judge to throw out the case if the statute has passed.
Fighting Debt Collection
An indebted person has a number of options for protecting personal finances during the debt collection process. When contacted by a third-party debt collection service, a person can asked to have the debt which the collection agency supposedly holds verified as that person's legal debt. A debt collector must produce proof that he owns the debt, copies of the original contract and a payment history of the account. If it's possible that the statute of limitations has run out on the debt, do not admit that you owe the debt as this could restart the statute of limitations.
0 comments:
Post a Comment