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Navigating Debtor Rights When Using a Debt Collection Agency

Posted on in Debt Collection

b2ap3_thumbnail_Creditors-Rights-Debt-Collection.jpgOne of the first steps creditors take when owed money by a debtor is to try to collect the debt themselves without going to court. The creditor may contact the debtor directly or hire a debt collection agency. While debt collection agencies can be effective, there are federal laws in place to protect debtors against what are seen as unfair practices by collection agencies.

The Fair Debt Collection Practices Act outlines how debt collection agencies may contact and interact with debtors. If a court finds an agency in violation of the act, the agency may owe damages to the debtor. The Act does not apply to the creditor, but the result of a collection agency violating the Act may be the failure to retrieve the money the creditor is owed.

Creditors should understand what debt collection agencies can and cannot do. Choosing an agency that violates the law will delay and complicate the collection process, likely requiring further legal action.

Making Contact

  • The debt collector must contact the debtor at a reasonable time, which is assumed to be between 8 a.m. and 9 p.m. The collector may not contact the debtor at his or her workplace if the collector knows the debtor's employer prohibits such communication.
  • The collector may contact a third party in order to learn the location of the debtor but may not tell the third party that the debtor owes any debt.
  • The debtor has the right to tell the collector to stop communication. After receiving this notice, a collector may only contact the debtor to confirm communication will be stopped, or inform of further action being taken by the creditor.
  • Once the collector knows an attorney is representing the debtor, all communication must be made with the attorney, unless the attorney fails to respond in a reasonable time.

Prohibited Practices

  • The collector may not harass the debtor, including the use or threat of violence; abusive language; publishing a list of debtors who refuse to pay debts (except with a credit agency); and repeated communication for the purpose of annoying the debtor.
  • The collector may not give false or misleading information to the debtor that misrepresents who the collector is and what actions the collector is allowed to take. For instance, the collector cannot say he or she is a law enforcement agent or attorney.
  • The collector may not collect an amount from the debtor that is greater than the debt owed.
  • The collector may not take or threaten to seize property from the debtor if the collector is not legally allowed to.

Sometimes, a creditor's only recourse against debtors is to take legal action. Contact one of our Chicago debt collection attorneys to make sure you retrieve the money you are owed. Call Walinski & Associates, P.C. at 312-704-0771.

Source: 

https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text

Illinois Creditors Bar Association Chicago Bar Association Illinois State Bar Association
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