Dealing with Debt Collectors: Your Consumer Rights

: Reese Baker & Associates

  Filed under: Bankruptcy Information

Dealing with debt collectors can be an exhausting and emotionally draining event. For some individuals, receiving a debt collection call can be terrifying, and for others infuriating. However you personally deal with debt collection attempts, you should know that you have rights as a debtor. Hopefully, by knowing your rights, any attempts to collect a debt from you will be a less strenuous ordeal.

FDCPA: Basis of Debtor Rights

The Fair Debt Collection Practices Act (FDCPA), was passed with the idea that even though people may owe money to another person or organization, they are still a human being with undeniable, legal rights. Before the adoption of the FDCPA, collection agencies employed a variety of deplorable actions in order to stress individuals out to the point that they would do anything to stop to the harassment. The FDCPA outlines debt collection rights, unfair practices, legal actions for debt collectors, and other related laws.

How Long Does Debt Last?

The statute of limitations of debt collection differs from state to state, but in Texas, the limit is four years. This means that an individual must bring suit for debt no later than four years after the day the cause of the action accrues. While it isn’t uncommon to get a call or letter from a company that has purchased the rights to your old debt, they can’t legally enforce the debt by bringing suit.

Get It In Writing

You’d be surprised how many individuals allow credit card companies to with a judgment default for a debt that they have no proof of. In fact, that’s what they count on in many situations. Always ask for written verification of the debt, both in interacting with debt collectors and if you are being sued in court over the debt. If they can’t produce proof thought your original contract and other supporting documents, they have no case and can’t get a dime from you. Additionally, you have 30 days from the time of the first contact with a debt collector to dispute the debt.

Your Credit Report

Even though the company must show proof of the debt in order to enforce it, this isn’t necessary to report your debt to the credit bureaus in an attempt to force you to pay. Notwithstanding, you can owe a debt not located on your credit. Some creditors don’t report debt right away or at all. It’s a smart idea to obtain a copy of your credit report once a year from all three monitoring agencies, but just because it isn’t there doesn’t mean that you don’t own it.

You Can (and should) Negotiate the Debt

Many callers you speak with in an attempt to collect a debt are regular employees but have the ability to take less than what you owe and write off the debt. You can ask and will generally get at least a small percentage of the debt reduced. Be ready to pay off the total amount and you can get as much as 50% of the total bill knocked off. Make sure you get any agreements like this in writing whenever possible.

Contact a Bankruptcy Attorney

By hiring a Texas bankruptcy lawyer and filing bankruptcy, you will obtain an automatic stay that instantly prevents collectors from calling, writing or any other forms of debt collection. If they violate the automatic stay you could even be entitled to damages from the company.