Debt collectors have restrictions on pursuing you for payment but they can sue you for payment. If you feel powerless while dealing with debt collectors, their tactics are limited by the Fair Debt Collections Practices Act (FDPCA).
Here are some things third-party debt collectors who collect debts for other creditors, can and cannot do.
5 things Debt Collectors cannot do
- Visit your workplace
The FDCPA rules prevent debt collector from visiting your workplace to collect dues. The Act prohibits publicizing debts, and visits to your job to collect debts. A debt collector, possibly a credit card company, may call you at work, without revealing their debt collector identity to your co-workers. To stop such calls legally, ask the debt collector to stop contacting you at work.
- Harass you
Debt collector harassment comes in many forms: threats of violence, repeated calls, publishing information about you, abusive/obscene language. These are illegal under the debt collection practices act.
- Arrest you for debt
You cannot be arrested for a debt that you owe a debt collector. If a debt collector happens to sue you over your debt and you do not show up in court, you will lose by default and will be ordered to pay and if you defy the court order, the collector secures arrest warrants.
- Pursue you for debt you don’t owe
The debt collection industry has inaccuracies as incomplete or inaccurate documentation misleads a debt collector to pursue wrong persons for payment, or pursue person for repaid debts. This issue though common, is illegal. If you doubt a debt you’re asked to pay, check your credit report.
- Calling at odd times
A debt collector can’t call you before 8 a.m. or after 9 p.m. You can request debt collectors to stop calling or writing for debt repayment, but your debt repayment obligation remains.
5 things Debt Collectors can do
- Seek payment on expired debts
All unsecured debts, like medical bills and credit cards have a statute of limitations. After this date, the debt expires and you can’t be sued for payment. The debt remains and debt collectors can seek payment on the outstanding financial obligations.
- Pressure you
Debt collectors cannot threaten or mislead you, but can pressurise you for payment with frequent letters, daily calls, or talk about filing a lawsuit for debt repayment by remaining within legal boundaries.
- Sue you for debt repayment
Debt collectors could sue you for debt repayment in last-ditch efforts, which results in wage garnishment, and bank levies, because most debtors do not show up in court and will lose by default.
- Sell your debt
A collector may resell their debt if unable to collect or sell the remaining of it, if partial payments were made. So even if your original debt collector stops pushing you for repayments, another one may start. If you repay the debt in full, ensure an agreement in writing to prove it.
- Negotiate what you owe
Debt collectors buy debt for pennies on the dollar, with pretty large profit margins if the original amount that was owed, is collected. This gives more flexibility for negotiating payment from consumers. You could negotiate a settlement between 25% to 30% of the amount owed and draft an agreement in writing, for proof that the debt was repaid in full for the agreed-upon settlement amount.