Know The Law That Protects The Rights Of All Consumers In Debt

When you have an unmanageable debt you will face a lot of inconvenience not only in managing your finance but also with your personal as well as professional life. The situation will be even worse when you have multiple debts in the form of credit card debts, personal loans, mortgages, auto loans, student loans and even medical debts.

Adding fuel to the fire, so to speak, will be the collection calls from the debt collectors that will make you mad and may even put you in a cocoon feeling depressed and demotivated. However, if you know your rights as a consumer being in debt you will feel calm and peace restored in your troubled life.

It is true that debt issues are hard to manage. Once you deal with one or feel you have, several others may crop up. Moreover, apart from your crumbling financial situation, debt and especially falling behind in repaying your debt will also harm your credit score. It is therefore a good idea to check your credit score on a regular basis to see how it is affecting your credit. You are free to do so and are also entitled according to the law to get a free copy of your credit report from each of the three primary credit bureaus namely:

  • Experian
  • Equifax and
  • Trans Union

You can ask for a copy every 12 months but if you space it well and ask from different bureaus in different times, you can have a check on it all thorugh the year, well after a quarter of it to be precise.

When you continue repaying your debts, it will impact your credit score in a positive manner. You may even see the breakdown of the five factors that make up your scores such as:

  • Payment history
  • Credit utilization
  • Length of credit history
  • New credit and
  • Credit mix.

However, when you do not make your payments on time your account will be handed over to the collections by your creditors and this is when your life, personal as well as financial, will start to fall apart. You may even consider opting for debt relief which once again can affect your credit score as well. If you do not believe, you can go through a few debt settlement reviews to find out the real picture behind such attempts.

The good news

The good news is that you have your debt collection rights, lots of them, and FTC always tries hard to protect it from being exploited, thanks to the Fair Debt Collection Practices Act. This is the federal law that lays down a specific set of rules for the third-party debt collectors. These rules must be followed by the collectors at all time to avoid financial penalty or a complete dissolution of the company. This law covers all types of unsecured loans and secured loans such as credit card debts, auto loans, and medical bills.

According to the law the debt collectors cannot do the following:

  • They cannot call you up early in the mornings or late at night. They must call you up within 8 a.m. and 9 p.m. according to your time zone unless you ask them specifically to call you beyond these hours. However, the Fair Debt Collection Practices Act does not mention anything about the time limit of text messages because these were not there when it was framed and passed way back in 1977.
  • Debt collectors cannot legally call you at work as well if you request it. Your employer may not allow personal calls at workplace or you may not want others to know about your private matters and therefore it is a good idea to keep the debt collectors away from your workplace right away. You can make such a request either in writing or verbally as both of these are legally binding for the debt collection agency.
  • Moreover, the debt collection agency cannot make continuous calls or call you up repeatedly at different times of the day for your unpaid debt. According to the FTC this form of calls is considered to be harassment and therefore is not allowed explicitly by the Federal Trade Commission.
  • Assuming that you disagree with the claims of the debt collection agency that you owe money, you have the legal right to inform them about it in writing and once you do so they must stop calling you till the time the debt is verified.
  • At no cost you should entertain any verbal abuse or threat calls because legally no debt collection agency can follow such practices. This is another form of harassment that is again strictly off limits according to the FTC. You have not committed a crime by failing to make your payments and the debt collector cannot falsely imply it or call you names either.
  • You can also take legal actions if the debt collection agency invades with your privacy. The debt collector has not right to inform your friends, family, colleagues and neighbors about your debt with intent to defame you and make you pay your dues. However, they can do so to find out your address, where you work or to get your phone number. They can also tell about your debt to your spouse or your attorney but no one else than them.
  • Apart from that a debt collector must send you a written notice about the debts mentioning the exact debt amount and other specifics of your debt. However, this should not contain any threats of a legal action or abuses. This notice must be sent within five days of calling you up for the first time. Most importantly, this notice must specify the things that you can do if you think that you do not owe the money to the said creditor.

If there is any dispute with the claims the debt collector makes, no further contacts should be made and all disputes verified. If any of these rules are broken you can report to the attorney general’s office, the CFPB or FTC.