Debt Collection - Your Rights

Here's some expert advice on how to fight back against unethical collectors. The Fair Debt Collection Practices Act requires that debt collectors treat you fairly. This doesn't mean you won't have to pay your legitimate debt. But here are some basic rights:

• A debt collector cannot call you before 8 a.m. or after 9 p.m., unless you agree.
• You cannot be contacted at work if the collector knows your employer disapproves.
• If you don't want to hear from a debt collector, write a letter telling them to stop. By law, they have to. Remember, the debt won't go away and you can still be sued.
• The debt collector can contact your attorney -- if you have one. If not, your friends and family can be asked about how to get in touch with you.
• A debt collector can't misrepresent the amount of your debt.
• A debt collector also cannot use profane or threatening language.
• Debt collectors can't say that they will put a lien on your property or file a lawsuit unless the agency really means to do that and it's legal.
• Collectors can't legally claim federal benefits, such as Social Security or your retirement accounts, like your IRA or 401(k).

Once you're contacted by phone, you have the right to get a notice that outlines your debt, whom you owe money to, and what action to take if you don't owe the money. Keep in mind that a debt collector can collect a debt owed by an ex-spouse. If the debt was incurred while you married, you may be liable for the debt after a divorce even if the divorce papers state your spouse is responsible for paying off the debt.

If you've been contacted by a debt collector, but you don't think you owe a debt, you must write a return letter stating that the debt is not yours within 30 days. Once a collector receives your letter, they should send you proof of the debt, such as a copy of the bill. Don't be coerced into paying a debt you don't owe. If you do pay just to get rid of the debt collectors, it's an admission of guilt, and it will have a negative impact on your credit score.

Keep in mind that some debt has an expiration date. There is a limit to how long collectors can legally collect your debt. Generally this limit - called the statute of limitations - can range from three to 15 years according to Ridout. Check with your state's attorney general's office to find out the limit in your state. You can find out who to contact at www.naag.org.

Sometimes debt collectors will try to collect on this old debt called zombie debt because it never goes away. Make sure you don't accept a new credit offer from a creditor you never repaid. Once that creditor renews your credit relationship, the clock starts ticking all over again on your state's statute of limitations.

If you think you've been treated unfairly by a debt collector, take action. File a complaint with the Federal Trade Commission at 877-FTC-HELP or go to www.ftc.gov. You should also contact your state attorney general's office.

You also have the right to sue a debt collector in state or federal court within a year of the date the law is violated. A victory will allow you to recover money for the damages you suffered plus an additional amount up to $1,000. A group may also sue a collector and for damages up to $500,000, or one percent of the collector's net worth, whichever is less.

And the federal government plays by slightly different rules. In 1996, Congress passed the Debt Collection Improvement Act which allows the government to take a portion of federal retirement, federal salary and Social Security benefit checks to cover non-tax debts owed to the government.

There are some debts that you can't get rid of. If you don't pay your federal student loans for example, debt collectors can garnish your Social Security wages and prevent you from renewing any state licenses according to Mark Kantrowitz of Finaid.org. Debt collectors can even dip into your tax refund. Other debts like past-due child support and federal tax liens tend to stick with you.

(source: CNN)