Posted By: CFP&WM On: Feb 22nd, 2010 In: In the news

Senior Spectrum – October 6, 2009

Debt Collection – Know your Rights

It can happen to anyone, at any time. A loss of the job, sudden catastrophic illness or some other unplanned emergency arises and even good people can fall behind in debts.

You may have received some written notices from, a credit card company, hospital or whoever else if you do not respond the phone calls start from the collection companies.

All companies are different but at some point when the bill has not been paid, most turn bad debts over to “debt collectors”. These debt collection companies get paid a percentage of what they collect and can be as high as 50%. If these debt collection companies don’t collect anything, they don’t get paid which can lead to some vicious collection techniques.

The Federal Trade Commission enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive unfair or deceptive practices to collect from you which can be personal, family or household debt including personal credit card, auto loan, medical bill or your mortgage.

Perhaps the best approach is to tell the company why you are behind and explain what you can do to take care of the outstanding debt. Do not promise something you cannot do. Preventing the bill going to collections would be easier for you if you can work with the original company.

Once a debt goes to “collections company” the FDCPA does have some protections for the consumer that prevents a debt collector from contacting you at inconvenient times or places, such as early in the morning or late at night unless you have agreed to it. They may not contact you at work if you are not allowed to get calls while at work.

You have a right, to tell the collector in writing to stop contacting you. This does not stop the debt but should stop the future contact. In doing this, it may force the debtor or the debt collector to sue you to collect the debt.

Debt collectors may not harass, or abuse you or any third party that contact nor may they use the threat of violence, use profane language, or threaten to publish a list of names of people who refuse to pay their debts nor may they lie to you when trying to collect debt. They may not tell you that you will be arrested if you don’t pay your debt.

If you don’t pay a debt a creditor or its debt collector can sue you to collect the amount owed. If they win, a judgment will be entered against you. This judgment would allow the collector to obtain a garnish order directing a third-party like your bank to turnover funds from your account and pay the debt. Wages can be garnished only as a result of a court order.

Social Security payments, veteran’s benefits, civil service and federal retirement benefits, military annuities and survivor benefits, railroad and retirement benefits and others are exempt from garnishment.

It’s always best not to get behind in your bills but when you do, you do have certain rights. For more information go to the Federal Trade Commission website at

Send your questions to or call 800-347-1340

This article is for informational purposes and should not be taken as legal, tax or investment advice.

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