Has Debt Got You Down?

4/29/10 |
Karen Saley, Extension Specialist, Pinellas County Extension

There are few things worse than being in debt and having creditors constantly calling. If you find yourself in this situation there are some things you should know to protect yourself and your sanity. Although you may owe the debt, you still have rights. The Federal Trade Commission enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices.

Let’s first define “debt collectors.” Under the FDCPA, the term means someone who regularly collects debts owed to others. The doctor’s office that provided you with the service and calling on behalf of themselves is not considered a debt collector. However, the lawyer or collection agency that is trying to collect money for your doctor would be considered a debt collector.

Debts not covered. There are debts that the FDCPA doesn’t cover such as debts you incurred to run a business. It will, however, cover personal, family, household, medical, and credit card debt.

What about old debts? There may be some confusion about whether or not a debt collector can attempt to collect on a debt that is very old. Debts that are very old are called “time-barred” debts and state laws prohibit collectors from suing you to collect the money owed. It does not stop the collector from still trying to collect the debt; they just can’t sue you or threaten to sue you in order to collect the debt. Based on Florida law, a time barred debt is one that is generally four to five years old. There are some stipulations regarding collecting time-barred debts that you should be aware of. For more information specific to Florida law contact the State Attorney General’s Office at http://myfloridalegal.com/.

You have the right to ask a debt collector to stop calling you. The telephone can be an easy form of harassment, but there are laws in place to prevent debt collectors from abusing this form of communication. They cannot call before 8am or after 9pm and they cannot continually call with the intent to annoy. You have the right to request that a debt collector stop calling you entirely. The request must be in writing and it is advised that you make a copy of the letter for your records and send the letter by certified mail, return receipt. Once the debt collector has received your letter they can no longer contact you unless they are notifying you of a specific action they will take, such as filing a law suit.

Privacy is a concern for many people with debt. Debt collectors are allowed to call your family, friends, and neighbors but only to ask for your address, home phone number, and where you work. They cannot continue to call third parties for more information or discuss your debt with them. The exception is if you have an attorney handling your case. Debt collectors can and should deal with them, not you.

If a debt collector is calling you, they have five days after initial contact to send you a written “validation notice” which will explain how much money you owe, who the creditor is, and what steps you can take if you believe the debt is not yours. Be cautious about what you say to a debt collector. You may reactivate a time-barred debt simply by acknowledging that you owe the debt or agreeing to make some form of payment, no matter how small.

Harassment, false statements, and threats are not allowed. Debt collectors cannot use abusive language, imply that documents are legal if they are not, misrepresent themselves as attorneys if they are not and threaten violence against you or claim they will have you arrested if you don’t pay your debt. If you do owe a debt that you have not paid, a debt collector can notify you that they will be filing a law suit against you and must follow through with it. They can’t just use it as a threat to intimidate you.

Being in debt is a difficult and frustrating situation and not a place most of us would intentionally put ourselves. If you find yourself overburdened with debt, take steps to talk with your creditors and work out an agreeable plan to pay the debt before it gets turned over to a collection agency or attorney. If debt collectors are already calling you, the best thing you can do is be well informed of your rights. This will not make your debt go away, but it will make taking care of them a bit easier.

For more information on your rights visit http://www.ftc.org/ or call 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.