A family sits down to a nice dinner when the phone rings. No one gets up to answer it, however, because they know a collections representative is on the other line, once again inquiring when payment can be expected. The next day, it rings again.
Unfortunately, this scenario is true for far too many American families who have struggled financially since the recession began. The constant letters, calls or home visits by collectors are stressful, especially for consumers who are not familiar with their rights.
Myths About Debt Collection
Consumers are relative uninformed about debt and debt collection despite the millions of Americans who currently owe money on their credit cards, home mortgage or have other liabilities. For example, SmartMoney reports that many people believe that a past-due debt will no longer be reported on their credit report once it is paid in full. However, it can take up to seven years for some items to be removed from a person's credit history.
Additionally, most people are unaware that free-of-charge debt collections agencies are available to help negotiate payment plans. As a result, paying fees to debt settlement firms is often unnecessary.
Consumers' Rights and Protections Against Creditor Harassment
It is important for people to learn about their rights as consumers, especially if they are facing unrelenting collections representatives on a daily basis.
The Federal Trade Commission offers valuable advice for anyone weighed down by debt and debt collectors. For example, collectors must abide by the rules and regulations imposed upon them by the Fair Debt Collections Practices Act, which covers personal, family and household debts:
- Collector Contact: A collector may only contact you between the hours of 8:00 a.m. and 9:00 p.m. unless a debtor authorizes otherwise.
- Stopping Contact: Submit a written letter to the collector informing them of your wishes to no longer be contacted. This does not prevent a debt collector from initiating litigation, however.
- Harassment: Debt collectors may not use threats or violence or harm, use obscene language or repeatedly use the phone to annoy someone.
- False Statements: Debt collectors may not lie about who they are or misrepresent any information relating to a debt or the collections effort.
One of the most efficient ways to cease collections activity is to speak with an experienced attorney and file for bankruptcy protection. Once a petition is filed, an "automatic stay" is put in place, which imposes strict sanctions on creditors or agencies if they continue to pursue collection. Anyone struggling with his or her finances who needs a fresh financial start should speak with a qualified bankruptcy attorney to discuss their options.
