Dealing with bad debt is no fun.
Dealing with a bad debt collector can be downright terrifying.
When you have a bad debt that has gone to a collection agency it can be very easy to want to avoid the pain of the situation or even totally ignore it when you know you can’t possibly pay it. That’s why some collectors of overdue debt will do everything they can to get your attention, even if it’s illegal.
Most debt collection agencies are legit and strictly follow the rules set forth by the FTC (Federal Trade Commission). However, there are plenty of bad debt collection agencies out there that are willing to do whatever it takes to collect an overdue debt.
Bad Debt Collectors Can be Over the Top
Some of them even resort to threats of arrest and jail, even telling people that the police will be on their way if they don’t pay their outstanding debt right now. Some of these jokers have even taken to harassing people on Facebook, on the telephone, and through email.
But some of the worst have gone so over the top as to threaten bodily harm, foreclosure on the debtor’s home, and even threatening to exhume the body of a deceased girl whose funeral expenses had gone unpaid.
Obviously, those tactics are ridiculous and illegal, but it happens so much that the FTC received over 180,000 complaints about abusive debt collectors in 2011, a large increase over previous years.
So what can a debt collector legally do to attempt collection of a bad debt?
What can you do if they don’t follow the rules? First you have to know what the rules are.
Let’s talk about what a debt collector can’t do first.
What a Debt Collector Can’t Do
According to the Fair Debt Collection Practices Act,
- They are not allowed to threaten bodily harm (unless you borrowed money from the mob, then you’re playing by Vito’s rules).
- They cannot have you arrested. There is no such thing as debtor’s prison anymore.
- They can’t take your home or threaten to take your home.
- They can’t publish or reveal to anyone else that you have an outstanding debt.
- They can’t threaten to take away child custody.
- They can’t have you deported.
- They can’t call you before 8:00 am or after 9:00 pm
- They can’t call you at all if you asked them in writing to stop, or if you’ve hired an attorney.
- Call the collection agency- Do this first. It could be a legitimate debt collection company that wants to work with you to collect the debt, and the one person that contacted you is just a bad apple. If you can’t get anywhere taking this step, then try the others below.
- File a complaint with the Federal Trade Commission and your state attorney general’s office.
- Hire an attorney- Probably your best bet for immediate help. Make sure you have detailed records to back up your complaint. A lawyer who is a member of the National Association of Consumer Advocates will be more likely to have experience in these types of cases.
- Make sure you have it in writing- Within 5 days of first contacting you, the agency attempting to collect the bad debt must send you written notice of who you owe, how much you owe, and what to do if you don’t think you owe the money. If they haven’t done this first, they can’t contact you any other way.
You Can Do Something About It
Hopefully, you’ll never have to deal with debt collectors, especially the bad ones. But if you do, the knowledge you’ve gained here may come in handy and help keep you from added despair.
Of course, if you have debt and you’re sick and tired of that debt dragging you down like a Mr. T necklace on a 98 pound weakling, maybe it’s time to say “I’ve had enough!”, stop the excuses and do something about it. My “Celebrating Financial Freedom” online get out of debt course is available here. You won’t regret it.
Question: Have you ever had a debt collector threaten or harass you? Leave a comment and tell me about your experience.