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Are held in check by the Fair Debt Collection Practices Act (FDCPA). This is a federal law that dictates what debt collectors, like collection agencies and lawyers, can and cannot do. Despite provisions of the FDCPA however, many debt collectors still employ illegal and harassing practices including threatening legal action.
Debt Collector Harassment
Under the FDCPA, a debt collector cannot threaten to sue you to force faster payment of a debt. More often than not, when a collection agent or lawyer threatens to sue, it is to frighten you into making larger payments or establishing an impractical and financially infeasible payment schedule. Threatening legal action in these kinds of circumstances is clearly harassment under the FDCPA’s provisions and any debt collector that does so is breaking a federal law.
Can You be Sued for a Debt?
More often than not, debt collectors that threaten to sue you don’t actually have the legal right to do so. Many of the collectors that call and harass debtors have purchased debts from original creditors. Or they have been contracted by a creditor to collect the debt. Failure to pay can sometimes lead to lawsuits, but it’s more common for creditors to give up on bad debts rather than invest additional money in trying to collect from someone that doesn’t have the financial means to pay.
There is also a statue of limitations for debts. If a creditor doesn’t sue within that time period, then they cannot sue you unless you acknowledge the debt and make it “reactivate.” State laws govern the statute of limitations for lawsuits and also determine when or if a debt can be reactivated.
Collection Agencies that Break the Law
In recent years, there’s been an increase in collection agencies purchasing old debts, many of which have already passed the statute of limitations for suing. Debt collectors that buy these debts pay a very small sum for them and then often use very aggressive tactics to try to trick consumers into reactivating debts.
Threatening to sue over a debt that has already passed the statue of limitations is illegal and harassing. The best recourse is to simply not communicate with collectors and to report them to the proper authorities.
What to Do if a Debt Collector Threatens to Sue
If the debt you have has passed the statute of limitations, then you must take additional steps to hold the collector accountable for breaking the law in threatening to sue you. If the debt is one you could potentially face a lawsuit with, then you will also need assistance.
- Do not communicate with the debt collector, if it is past the statute of limitations. They can trick you into reactivating the debt and you could then face a lawsuit in the future.
- Notify the Attorney General in your home state of the harassing practices of the debt collector.
- Report the debt collector to the Federal Trade Commission for their harassing methods as well.
- Contact an attorney about the possibility of a lawsuit and learn what your rights are under the particular circumstances you now face.
An attorney may be able to put an end to the debt collection efforts quickly. If the debt is passed the statute of limitations, a lawyer can threaten a lawsuit in return for violation of your rights under state and possibly federal statutes. If this doesn’t end the issue, a lawyer can help you fight a lawsuit if one does occur and may be able to prevent you from being sued in the first place.
What types of debts are covered?
The Act covers personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage. The FDCPA doesn’t cover debts you incurred to run a business.
Can a debt collector contact me anytime or any place?
No. A debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.
How can I stop a debt collector from contacting me?
If a collector contacts you about a debt, you may want to talk to them at least once to see if you can resolve the matter – even if you don’t think you owe the debt, can’t repay it immediately or think that the collector is contacting you by mistake. If you decide after contacting the debt collector that you don’t want the collector to contact you again, tell the collector – in writing – to stop contacting you. Here’s how to do that: Make a copy of your letter. Send the original by certified mail, and pay for a “return receipt” so you’ll be able to document what the collector received. Once the collector receives your letter, they may not contact you again, with two exceptions: a collector can contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit. Sending such a letter to a debt collector you owe money to does not get rid of the debt, but it should stop the contact. The creditor or the debt collector still can sue you to collect the debt.
Can a debt collector contact anyone else about my debt?
If an attorney is representing you about the debt, the debt collector must contact the attorney, rather than you. If you don’t have an attorney, a collector may contact other people – but only to find out your address, your home phone number, and where you work. Collectors usually are prohibited from contacting third parties more than once. Other than to obtain this location information about you, a debt collector generally is not permitted to discuss your debt with anyone other than you, your spouse, or your attorney.