Facts about debt collection

If you use credit, you are in debt. Debt can be in any form. It can be a mortgage, student loan, auto loans, credit card debts etc. But there are many creditors that sell off the debt account to collection agencies in case they are not able to collect debts from you. Once the debt account is sold off to the collection agencies or debt collector, they will put in all effort to collect the dues.

The collection agencies are governed by certain norms that are enforced by the Federal Trade Commission. The FDCPA or the Fair Debt Collection Practices Act regulates the manner in which the collection agencies or debt collectors are to behave with debtors.

The collection agencies are not allowed to collect all types of debts. If you fall into debt for availing credit to run a business, this type of debt is not covered by the FDCPA. The debts that can be collected include auto loan, medical bill, mortgage, household debts, personal debts etc.

Collection agencies are known to use abusive language and adopt unfair means to collect debts. However, they are not allowed to do so. There are many instances when collection agencies contact your workplace and your relatives, friends and also make calls at odd hours. However, as a rule they are not supposed to call you before 8am and after 9pm unless you permit them to do so. And even if they contact your acquaintances, they can do so only to collect information like home phone number, address, your place of employment etc. In other words, they can ask people for your contact details but only once.

In case you receive a letter from the debt collectors or collection agencies urging you to pay up and you don't owe any money to a creditor, opt for debt validation. You can also check the SOL or the Statute of Limitations on debt for the state in which you are residing. If you owe money to creditors, it is better if you pay up.

If you find any collection agency violating the Fair Debt Collection Practices Act, you can contact the Attorney General of the state in which you are residing and report the same.