Debt collections are contacted with debtors to attempt to collect payment from them. The government gives a debt collection agency the authority and discretion to take further action, such as wage garnishment and intercepting lottery winnings.
Debt collectors have the legal authority to contact you about your debtor’s accounts even if you don’t owe them any money (such as contracted medical providers). Credit card companies pay these agencies a percentage of what they collect in fees for doing their job. They may also attempt to collect debts with little or no money being owed or use techniques like identity theft to secure repayment. One of their primary objectives is not to pursue their duty but to secure the maximum amount of money for the company.
Debt collection agencies often threaten to sue and arrest those who refuse to pay debts. However, they must use some restraint as lawsuits are costly and can take many years to win. In most states, collectors may only sue if they have obtained a judgment against you with one or more court actions. They also cannot harass you via phone calls or mailing, which is called harassment. The Federal Trade Commission has a website that discusses debt collection agencies that provide many forms for consumers regarding the proper procedures for responding to them (for example, complaint forms).
The first thing a collector will do is take steps to locate their debtor, usually by using official methods such as the methods outlined in your state’s statute on other business methods. If they use these methods, they must comply with the law on how to do it, including providing any information required by law. The statute also gives you the right to file for a protective order which protects you from this collection action. The following is an example of what a violation of this would look like:
The collector will continue contacting you about your debt, and if you do not respond appropriately, he can escalate the collection by filing complaints and lawsuits.
The collector may try to collect by any of the following methods:
If they cannot get a judgment against you, they can still pursue you through other methods. For example, filing complaints and lawsuits to mislead or slander your character. They may also resort to threats such as stating:
The collector’s authority over the debt cannot be assumed. You have the right to deny a collection action to your debtor and request that the collector stops contacting you or use legal proceedings like a lawsuit for them to get the proper amount of money owed to you.
Federal laws do not protect debtors from state laws where the debtor resides. Many states vigorously enforce debt collection laws and regulations, which differ from county to county. A collection agency may be fined, fined, or even arrested in certain states. Some states also prevent debt collectors from misleading consumers by stating that only certain people can receive a copy of the account’s statement and that a bill is sent to them every month.
Many rights are granted to collect debts owed by companies (such as students) to private individuals (such as merchants). However, there are some limitations to this type of collection action.