A Guide to Cell Phone Signal Boosters

Poor cell phone reception continues to be a major problem…

Debt Busters: The Complete Guide to Getting out of Debt

When it comes to getting out from under the mountain…

A Basic Guide to Debt Litigation

A Basic Guide to Debt Litigation

When the economy is struggling, consumers often use their credit cards as a way to make ends meet. Just putting food on the table these days can be difficult as inflation continues to rise. Americans are having a hard time finding a job as employers continue to outsource jobs overseas. As people get into deep financial debt, they are unable to meet the monthly minimum payments on their credit cards. Consumers who have defaulted may find themselves the victims of harassing phone calls from collection agencies. They try their best to find a solution to meeting their financial obligations, but sometimes there is no easy way out. Hungry creditors often use debt litigation to recover delinquent payments from consumers.

Sneaky Tricks Used by Collection Agencies

The Fair Debt Collection Practices Act (FDCPA) is a federal law that outlines how collection agencies must behave when trying to collect a debt. The rules prohibit debt collectors from engaging in sneaky practices against consumers. They cannot pretend to be a law enforcement official or threaten to put you in jail for not paying your bills. In addition, they are prevented from doing any of the following:

• Call before 8 am or after 9 pm

• Cannot contact an individual at work if the employer does not approve

• Garnish your wages

• Use racial slurs or obscene language

• Pretend to be someone else in order to obtain personal information

• Are prohibited from contacting friends, family members, neighbors or your employer about the debt

• Falsely threaten you with debt litigation

Bill collectors who fail to abide by federal laws may be penalized with large fines and find themselves facing a lawsuit. Consumers can file complaints with the Federal Trade Commission (FTC), the State Attorney General and the Better Business Bureau.

When to Fight Back

Many creditors will file a lawsuit against the consumer in order to obtain a financial judgment against them. Sometimes people aren’t even aware that a lawsuit is pending and a default judgment is issued because they failed to appear in court. Anyone that has received threatening letters or phone calls should consider getting legal help immediately. There are a variety of ways that people can fight back, such as:

• File a complaint with the FTC who has the authority to fine debt collectors $1,000 for each violation.

• Consider filing a civil suit to recover damages and attorney’s fees

• Send a letter disputing the amount of the debt

• Insist they provide a legal contract showing that you are legally obligated to pay the debt

Keep in mind that each state has a statute of limitations that must be adhered to. This means that debt collectors have a limited time in which to collect. Once that time limit has run out, the consumer is no longer on the hook.

Legally Stopping the Harassment

Most consumers are aware they have fallen behind on their payments. Sudden unemployment or a debilitating accident may have left them unable to work. As the medical bills start to pile up, the last thing the consumer needs is to be threatened by unscrupulous collection agencies. An attorney who is experienced in debt litigation may be able to help by writing a letter telling these agencies to stop the harassing phone calls. Once they have been informed that you are represented by legal counsel, they can no longer contact you directly. They must send all future communications to your lawyer regarding any type of debt litigation.

Photo courtesy of Andres Rueda.

Follow Zenedy